Hospitals, ministries fail to spend Shs81b

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KAMPALA. Government hospitals have returned to the treasury up to Shs15.3b after failing to spend it in the closed Financial Year 2016-2017.

Led by Mulago National Referral Hospital, the country’s regional referral hospitals could not spend the money, highlighting the contradiction that the health sector is under-funded. Mulago Hospital returned Shs3.4b, followed by Moroto hospital (Shs1.8b) Mubende Hospital (Shs1.2 billion).

Jinja Hospital returned Shs1.1b; Naguru Hospital (Shs1.1b) and Gulu Hospital (Shs813m).
The Ministry of Health headquarters returned to the treasury Shs2.1b with health self-accounting entities like the Uganda Aids Commission taking back Shs654m to the Consolidated Fund.
The Uganda Cancer Institute failed to use Shs158m and returned it to the Consolidated Fund while the Uganda Heart Institute could not spend Shs504m.

National Medical Stores, which has had a long quarrel with ministry of Finance to receive Shs68b to buy medicines and other medical supplies for public hospitals, emerged a contrary example, with a nearly 100 per cent absorption of funds allocated to it in the budget. It absorbed all its budget allocation, returning to the treasury a paltry Shs30, 720.
Dr Diana Atwine, the permanent secretary of Ministry of Health, blamed the poor or slow absorption of the budget funds on the Public Finance Management Act and delays by the Finance Ministry to approve reallocation of funds to other deserving budget items of a given institution or agency.

“The Public Finance Management Act gives clear guidance on how to use finances. When you budget for a particular activity, they expect you to spend that money within that line,” said Dr Atwine.

“For the other entities, some of them were (as a result of) delayed procurement of some sort, but of course if you want to spend, you first seek clearance from Finance and sometimes it takes a while. Sometimes they would also say no, you cannot spend this money even if you have it and that would be [reallocation/diversion].”
Dr Atwine insisted the Ministry needs the money, but it’s constrained by the tedious procedures.
“Sometimes we are restricted by the law not to move money from here and use it for something else. Sometimes to get that clearance you must go through lengthy processes. This contributes largely to some of this money not being spent,” she explained.

Dr Atwine also blamed the failure to absorb the budget funds on delayed recruitments. She said the ministry was supposed to get new staff, but they were not recruited. She said the ministry does not control the recruitment process and therefore the money which was meant for payment of the new workers in the budget could not be spent. Explaining the return of unspent money to the Consolidated Fund, Mulago Hospital Executive Director Dr Byarugaba Baterana said it is “ring-fenced money for salaries and wages.”

“If there is any money that has been returned to the Consolidated Fund, it must be from the ring-fenced items and these items are salaries and wages. You cannot touch money of salaries and spend it elsewhere,” said Dr Baterana.
He also said the hospital is not responsible for recruitments.

“We just submit to the Health Service Commission and if they delay in recruiting, we cannot use that money. I wrote to the Secretary to Treasury Keith Muhakanizi asking him to allow me spend the money on pensioners, but he did not give me permission,” Dr Baterana added.

He said money on capital development and recurrent budget has been spent to zero balance, and that it is only the ring-fenced money for salaries and wages, which cannot be diverted to any other activity even if the hospital lacks “consumables.”

Uganda National Roads Authority, which had a supplementary expenditure of Shs398b, returned Shs7.2b to the treasury while the Uganda Road Fund returned Shs108m.
State House, which had a supplementary funding of Shs41b on top of their approved budget of Shs257b, returned Shs600m to the Consolidated Account.

The Education ministry couldn’t spend Shs3.7b, whereas Foreign Affairs is the only ministry that returned nothing, spending its entire Shs32b to zero balance.

Topping the list of huge returns of unspent money to the treasury/Consolidated Fund is the Parliamentary Commission, which asked for a Shs58b supplementary expenditure on top of its original Shs470b, but failed to spend Shs16.7b in the financial year.

Parliament’s Communications Director Chris Obore, in a text message, said delayed procurements could account for the failure to absorb the received funds.

“The money is returned when the procurement is not done on time and payments made before closure of the Financial Year. Money returned is not necessarily from one activity but various departmental activities,” Mr Obore stated.
The Uganda Police returned Shs9b, more than the supplementary expenditure they made of Shs8b, but spokesperson Asan Kasingye said he needed to crosscheck before making a response.

External Security Organisation, the agency for foreign intelligence, spent its entire budget to zero.
Agriculture Ministry headquarters has returned Shs82m, while the National Agricultural Advisory Services Secretariat returned Shs90.6m.

At the closure of every financial year, the Accountant General’s office compiles a list of government entities that are returning unspent money to the Consolidated Fund.

The unspent money in the financial year 2016/17, which totals to Shs81b, will be returned to the treasury. Permanent Secretary of ministry of Finance and Secretary to the Treasury Mr Keith Muhakanizi recently told Parliament’s Public Accounts Committee that the returned balance is what is used for expenditure at the immediate beginning of a new financial year.

At the Ministry of Justice and Constitutional Affairs, where private prosecutors are threatening to lay down tools over poor pay, Shs1.2b was returned to the treasury.

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