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Gov’t Urged to Ban Cash Collection of Non-Tax Revenue

According to the law, Accounting Officers are required to transfer all collected revenue to the Consolidated Fund and only spend at source after securing permission from the Secretary to the Treasury.
24 Jul 2019 18:16
Auditor General John Muwanga with the Deputy Auditor General Keto Nyapendi Kayemba. The Auditor General has consistently queries expenditure of NTR at source without approval.

Audio 5

The Office of the Auditor General has recommended the elimination of cash collection for Non-Tax Revenue-NTR in all government entities.  The suggestion seeks to stop rampant abuse of a provision of the Public Finance Management Act, requiring all local revenue to be sent intact to the Consolidated Fund. 

According to the law, Accounting Officers are required to transfer all collected revenue to the Consolidated Fund and only spend at source after securing permission from the Secretary to the Treasury. 

But the Auditor-General has consistently reported instances where government entities are not complying with the law. The Public Finance Management Act provides a fine not exceeding 10 million Shillings or a term of imprisonment not exceeding 4 years or both for a person convicted for defying the directive.  

However, Edward Akol, the Director of Audit in the Office of the Auditor-General says that the related penalty to irregular spending of NTR is not sanctioned, hence encouraging the vice. He recommends that if the cash collection of NTR is eliminated, then abuse of locally collected revenue can be solved. 

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The issue of abusing Non-Tax Revenue collection has dominated recent investigations by the public accounts committee of Parliament.  In one of the cases, Dr Celestine Barigye, the Director Mbarara Regional Referral Hospital was questioned for spending 733 million Shillings at source during the financial year 2017/2018.

In his explanation, Dr Barigye said that the hospital used the money to deal with emergencies which included among others, an outbreak of Rift Valley Fever and the Crimean Congo Fever. He added that part of the money was used to pay contract staff and incentives for those involved in the collection of Non-Tax Revenue. 

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Other entities that have abused the provision include Mulago National Referral Hospital, and the Uganda Police Force, among others. 

PAC Chairperson Nathan Nandala Mafabi said that Accounting Officers have no genuine reason for spending NTR at source, the main reason they cannot seek approval from the Secretary to Treasury.

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Stephen Kateregga, the Director Value for Money Audits told URN that the most Accounting Officers hide behind delayed disbursements from Finance to spend Non-Tax Revenue. However, Kateregga also noted instances where the money is simply misappropriated under the disguise of emergencies. 

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Bob Mande, the Assistant Director of Central Government Audit described the expenses as an act of budget indiscipline. He adds that such expenses are not recognized in accounts because Non-Tax Revenue is not money appropriated to the entities.

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The Secretary to Treasury Keith Muhakanizi has in the past emphasized the need to enhance accountability for government revenue collected also warning that accounting officers who fail to account for funds risk losing their jobs.