A Review of Uganda’s Public Finance Management Reform s (2012 to 2014): Are the Reforms Yielding the Expected Outcomes?

Despite the enactment of a number of public finance management reforms since the 1990s, misappropriation of public funds in Uganda remains a challenge. For example, scandals in the Office of the Prime Minister where UGX 60 billion was stolen and UGX 340 billion was lost to ghost pensioners in the Ministry of Public Services prompted several donor governments to suspend budget support to Uganda in 2012. In response to this and other challenges, the government took advantage of provisions in existing laws and regulations to initiate a number of new reforms and measures to further strengthen public financial management and improve public service delivery. This report examines the progress and impact of these on-going public finance management reforms undertaken by the MFPED since 2012/13. These reforms include the implementation of the Treasury Single Account (TSA); upgrading the Integrated Financial Management System (IFMS) and the Integrated Personnel and Payroll System (IPPS); improving wage and payroll management, improving budget formulation, implementation, monitoring and reporting; and strengthening budget transparency. The study employed different but complimentary approaches to gather the relevant data and information. These included an extensive review of government documents and reports relating to the reforms to obtain a clear understanding of the existing public finance management system, consultations with key ministries and government departments who were driving and implementing the reforms to capture their perspectives on the progress of the reforms in terms of achievement and challenges, and the collection of qualitative data from local governments (districts and municipalities) as well as service delivery units (schools and health centers) using a multi-stage purposive sampling procedure. The study findings show that despite some challenges, the reforms are so far yielding positive results in terms of improved accountability, reporting and service delivery. A summary of the outcomes of the key reforms is as follows. The key reforms contributed to improved public finance management at different levels of government. These areas include improved public expenditure management through the (TSA), improved accountability and public expenditure use through the IFMS, reduction in ghost workers and the overall wage bill at MDAs and local governments through the IPPS and the decentralization of the wage and payroll management system. A major milestone of these reforms in particular is the decentralization of payroll management that has so far reduced the incidence of ghost workers and reduced the government’s total wage bill. However, despite the noted improvements, there are still challenges with the implementation of some of these reforms. The challenges include limited coverage of the IFMS; limited interfacing between the IFMS and IPPS; limited internet infrastructure to support the IFMS and IPPS; and inadequate technical capacity to operate the IFMS, IPPS and OBT systems. There is also limited printing and display of the payroll at local government units.