The ministry of Finance has released up to Shs 6.67 trillion for the first three quarters of the 2013/14 financial year, it was announced last week. This is nearly 56 per cent of the Shs 12 trillion budgeted for this financial year. Announcing the release of money for the third quarter on Friday, Secretary to the Treasury Keith Muhakanizi said the new payment system had enabled the swift transfer of funds. "We have made sure that all the money is released on time, now with a new system in place," Muhakanizi said. Recently, government adopted a new payment system, the Integrated Financial Management System (IFMS), as a way of improving the efficiency in the management of public funds. Muhakanizi said government needed to improve on service delivery, and adopting a culture of disbursing money on time was a major step in that direction. About Shs 2.4tn has been disbursed for the third quarter, covering for the period through March 2014 . The Finance ministry warned all government spending units that have failed to utilise all the budget funds and instead returned them to the treasury at the end of the financial year. Low absorption capacity, coupled with the failure to translate available funds into meaningful public investments, has remained a big challenge in government departments. "Even the money we released in the last quarter was spent in the last two months of November and December. We wonder what they [units] were doing," said Muhakanizi. "They have been saying the new system (IFMS) is the problem, but how come you managed to spend money fast [in the last months]?" he wondered. The failure to utilise money has affected other needy government departments. Even hospitals, which cry about underfunding, continue to return unspent money, according to reports from the ministry of Finance. By the end of December, Naguru referral hospital had only spent 33 per cent of the Shs 5bn released to it in the last two quarters. Lira hospital and Butabika also had a lot of money returned to the treasury. Other under-spending government departments include the Public Service Commission , National citizenship and Immigration Centre, Office of the Prime Minister , ministry of Water and Environment, and Naads secretariat, among others. The failure to spend more also affects the private sector. The private sector depends on government to spend in order to make money. If government departments fail to spend, the private sector is hurt, and ultimately the economy too. Government has started decentralising payment systems, putting more pressure on accounting officers. "[This is] to ensure proper payroll management and to avoid accumulation of arrears, wage and pension shortfalls," Muhakanizi said. "To this effect, accounting officers will be held responsible for any anomalies on their respective institution's payroll." Often, public servants blame the ministry of Public Service for the delays in receiving their salaries. The ministry of Public Service, on the other hand, blames the local government officials for sending ghost names, making it time-consuming to verify the names. In the new arrangements, the accounting officers will be required to verify the names before making payments.
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