Date of promulgation:
SUPPLEMENT No. 13 22nd June, 2007
STATUTORY INSTRUMENTS SUPPLEMENT
to The Uganda Gazette No. 31 Volume C dated 22nd June, 2007 Printed by UPPC, Entebbe, by Order of the Government.
STATUTORY INSTRUMENTS 2007 No. 25.
THE LOCAL GOVERNMENTS (FINANCIAL AND ACCOUNTING) REGULATIONS, 2007.
ARRANGEMENT OF REGULATIONS.
Application of these Regulations
Part II—Financial Administration And Control.
General control of financial transactions of local governments
Functions of the council
Functions of the executive committee
Functions of Standing Committee
Duties of chief executive
Duties of Accounting Officers at administrative units
Duties of head of finance
Duties of the head of internal audit
Duties of heads of department
Duties of other public officers
Pecuniary responsibility of public officers
Functions of Local Government Public Accounts Committee
- Annual plans and budgets
- Budget desk and duties thereof
- Annual revenue expenditure estimates
- Recurrent and development estimates
- Feasibility studies and cost benefit analysis
- Vote on account
- Insufficient provisions
- Revision of estimates
- Virement of warrants
- Reallocation warrant
- Supplementary provisions
- Amendments to the vote book
- unauthorised excesses
- Authority for revenue collection and expenditure
- Revenue collection responsibilities of the Head of Finance
- Revenue registers
- Revenue collector
- Loss of receipt forms
- Legal tender
- Grants from Government
- Donors funds
- Remittance of shared revenue collections by local governments
40 Authority and responsibility for payments
- Record of the transaction in the accounts
- Payment vouchers
- Payment of advances
- Appointment of vote controllers and bank agents
- Departmental warrants
- Vote book
- Registration of specimen signatures
- Modes of payment
- Restrictions on cash payments
- General and special imprest
- Custody of imprests
- Replenishment and retirement of imprests
- Salaries and wages establishment registers
- Payment of salaries and pensions, terminal benefits and compensation
- Methods of payment of employees costs
- Payments of local governments emoluments and allowances
Part VI—Accounting And Controls
- Accounting policy and chart of accounts
- Accounting manual and Ministers instructions
- Accounting records of local governments
- Accounting records at administrative units
- District hospital accounts
- Health units accounts
- Accounts of secondary schools and capitation grant
- Financial management of primary schools
- General control of finances of administrative units
- Security of accounting records
- Retention or destruction of accounting records
- Accounts of local governments
- Annual closure of accounts
- Audit of accounts
Part VII—Treasury Management
- Banking and bank accounts
- Opening of bank accounts
- Bank reconciliation
- Fixed deposits
- Borrowed funds
- Acceptable cheques
- Cashing of cheques
- Dishonoured cheques
Part VIII—Assets Management
- Custody of stores and other assets of the department
- Control arrangements
- Stores control officer
- Allocated stores
- Register of vehicles and heavy plant
- Inventories of light plant, working equipment and loose tools
- Inventories of machinery, furniture and other equipments
- Registers of land and buildings
- Handing over certificates
- Centralisation of stores
- Sale of stores
- Loss through damage
- Use of spare parts
- Responsibility for safe custody of public moneys and other assets
- Security of cash and valuables
- Safes, cash boxes and keys
- Private monies
- Legal action for recovery
- Control of receipt books
- Irrecoverable revenue
- Arrears of revenue returns
- Convening of boards of survey
Part IX—Risk Management
- Risk management and internal control
- Establishment of internal audit units
- Relationship between head of internal audit and head of finance
- Internal audit reviews
- Special investigations
- External audit
- Computers and information systems
- Computers and information security
- Insurance policy and principals
- Preliminary loss report
- Minor losses
- Loss report forms
- Loss report to executive committee
- Action on final loss report
- Writing-off of losses
- Surcharge powers
- Accounting for losses
- Security for cash in transit
- Liability of the council
- Use of private vehicle
Part X—Offences And Penalties
Part XI—Miscellaneous Provisions
- Utilisation of funds at village level
- Reporting of deaths, dismissals, etc
- Guides, manuals and other publications
- Compliance with these regulations
- Handing and taking over of public offices
- Revocation of S.I. No. 243 - 15.
STATUTORY INSTRUMENTS 2007 No. 25.
The Local Governments (Financial and Accounting) Regulations, 2007.
(Made under sections 78(2)and 175 of the Local Governments Act, Cap 243).
In exercise of the powers conferred upon the Minister by section 78(2) and 175 of the Local Governments Act, these Regulations are made this 14th day of May, 2007.
These Regulations may be cited as the Local Governments (Financial and Accounting) Regulations, 2007.
These Regulations shall come into force on the 1st day of July, 2007.
- These Regulations shall apply to all financial transactions and business of all local government councils and administrative units and to the management of all public moneys and public property in local governments.
- Nothing in these Regulations overrules any obligation conferred on a person by the Act or any other law.
- Where there is a conflict between these Regulations and any earlier regulations, instructions or circular, these Regulations shall prevail.
In these Regulations, unless the context otherwise requires—
“accountant” means an officer appointed and posted to a district, city, municipal or division council to be incharge of
accounting and financial management of that council;
“Accountant General” means the person designated as such under section 7 of the Public Finance and Accountability Act, 2003;
“Act” means the Local Governments Act;
“administration” means the entire administrative setup of a district, city, municipality, division, town, subcounty or any other lower council;
“allocated stores” means stores the cost of which is directly charged on the relevant programme, sub-programme and item of expenditure;
“bank” means a financial organization or institution registered with the Bank of Uganda to provide banking services under Part VII of these Regulations;
“cash in transit” means all forms of monies as defined in these regulations being remitted or transferred from one office or place to another;
“chief executive” means chief administrative officer or town clerk and includes assistant administrative officer, assistant town clerk or sub-county chief appointed accounting officer by the chief administrative officer of a district or the town clerk of a city or municipal council;
“chief finance officer” means an officer in charge of accounting and financial management of a district, city or municipal council;
“council” means a council as defined by the Act;
“council bank account” means council bank accounts operated by the chief executive and head of finance for main stream accounts and agency and project accounts operated by the chief executive, head of finance and a vote controller appointed under these Regulations;
“currency point” has the meaning assigned to it in the sixth schedule
to the Act;
“executive committee” means a council committee established in accordance with the Act;
“head of finance” means the chief finance officer, accountant or sub-accountant responsible for accounting and financial management of a local government;
“heavy plant” means items of a specialised nature which may include compressors, motorised engines and generators, heavy pumps, drillers, excavators, dumpers, cranes, rollers, trailers, dozers, road sweepers, graders, tar sprayers, fire service tenders, fork-lift trucks, or other similar items;
“internal audit” means an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organisation;
“internal control” means the systems of control devised by management to ensure that the council’s objectives and management policies are achieved and adhered to in a manner that promotes the economy, efficiency and effectiveness on the use of resources, that financial and other records are reliable and complete and that the councils assets and interests are safeguarded;
“land and building” means land, buildings and enclosures which are owned, rented or occupied by the local council;
“local council” includes local government councils and administrative unit councils;
“local government” means the local councils established under section 3(2) to (5) of the Act;
“loss” means any loss, theft, deficiency, fraudulent payment, suppression of revenue, irrecoverable revenue, misappropriation, misuse or unauthorized damage or destruction;
“member of council” means an elected councilor;
“Minister” means the minister responsible for local governments;
“monies” includes cash, cheques, postal and money orders, stamps and other negotiable instruments of monetary value;
“public officer” means any person holding or acting in a public office;
“revenue collector” means any officer, cashier, chief or any accounts staff appointed to receive or collect revenue;
“risk management” means the establishment of policies, procedures and practices to identify, analyse, quantify, monitor, and control financial and other exposures of the council so as to minimize potential losses;
“standing committee” is a committee of council as established under the Act;
“stores and other assets” includes allocated stores, unallocated stores, vehicles, plant, equipment, tools, machinery, furniture, movable fittings and livestock;
“sub-accountant” means an officer posted to a sub-county council and a municipal division to take charge of financial accounting and financial management of that council;
“unallocated stores” means stores the cost of which is charged to a stores control account pending later charge to the relevant programme, sub-programme and item of expenditure;
“year” means a financial year.
Part II—Financial Administration And Control
- General control of financial transactions of local governments.
The financial transactions of local governments shall be under the general control of the accounting officer and shall be managed by the
accounting officer subject to the Act and these Regulations.
- Functions of the council.
(1) The council shall perform the following functions in relation to financial management—
- authorise public expenditure, in accordance with section 82 (1)
of the Act;
- exercise general control over public revenue of the council in
accordance with the Act, these Regulations and other instructions issued by a competent authority;
- approve all annual plans and budgets for local government
- approve vote on account;
- approve supplementary estimates;
- approve policies;
- consider reports produced by the Local Government Public
Accounts Committee and recommend action where necessary.
- Functions of the executive committee.
The functions of the executive committee of a council in relation to financial management shall be—
- to exercise general supervision and control over the council’s
finances and Government conditional grants and ensure that these Regulations are observed;
- to propose policies and projects for consideration by the council
and upon approval by the council, monitor the implementation of the council’s programmes and projects;
- at the end of each financial year, to consider and evaluate the
performance of the council against the approved work plans and programmes;
- to review the annual and other accounts of the council together with the audit reports;
- to review the quarterly internal audit reports after being
examined by the local government public accounts committee and report to the council;
- to recommend and exercise surcharge powers in accordance
with regulation 118;
- to authorise the writing off of losses in accordance with
- to approve any re-allocation of the council’s funds;
- to approve the annual cash flow budgets;
(j) to monitor the implementation of the council’s policies and programmes;
(k) to review periodic performance reports prepared by the chief executive and recommend action where necessary;
- to review reports produced by the local government public accounts committee and report to the council.
- Functions of standing committees.
The functions of standing committees of a council in relation to financial management in the specific sectors for which they are responsible include—
- to review finance related bills for ordinances or bye-laws
presented to the council and make appropriate recommendations to the council;
- to review monthly revenue and expenditure returns, contracts
committee reports and other reports and make recommendations to the council;
- to review budgets and plans of their sectors and make
recommendations to the council;
- to monitor and review the performance of sectors under their
- to perform other financial responsibilities that are delegated to
it by the council; and
- to handle finance related matters referred to it by the council.
- Duties of the chief executive.
- The chief executive shall be the accounting officer of the council.
- The duties of the chief executive shall include, among others—
- to ensure that the financial procedures established by the Act,
these Regulations, the accounting manual and any instructions issued under the Act and these Regulations are followed and that accounting records are maintained in a form prescribed for accounting purposes;
- to ensure that the public monies, property and resources for
which he or she is responsible as accounting officer are properly managed and safeguarded;
- to report to the Minister with a copy to the Auditor General, any
cases of apparent waste, extravagant administration or failure to achieve value for money in addition to any weakness in financial procedures;
- to produce when required by the Auditor General or Accountant
General or by such public officers as may be authorised by them, all cashbooks, stamps, records or vouchers in his or her charge;
- to reply promptly and substantively to any queries addressed to
him or her by the Minister, Auditor General, Inspectorate of Government and the head of internal audit;
- to ensure the appointment of a qualified and competent head of
finance, head of internal audit and such other staff as are necessary to carry out the accounting and financial
management of the council;
- to maintain, through the head of finance, a budget desk for purposes
of having an adequate and efficient system of planning, budgeting and budgetary control to enable preparation of plans and budgets in the prescribed time and manner, and the activities of the council to proceed within the prescribed framework;
- to prepare and submit to the Auditor General the statement of
final accounts of the council for audit within three months after the end of each financial year in accordance with the Public Finance and Accountability Act, 2003;
- to ensure that revenue and debt management and collection,
expenditure management and payment of creditors are in accordance with these Regulations, the accounting manual and any instructions issued by the Minister;
(j) to establish proper storage facilities with accounting and financial control systems to ensure efficient receipt, issue and safe custody of stores, vehicles, plant and other assets;
(k) to establish and operate, through the head of internal audit, a reporting framework on the adequacy and efficiency of arrangements made under paragraph (b), and to assess whether the council receives value for money in respect of all its activities;
- to support and participate in national and local training and publicity initiatives for the efficient maintenance and improvement of the financial skills and awareness of all personnel connected with the council, including staff, councillors and the public;
(m) to ensure that all staff and councillors are aware of and conform to the requirements of these Regulations and the accounting and management arrangements made under them;
(n) to appoint accounting officers at lower local government councils, for the purposes of accounting to him or her for conditional grants and other funds from the council, other than the funds
that belong to those lower government councils.
- The chief executive shall ensure the availability of these Regulations to the council staff members and political leaders, and ensure that staff members are conversant with these Regulations.
- The chief executive shall take necessary action where the mismanagement and other anomalies are reported by the local government public accounts committee and where action is not taken or where such action is considered insufficient, the Minister shall take any action within the law considered appropriate.
- Duties of accounting officers at administrative units.
- The assistant chief administrative officer in charge of the county shall be the accounting officer of the administrative unit at the county.
- The parish chief or ward agent shall be the accounting officer of the parish or ward in accordance with these Regulations.
- The chairperson of the executive committee of the village administrative unit shall be accountable to the village council.
- The duties of the assistant chief administrative officer, the town clerk or the parish chief as accounting officers of the county, town board or parish respectively shall include among others—
- to supervise and co-ordinate the preparation of draft annual
estimates and submit them to the council for debate and approval by the fifteenth day of June;
- to carry out financial monitoring duties at the village level and
prepare inspection reports on a monthly basis, to be submitted to the district headquarters or sub-county and to co-ordinate the preparation of annual budget estimates;
- to ensure that the councils prepare an income and expenditure
statement at least twice a year and submit it to the chief executive of the district or sub-county;
- to ensure the collection of the county’s or parish and village share
of revenue from each sub-county within the area of jurisdiction and guide the sub-counties to distribute the revenue collected,
in accordance with the Act and these Regulations;
- to ensure that the bank account of the administrative unit is
opened on which all monies received by the administrative unit shall be banked;
- to be signatories to the county and parish bank accounts;
- to authorize all payments by the administrative unit and ensure
that there is proper accountability for the council’s financial transactions;
- to ensure that proper accounting records are maintained by the
- to submit monthly returns of income and expenditure to the
(j) to ensure that a cash book and revenue registers are maintained.
- Duties of the head of finance.
- The head of finance shall be responsible to the chief executive for all financial transactions and accounts of the council, and shall be the receiver, paymaster and chief accountant of the council and his or her duties shall among others, be—
- to manage the financial affairs of the council prudently,
efficiently and effectively;
- to ensure compliance with these Regulations, the accounting
manual and all instructions issued by the Minister;
- to supervise and co-ordinate the budget desk officers in the
preparation of work plans for submission to the chief executive and to the council by the required dates, in accordance with the budget cycle of the local government;
- to ensure that the approved estimates of expenditure on votes
under his or her control are not exceeded and to keep watch over the expenditure of votes controlled by other officers and
warn them if there is a danger of those votes being exceeded;
- to ensure that no expenditure is incurred before it has been
authorized by the council and any other organ of the council authorised to do so;
- to maintain approved systems of accounting throughout the
council in accordance with these Regulations;
- to supervise and ensure the prompt collection of all revenue due
to the council and bring promptly to account all revenue or other receipt paid into the administration’s bank accounts or accounted for to him or her under the proper directorate or programs, sub-programs and items;
- to supervise all officers entrusted with the receipt and
expenditure of administration funds and to take precautions, through the maintenance of frequent checks against the occurrence of fraud, embezzlement or carelessness;
- to supervise the expenditure and other disbursements of the
council and ensure that no payment is made without proper authority and in case of any apparent extravagance call the attention of the officer concerned and his or her superiors;
(j) to charge under the proper directorate or programs, subprograms and items all disbursements of the council;
(k) to co-ordinate the preparation of the annual accounts of the council for audit and prepare financial statements and returns as required by the Act and these Regulations;
- to prepare special reports as required by the council, donors or the central government in addition to monthly, quarterly and annual financial statements required under the accounting provisions and copy them to any organ of the council empowered to receive them;
(m) to make provision for the secure custody, under lock and key, of all the receipt books, tickets, licences and other accounting
(n) to monitor in consultation with chief executive, the administration’s procedures for the procurement of goods, services and works and to ensure that all officers concerned provide adequate storage accommodation for stores and assets in their receipt, custody and disposal of these stores or assets , and co-operate with the contracts committee in the execution of its work;
(o) to ensure that proper provision is made for the safekeeping of all council monies, securities, valuable documents and account books in accordance with these Regulations;
(p) to supervise the operation, maintenance and protection of the council accounting and data processing equipment including the provision of dust and damp-free accommodation and standby facilities in the event of breakdown or power failure;
(q) to take full responsibility for staff under his or her control and ensure fair allocation of duties and training;
(r) to ensure that all officers with responsibilities of a financial nature are conversant and comply with these Regulations;
(s) to report to the chief executive and recommend disciplinary action against any officer who continuously contravenes these Regulations;
(t) to implement lawful policies and directions of the council, as communicated to him or her by the chief executive and where he or she considers any direction not to be in accordance with the Act and these Regulations, prepare a written statement of objection to the Auditor General with a copy to the chief executive and where necessary to the Minister;
(u) to ensure that the lower local government councils within his or her area of jurisdiction keep proper books of accounts;
(v) to collect the percentage of revenue due to the council from the lower local government councils in accordance with the Act;
(w) to remit to the lower local government councils the relevant percentage of revenue collected, where the council has by mutual agreement collected the revenue on behalf of the lower local government or received such funds from Government, donors, or from any other source;
(x) to bank the revenue collected on behalf of lower local government councils on a separate bank account of the relevant council;
(y) to submit monthly returns of the revenue collected on behalf of lower local government councils to the relevant councils;
(z) to liaise with donors and Non-Governmental Organisations for independent audits of accountability statements of funds given to the council, by those agencies;
(aa) to ensure that all officers receiving revenue, account to the
accounting officer and that the payment of salaries to all employees of the local government is done as a collective responsibility involving the accounting officer and the vote controller;
(ab) to ensure prompt remittance of bursary funds to the relevant
educational institutions, once approved by council;
(ac) to ensure that all workers are paid promptly;
(ad) to ensure that all local council recurrent and capital development expenditure transactions are processed through the Commitment Control System (CCS);
(ae) to ensure that no contract agreement, Local Purchase Order
(LPO) or other commitment shall be issued unless a proper commitment requisition has been approved;
(af) to ensure that commitments are not approved unless there is
sufficient uncommitted balance available in the quarter’s commitment limit for the relevant budget item;
(ag) to monitor commitments with the vote controllers and to be
personally responsible for any over-commitment of the council; and
(ah) to produce annual cash flow budgets for the approval of the
- The decision of the Auditor General on an objection under subregulation (1)(t) shall be communicated in writing to the chief executive and the head of finance, and shall be final.
- The head of finance shall through the chief executive submit the council’s monthly and quarterly financial position report to the executive committee.
- Every head of department shall, by the fifteenth day of each month, in the manner prescribed in the accounting manual or the Minister’s instructions, through the chief executive, submit a department report to the respective standing committee.
- The quarterly and annual financial statements shall include full disclosure of the nature and value of payment of arrears and outstanding commitments, shortfalls in budgeted revenues and grant transfers and contingent liabilities, including pending litigation and guarantees issued.
- The head of finance shall be personally responsible for all losses resulting from the deliberate wrong instructions given to subordinate staff.
- The head of finance shall be responsible for the cash management function of the council on a daily basis and advise on the adequacy of cash resources to meet the council’s obligations.
- The head of finance shall bring to the notice of the chief executive any apparent deficiency in these Regulations and suggest any means by which financial and accounting procedures may be improved.
- Duties of the head of internal audit.
The duties of the head of internal audit shall include among others—
- to maintain an efficient and effective internal audit unit able to
carry out the functions of the unit;
- to implement all relevant aspects of the internal audit manual
and ensure that the prescribed standards and work programmes are adhered to where applicable;
- to prepare annual and quarterly work plans for the internal audit
unit to ensure optimal deployment of resources to priority audit areas, and to submit the plans to the chief executive for approval;
- to supervise the conduct of audits, and review the draft audit
reports and working papers of the unit staff to ensure that—
- all audits have been carried out to an acceptable standard
following prescribed programs;
- all matters arising have been properly dealt with and
reported in the correct manner;
- to prepare internal audit quarterly reports for submission to the
council within one month at the end of each quarter;
- to review the financial and accounting systems of operation in
each department and establishment of the administration to ensure that they are adequate, effective and conform to the provisions of these Regulations and the internal audit manual;
- to audit revenue collection to ensure that all monies due to the
administration are collected and banked, or otherwise accounted for in terms of these Regulations and the internal audit manual;
- to audit procurement procedures and payments to ensure that all
goods, services and works are properly ordered, received, examined and paid for in terms of these Regulations and the internal audit manual and that value for money as an objective of procurement has been achieved;
- to conduct manpower audits embracing all employees of the
administration including staff records, remuneration levels, allowances, and payments to ensure conformity with the budget, approved establishment, these Regulations and the internal audit manual;
(j) to audit all stores, cash, assets and other property owned or in the care of the administration to ensure their safe custody, efficient and economic usage and disposal.
- The head of internal audit shall extend services to the subcounty and division councils, schools, health units and administrative units in his or her area of jurisdiction and submit quarterly reports.
- The head of internal audit shall work in harmony with Auditor General’s representatives in all audits of local government accounts.
- Duties of a head of department.
The duties of a head of department in respect of financial management include, but are not limited to the following—
- being vote controller;
- approval of the department’s commitments;
- being personally responsible for ensuring that all financial
commitments of the department are within the commitment limits set by the head of finance or cash received, and in line with approved work plans;
- to ensure the availability of these Regulations to staff members, and
that staff members are conversant with these Regulations;
- to submit to the head of finance their financial and progress
reports within seven days after the end of each month;
- being responsible for the production of the department’s annual work
plans, budget framework papers, procurement and, investment plans, budget estimates, revenue enhancement plans, rolled capacity and development plans in accordance with the budget cycle and instructions issued by the Minister; and
- to produce a quarterly cash flow statement for the approval by the head of finance in the format issued by the Minister or provided in the accounting manual.
- Duties of other public officers.
Each public officer of the administration concerned with the receipt, custody, disbursement or documentation of money, or with stores or other assets shall—
- comply with these Regulations, the accounting manual, and any
other directions or instructions issued by the chief executive, head of finance or Minister;
- exercise supervision over the receipt of revenue, ensure its
punctual collection and banking and report immediately to the chief executive any defect or difficulty in the procedure for the collection of revenue which comes to his or her notice;
- exercise strict supervision over all officers under his or her
authority entrusted with financial or accounting duties and bring to the attention of the chief executive or head of finance any incompetence, dishonesty or carelessness on their part and take precautions, against the occurrence of fraud, embezzlement or errors and maintain an internal check system;
- produce for inspection all cash, securities, books of account,
records, receipt books or vouchers in his or her charge when required by the Auditor General, chief executive, head of finance, head of internal audit, or inspectors from line ministries or any other authorised person including donors;
- promptly reply to any queries addressed to him or her by any of
the officers referred to in paragraph (d) , giving in full the information or particulars required; and
- promptly prepare and submit financial returns and statements as
required by any law, financial regulation, or instructions from the head of finance and requirements of central Government ministries.
- Pecuniary responsibility of public officers.
- In accordance with article 164 of the Constitution, all public officers are personally and pecuniary responsible for the due performance of the financial duties of their offices, for the proper collection and custody of all administration monies, stores, and assets receivable by them or under their authority.
- If any public officer fails to account satisfactorily for or to produce any part of cash, stores or other items of value entrusted to him or her solely, he or she may summarily be required by the chief executive to make good the deficiency, which may be deducted from any monies due to him or her from the administration.
- Public officers to whom cash, stores or other items of value are jointly entrusted, such as the holders of keys of strong-rooms, safes and cash boxes, may be required to make good any deficiency jointly and or severally.
- If at any time revenue of the administration or other funds or stores managed by the administration sustains a loss by reason of the neglect or default of any officer, the officer shall be liable to be surcharged with the amount and any sums due to him or her from the administration may be withheld in satisfaction of the surcharge.
- The responsibility of the Auditor General and the head of internal audit to check and report any shortcomings in connection with the administration’s accounts, finances and stores does not absolve any officer from his or her responsibility for complying, or securing compliance with instructions within the scope of his or her own authority.
- Functions of the local government public accounts committee.
- The local governments public accounts committee shall examine the reports of the Auditor General, the head of internal audit and any other reports of commissions of inquiry in accordance with section 88 of the Act.
- The local government public accounts committee shall produce reports for submission to the council and the Minister.
A local government council shall formulate, approve and execute budgets and plans in accordance with section 77 of the Act.
- Annual plans and budgets.
- The chief executive shall ensure prompt production of annual plans and budgets for the council.
- The chairperson of a local government shall, not later than the fifteenth day of June of each year, cause to be prepared and laid before the council, estimates of revenue and expenditure and annual plans of the council for the next financial year.
- The budget estimates shall be based on the objectives to be achieved for the financial year and during implementation efforts shall be made to achieve the agreed objectives or targets, as the programme of the council.
- The chairperson of the council shall sign the approved estimates on behalf of the council.
- The approved budget estimates shall be submitted to the Ministries responsible for finance and local government and to the Local Government Finance Commission immediately after approval by the council.
- Budget desk and duties of the budget desk.
- Each local government council shall have a budget desk composed of officers specified in the accounting manual or the instructions issued by the Minister.
- The duties of the budget desk shall include—
- coordinating the departments to produce annual plans and
budgets for submission to the chief executive.
- following up the budget cycle issued by the Minister and the
chief executive and be responsible for informing the
executive committee and the council of the progress of the budgeting process.
- ensuring that the council departments produces realistic budget
estimates and development plans.
- ensuring that planning is linked to the budgeting.
- Annual revenue and expenditure estimates.
- The annual estimates of revenue and expenditure shall give full information concerning the policy which the council intends to pursue during the year of the estimate in the form of background to the budget and shall contain as much details as is consistent with clarity and conciseness.
- The descriptive titles in the estimates and explanatory notes of various items shall be framed with accuracy and where an item covers a number of different, though related purposes, a break down of the figure shall be given.
- Recurrent and development estimates.
The estimates of recurrent and capital development expenditure shall be produced in a format provided for in the accounting manual or the instructions issued by the Minister.
- Feasibility studies and cost benefit analysis.
Feasibility studies, work plans, cost benefit analysis, environment impact assessment and effects on taxation shall be indicated clearly before any project takes off and explanatory notes shall be provided to show the purpose and need for each project, and what the source of finance is to meet the full cost of the scheme.
- Vote on account.
- Where the estimates are not approved by the local government council before the commencement of the financial year to which they relate, the local government council may pass a vote on account by resolution authorising expenditure on established services provided for in the estimates up to an amount not exceeding twenty five percent of all revenues including central transfers and locally generated revenues for the preceding year.
- A vote on account shall be valid for a period of three months.
- Insufficient provisions.
- Expenditure for which there is insufficient or no provision in the approved estimates shall not be incurred until a supplementary estimate has been approved.
- Expenditure shall not be incurred on a service which cannot be completed with the funds authorized for it within a financial year.
- A commitment involving a supplementary estimate shall not be entered into until the supplementary estimate has been approved by the council.
- Revision of estimates.
- A revision of estimates may fall into one of the following categories—
- virement, which involves the reallocation of approved funds
between votes or items under the same sub-program, excluding any transfer between “employee costs” and “other charges”;
- re-allocation, which is the re-allocation of approved funds
between “employee costs” and “other charges” and between items under different programmes of expenditure with the prior approval of the executive committee;
- supplementary estimates, involving additional funds required
for recurrent expenditure or capital development purposes and involves an increase in the total approved estimated expenditure for the year.
- A virement may be approved by the chief executive and subsequently reported to the executive committee but re-allocation shall require the prior approval of the executive committee and clear savings shall be declared by the chief executive before re-allocation in the case of personal emoluments.
- Supplementary estimates made under subregulation (1) are subject to strict conditions and require prior approval of the council.
- The details of the procedure for revising estimates shall be set out in the accounting manual.
- Virement of warrants
- An application for virement shall be made by the vote controller concerned to the chief executive showing the amount(s) to be transferred and the votes under the same programme of expenditure affected, but virement should not be used—
- to transfer funds between “employee costs” and “other charges”;
- to create a new post or alter an approved salary scale;
- to implement any new policy or principle, or materially alter the
pattern of expenditure as approved by council in the estimates.
- If neither the chief executive or head of finance has any objection, the chief executive shall issue a virement warrant to the vote controller concerned, with copies to the head of finance, head of internal audit and Auditor General.
- In case of district hospitals, the hospital or medical Superintendent shall be authorised by the finance or management committee of the hospital to issue a virement warrant and send a copy to the chief executive.
- Re-allocation warrant.
- An application for re-allocation shall be made by the vote controller concerned to the chief executive showing the amounts to be transferred from one sub-program to another and the votes affected but reallocation should not be used—
- to create a new post or alter an approved salary scale;
- to implement any new policy or principle, or materially alter the
pattern of expenditure as approved by the local government council in the estimates.
- The chief executive, after consultation with the Head of Finance, shall submit the application for re-allocation to the Executive
Committee where the head of the department and chairpersons of standing committees concerned shall attend to explain or clarify the reasons for the re-allocation.
- If the executive committee approves the re-allocation, the chief executive shall issue a re-allocation warrant to the vote controller concerned, with copies to the head of finance, head of internal audit and Auditor General.
- Supplementary provisions.
- If new or additional funds are required over and above the approved budgetary provisions, which cannot be met by virement reallocation, the vote controllers concerned shall apply to the chief executive for a Supplementary provision.
- An application for supplementary estimates must quote savings from another vote, or identify additional revenue or external funds which shall cover the cot of the additional requirements.
- After consultation with the head of finance, the chief executive shall submit the application for supplementary estimates to the executive committee where the vote controller and Standing Committee concerned shall attend to explain or clarify the reasons for the supplementary estimates and after scrutinizing the application, the executive committee shall make recommendations and submit the application for supplementary estimates to the council for approval.
- On approval by the council, the chief executive shall issue a supplementary provision warrant to the vote controllers concerned with copies to the head of finance, head of internal audit and Auditor General.
- Amendment to the vote book.
- When a virement, re-allocation or supplementary estimates warrant has been issued, the vote book must be amended to reflect the corresponding increases and decreases and the approved estimates are thereby formally amended.
- Re-allocation of donor funds shall not be effected except with the agreement of the donor concerned.
- Unauthorised excesses.
- On the final adjustment of accounts at the end of the financial year, the schedules and explanations of vote controllers shall be submitted by the accounting officer to the Auditor General.
- Where there is unauthorized excess expenditure, the vote controller must then show cause to the executive committee why they should not be surcharged with any excess in respect of their departments within 30 days of notification by the head of finance and the schedules and explanations of vote controllers shall be submitted by the accounting officer to the Auditor General along with annual accounts for audit, within the statutory period.
- Unauthorised excesses may be surcharged against the officers responsible in accordance with the provisions relating to loss of public monies, stores and other assets.
- Authority for revenue collection and expenditure.
- On approval of the complete estimates by the local government council, the council may collect the revenue, incur the expenditure and generally put into operation the provisions of the estimates.
- The chairperson of the council shall sign the approved estimates of which summaries shall be published throughout the jurisdiction of the council, in a local newspaper, as well as distribution to all lower local government notice boards by the fifteenth day of the second month after the approval of the estimates by the council.
- The Minister may issue instructions on sharing of revenue collected by councils and receipts from central Governments.
- Revenue collection responsibilities of the head of finance.
The head of finance is responsible for ensuring that revenue collectors, defined under these regulations, carry out their duties properly to ensure that all revenue due to the council is promptly collected in the approved manner and banked intact.
- Revenue registers.
- In respect of the various forms of revenue, including taxes, rates, fees, rents and other income, prescribe revenue registers shall be used to show details of revenue due, revenue collected and all arrears, including a record of steps taken to collect all arrears.
- All arrears carried forward at the end of each accounting period shall be duly brought forward at the beginning of the next accounting period.
- Details of the format of all accounting documents shall be found in the accounting manual.
- Revenue collector.
- A revenue collector shall be any officer, cashier, sub-accountant or an officer in an established post, authorized in writing by the chief executive to collect revenue.
- No officer may act as a revenue collector unless he or she is in an established post, except in cases of emergency where written authority of the Head of Finance must be obtained and reasons for appointing that officer shall be forwarded to the accounting officer.
- In the case of an appointment at a sub county or district level, the Accounting Officer at the subcounty or division level shall liaise with the head of finance of the district or municipality when appointing revenue collectors.
- Loss of receipt forms.
- If any unused receipts, tickets, licences or other forms or documents are lost, the loss shall immediately be reported to and investigated by the head of internal audit and the relevant police authority, and shall be reported to the officer who issued them, with a copy to the head of finance, and chief executive, and advertisements shall be placed in the local press warning the public of possible fraudulent use.
- If an issued receipt is lost and the payer applies for a duplicate, a “certified true copy” may be furnished but a new receipt form must not be used.
- Legal tender.
A local government council shall accept only the nationally accepted legal tender, issued by the Central Bank.
- Grants from Government.
- An unconditional grant shall be considered as part of local government revenue and shall be integrated in the local government budget, to be spent on priorities determined by the council taking into consideration national priority programme areas, in accordance with section 83 of the Act.
- Conditional grants from the Government shall be part of local government revenue but planned for, recorded and accounted for according to the grant conditions.
- Conditional grants shall be budgeted following an agreement between Government and the local governments and accountability and reporting for conditional grants shall be agreed with the responsible line ministry or donor.
- Equalisation grants shall be handled in accordance with the procedures agreed upon with the central Government.
- Donor’s funds.
- Local governments that receive donor funds shall ensure that those funds are spent solely on the objectives and activities specified in the agreements between the donor and the central Government or between the donor and the respective local governments.
- Donors’ funds shall be treated according to the conditions attached and agreed upon, and without prejudice to the foregoing—
- unconditional donors grants shall be integrated into the local government revenue, as part of the general fund.
- other donor funds shall be treated and utilised according to the agreement and separate accountability statements shall be submitted to the donors in accordance with the terms agreed upon, which shall include the format of reporting where necessary, and in accordance with these Regulations and the Local Government Act and copies of the statement shall be given to the Auditor General, the Minister and the Resident District Commissioner.
- Rules of reallocation and supplementary estimates as specified in Regulation 32 and 33 shall apply to donor grants except where agreed otherwise.
- Local governments shall make progress reports on how donor funds are utilised and regular financial statements shall be submitted either on a monthly or quarterly basis in accordance with the agreement entered into with the donor.
- Reports made under subregulation (4), shall indicate facts and figures relating to specific funded activities and overall achievements based on set targets and objectives and in case of construction works, performance certificates issued by a competent authority shall accompany the reports and in addition costs of repairs and the mechanical conditions of motor vehicles shall be included in the report on a monthly basis.
- Subject to the agreement entered into, external audits shall be carried out during the implementation of the activities and the local government shall be availed with any report made by external auditors and make any comments and both the report and comments thereon shall be submitted to the local government public accounts committee.
- The external auditors for purposes of this regulation shall be appointed by the Auditor General.
- Where separate annual financial statements have been agreed upon, the statement shall be submitted and audited within three months after the closure of the financial year and the financial statement shall show details of revenue, expenditure, bank reconciliation and any balance by the end of the financial year in accordance with the provisions of the accounting manual.
- Remittance of shared revenue collections by local governments.
- The chief executive of a lower local government shall ensure that a higher local government’s share of revenue collected is remitted promptly.
- The chief executive of a higher local government shall ensure that revenue collected by the higher local governments is remitted to lower local governments.
- Authority and responsibility for payments.
- An Accounting Officer is the officer with the overall authority and responsibility for payments under his or her control.
- Except as otherwise provided in these Regulations, all payments of public monies in Uganda shall be made in accordance with the authority and procedures prescribed in the Act and these Regulations.
- Record of the transaction in the accounts.
- The date of payment of any amount governs the date of the record of the transaction in the accounts; and therefore in no circumstance may payments be made before they are due for the purpose of utilising an anticipated saving on an item; nor may the inexpedient portion of any item be retained for the purpose of setting it in reserve to meet impending payments or to be carried to a deposit or other account.
- Expenditure properly chargeable to the account of a given year must, as far as possible, be met within that year and must not be deferred for the purpose of avoiding an excess on the amount provided in the estimates.
- Payment vouchers.
All disbursements of public moneys shall be properly vouched on payment vouchers prescribed in the accounting manual or issued by the Minister.
- Payment of advances.
- Payment of a recoverable salary advance to a council employee shall be authorised by the chief executive.
- Administrative advances to council employees shall be authorised by the chief executive and shall be accounted for within a month.
- The chief executive shall not authorise any advance to a council employee who has not accounted for any of the previous advances.
- The chief executive may authorise payment of an advance to a person or an organisation for the purchase of works, goods or services against a valid bank guarantee or in accordance with the Local Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006.
- Administrative advances shall not be paid to non salaried members of the council.
- Appointment of vote controllers and bank agents.
- The chief executive shall appoint vote controllers, every year after the approval of the budget estimates, who may be the head of a department or section or unit responsible for the votes within the approved estimates of the department or section and ensure that expenditure is not incurred in excess of provisions authorised in the approved estimates, or as may be amended by properly authorised virement, re-allocation and supplementary estimates.
- While retaining the ultimate overall responsibility for the votes under his or her control, a vote controller may delegate the powers to authorize or order payment for goods, services and works authorised by the contracts committee to his or her deputy or the most senior officer in the department.
- The chief executive shall appoint bank agents for each official bank account opened by a local government.
- Departmental warrants.
- The chief executive shall issue departmental warrants to vote controllers every financial year after the approval of budget estimates.
- The warrants shall give the following details—
- name of the vote controller; and
- full details of the vote, including the intended activities for the
- The vote controller shall enter the above details in the vote book and keep them reconciled with the head of finance’s general ledger.
- Vote book.
- Each vote controller and each agent in receipt of a departmental warrant shall maintain a vote book, in the form prescribed under these Regulations, to record commitments and expenditure on all votes under his or her control, including recurrent expenditure, capital expenditure and below-the-line accounts.
- The vote book shall represent the department’s comprehensive and up-to-date record of provisions authorized by the approved estimates or by official warrants, as amended by authorized virement, reallocations and supplementary estimates.
- A record must be kept in the vote book of the commitment of funds when local purchase orders, contract certificates and payment vouchers are raised, and their ultimate disbursement when payments have been made.
- Registration of specimen signatures.
- Vote controllers and their delegates signing cheques and authorizing payment vouchers and supporting documents, including local purchase orders, petty contract vouchers, contract certificates shall register their specimen signatures with the head of finance and head of internal audit and shall notify them of any cancellation or change of the authority.
- A member of the executive committee or any other councillor shall not be a signatory to any local government council financial document, including cheques, promissory notes or any other financing document.
- The head of finance shall send copies of all specimen signatures to Administration sub-treasuries and require all staff to satisfy themselves by scrutiny and comparison that signatures on accountable documents, vouchers and cheques match the specimen and in case of doubt, payment procedures shall be delayed until satisfaction is met.
- Files containing copies of specimen signatures shall at all times be available for the use of the head of internal audit, Auditor General and local government inspectors in the performance of their duties.
- Modes of payment.
- Payments to contractors and suppliers arising from the issue of authorized contract certificates and local purchase orders shall be made by a crossed cheque.
- Petty cash payments may be made by imprest holders in accordance with these Regulations.
- Open cheques may only be issued in respect of the following—
- in the designation of vote controllers for encashment and
payment of salaries, wages and allowances of support staff;
- to imprest holders for replenishment of their imprest.
- to councillors in respect of their emoluments, allowances and
other authorized expenses.
- Restrictions on cash payments.
- An officer shall not make cash payments unless he or she holds an established post, except in cases of emergency where the written authority of the head of finance must be obtained.
- Under no circumstances shall cash payments be made out of revenue collected.
- Payments which shall normally be made by cheque on behalf of a higher Council shall not be made by cash at a sub-treasury or from any imprest but shall be referred to administration headquarters for cheques to be drawn.
- Cash payments of personal emoluments, allowances, pensions, and other payments, shall only be made out of funds separately made available for the purpose.
- General and special imprest.
- Where it is necessary for an officer to be issued with official cash funds for disbursement on administration purposes for which the normal pre-authorization procedures cannot apply, he or she shall be issued with an imprest.
- A “general imprest” shall be issued on a regular basis to a subaccountant or senior departmental officer for the purpose of regular petty cash payments of the sub-treasury or department concerned.
- A “special imprest” shall be issued to a senior officer of the administration for a specific purpose and time, for example, for the duration of a project, official function or visit.
- Custody of imprest.
- Each imprest holder is responsible for the full amount of his or her imprest until it has been properly retired and any disbursements from his or her imprest, shall be made against properly certified imprest cash vouchers with supporting documents and receipts and entered in his or her cash book as prescribed in the accounting manual.
- A safe shall be maintained by the imprest holder to safeguard imprests held in the form of cash and officers holding larger amounts above the authorized standard petty cash, may deposit surplus cash not immediately required in official bank account with the permission of the head of finance, and the Accounting Officer shall be informed accordingly.
- Replenishment and retirement of imprest.
- Replenishment of an imprest requires the balancing of the cash book and completion of a payment voucher summarizing all transactions and vote codes and submitting them to the head of finance with all supporting documents and a cheque shall be issued which shall restore
the imprest to its original amount.
- Retirement of an imprest requires the balancing of the cash book and the completion of a retirement voucher summarizing all transactions and vote codes and submitting them to the head of finance with all supporting documents and any cash balance shall be paid in and a receipt issued in the name of the imprest holder.
- Special imprest shall be retired on or before the date specified on the imprest warrant but general imprests shall be retired on or before the last day of the financial year.
- Imprest shall be repaid when no longer required, or reduced when found to be excessive.
- Officers who have not retired imprest shall be surcharged and shall not receive additional imprest until the previous imprest is accounted for.
- Salaries and wages establishment registers.
- Each head of department shall be responsible for the maintenance of an establishment register recording full personal details and rates of pay of all established staff in the department and the register shall be kept up-to-date in accordance with the approved respective local government structure, to agree with the central personnel records, pay records kept by the head of finance and the nominal rolls upon which the approved estimates are based.
- At the end of each month, a head of department shall make a return to the chief executive indicating the number of employees and grades and any details of those who have resigned, died or absconded from duty.
- Personnel departments shall design an appropriate reporting form.
- Payment of salaries, pensions, terminal benefits and
- Payment of salaries and pensions shall be a first charge on local government revenue.
- All employees shall be paid monthly salaries and employees’ salaries and pensions shall be due and payable on the last day of each month but arrangements may be made to effect earlier payment, particularly at times of public holidays.
- All local governments shall be up to-date with salary and pension payments and shall keep a separate bank account for salaries and the chairperson of a council and the Chief Executive shall be held responsible for any contravention of this regulation.
- Payments for terminal benefits and compensation shall be in accordance with the Workers Compensation Act and other instructions issued by the Minister.
- Unclaimed salaries shall except in the case of out stations with shift workers or employees on the trek be immediately paid back to the vote from which they were paid using a receipt voucher.
- In the case of out stations with shift workers or employees on trek, the unclaimed salaries or wages shall be entered into an unclaimed salaries register and locked up in a safe.
- The employees claiming the salaries or wages kept under subregulation (6) shall sign the register with a witness before receiving the salary and wages.
- Salaries and wages entered in an unclaimed salaries register shall be paid back by receipt voucher if not collected within five working days of entry in the register.
- Method of payment of employees costs.
- Payments of employees costs shall, as far possible, be made by direct bank transfer.
- If deemed necessary by the head of finance, payment may be made by cheque.
- Only in exceptional circumstances, certified by the chief executive, shall cash payments be made, in accordance with the system laid down in the accounting manual.
- Payment of local governments emoluments and allowances.
The Minister shall issue instructions on payments of local governments emoluments and allowances in accordance with regulation 1 to the First Schedule of the Act.
Part VI—Accounting And Controls
- Accounting policy and chart of accounts.
The Minister shall in consultation with the Accountant General issue the accounting policy and chart of accounts to be used by the councils.
- Accounting manual and Minister’s instructions.
- Notwithstanding these Regulations, the accounting procedures, methods, forms, formats of accounting records and other requirements to be used by local governments are as set out in the accounting manual or shall be issued by the Minister in conformity with these Regulations.
- The accounting manual is an official subsidiary document of these Regulations, and all systems, procedures and controls specified in the accounting manual represent the lawful application of the principles contained in these Regulations.
- An accounting system, policy or basis shall not be introduced and a change made in the existing system or policy unless the system or change has been approved by the Minister in consultation with the Accountant General and the Auditor General.
- In order to comply with required accounting systems, the properties, and assets of a local government, shall be properly registered, titles issued, and valued and that requirement shall apply to both movable and immovable properties and assets and it shall constitute a fixed asset register.
- Accounting records of local governments.
Each local government council shall maintain the following—
- a cash book;
- a journal;
- a general ledger and subsidiary ledgers;
- an asset register;
- a vote book.
- Accounting records at administrative units.
- Each administrative unit shall keep the following accounting records—
- a cash book;
- a revenue register;
- a general ledger; and
- a vote book.
- In addition, each parish or ward and village council shall maintain registers of all tax payers and business units and make returns to the sub-county council or the division council as the case may be.
- District hospital accounts.
- The medical superintendent of a district hospital shall account to the chief executive in accordance with these Regulations.
- The accounting system in existence at the commencement of these Regulations shall continue until the Minister issues instructions for district hospitals to change from that system.
- The medical superintendent shall prepare financial statements in accordance with these Regulations and submit them to the chief executive on a monthly basis and the end of each financial year income and expenditure statements shall be prepared and presented to the council as part of final accountability for the year.
- The accounting officer shall keep the line Ministry responsible for health services informed of the financial status of district hospitals.
- Conditional grants to district hospitals shall be transferred to the respective hospital without any deductions and in accordance with the conditions attached by the Government.
- Health units accounts.
- The officer in charge of a health unit is responsible for the assets and funds and shall ensure accountability to the chief executive and that a bank account is maintained on which money received is banked.
- Signatories to the bank accounts shall be registered with the sub-county chief and the executive committee of the sub county shall be informed.
- The officer in charge of a health unit shall maintain a cash book for recording receipts and payments of the health unit transactions and the cash book shall be reconciled monthly to bank statement.
- The officer in charge of a health unit shall submit monthly financial statements to the sub-county and where the health unit is unable to prepare the financial statements, assistance shall be sought from the sub-accountant of the sub-county.
- Copies of the financial statements shall be copied to the district chief executive.
- Accounts of secondary schools and capitation grant.
- Capitation grants shall be transferred to the secondary schools in districts in accordance with the policy governing such grants.
- The head teacher shall account to the relevant council at the end of the each academic term and income and expenditure statements shall be presented to the council at the end of each calendar year.
- The head of internal audit of the district shall audit books of accounts of schools and submit a copy of the Audit report to the Local Government Public Accounts Committee.
- Financial management of primary schools.
- The head teacher is responsible for the grants, fees and education tax received and shall ensure that a bank account is opened on which money received is banked.
- Signatories to bank accounts of any primary school shall be registered with the subcounty chief and the executive committee of subcounties shall be informed.
- A minimum of two signatories shall operate a school account and one of the signatories shall be a non-teacher member of the management committee.
- The head teacher shall maintain a cash book for recording receipts and payments of the school transactions and the cash book shall be monthly reconciled to bank statement.
- The sub-accountant shall inspect the school financial records and make a report to the executive committee as regularly as possible.
- The head teacher shall submit the schools financial statements to the subcounty council for each academic term, and where the head teacher is unable to prepare the financial statements, assistance shall be sought from the sub-accountant of the sub-county.
- Copies of the financial statements shall be given to the head of finance and the chief executive of the subcounty.
- General control of finances of administrative units.
The general control of finances of administrative units shall be the responsibility of the chief executive while the routine financial transactions shall be managed by the sub-accountant.
- Security of accounting records.
- Principal accounting records shall be kept in strong rooms or fireproof locked cabinets when not in use.
- An accounting record shall not be removed from the room or safe-storage facility where it is normally kept except for auditing, production in court, or is impounded under legal warrant for fraud investigation and an official receipt shall be obtained.
- Auditors and inspectors shall be given proper facilities to enable them to carry out their audit and evaluations without having to remove principal accounting records from administration premises.
- Retention or destruction of accounting records.
- The originals and copies of vouchers and used receipts may be destroyed six years after the dates of the transactions to which they relate, if they have been audited.
- If storage difficulties make it desirable to destroy records earlier, the written agreement of the Auditor General shall be obtained and in any case no destruction of records shall take place in less than four years even where the Auditor General is to give authority.
- The principal accounting books and records shall be retained for fifteen years and the personnel records shall be retained for at least thirty years.
- Accounts of local governments.
- Every local government council and administrative unit shall keep proper books of account and other records in relation to them and shall balance its accounts for that year and produce statements of final accounts within three months from the end of each financial year in accordance with the Public Finance and Accountability Act, 2003.
- The format and schedules shall be as indicated in the accounting manual or according to the Minister’s instructions.
- Annual closure of accounts.
The annual closure of accounts shall include among others the following—
- boards of surveys for stores and cash;
- journalise any late submitted accounting entries;
- balance all below-the-line ledgers and control accounts;
- imprest must be fully retired;
- receive and reconcile all project account details; and
- balancing of all council’s accounts.
- Audit of accounts.
The chief executive shall submit the accounts prepared in accordance with these Regulations to the Auditor General for audit in accordance with section 87 of the Act.
Part VII—Treasury Management
- Banking and bank accounts.
- Council bank accounts shall be operated by the chief executive and the head of finance of the respective councils.
- Agency and projects accounts shall have the head of department appointed as a vote controller as a third signatory.
- A council bank account may only be opened in the official designation of the local government council on the authority of the chief executive.
- The chief executive at district and municipal council level shall appoint signatories from council employees in respect of all levels of council bank accounts, and a councillor, chairperson, deputy chairperson, the speaker or deputy speaker shall not be a signatory.
- Council bank accounts shall be operated in accordance with these Regulations and the accounting manual and any supplementary instructions issued by the chief executive and head of finance, so long as the supplementary instructions conform to these Regulations.
- All funds of local governments shall be banked promptly where banking facilities exist and the accounting officer shall determine the period within which to bank the funds where facilities do not exist.
- At the close of each financial year, the head of finance shall supply the Auditor General with a list of all council bank accounts opened and in operation at any time during that financial year, and accounts closed during the course of the financial year under consideration shall also be provided.
- Opening of bank accounts.
- Subject to Regulation 71, if it is necessary to open a council bank account, the officer concerned shall apply in writing to the chief executive, stating the bank where the account is to be opened, the purpose for which it is required and the person to operate the account.
- When the opening of the bank account is authorised, the chief executive shall notify the branch of the bank concerned, and the officer who applied.
- The officer concerned shall make all necessary arrangements with the bank for the supply of specimen signatures and other requirements.
- All authorized signatories of council bank accounts shall register their specimen signatures with the head of finance and the head of internal audit and shall notify them of any cancellation.
- The executive at village level shall authorize the opening of the bank accounts and the signatories shall be the village chairperson and the parish chief.
- Bank reconciliation.
- A vote controller, appointed as signatory to a bank account shall reconcile the cash book with the bank statements at least once a month and a reconciliation statement prepared in the form set out in Part VI of these Regulations, every month showing all reconciling items between the cash book and the bank.
- A bank reconciliation statement shall be prepared in the format indicated in the accounting manual, and entered in the cash book and shall be certified as correct by the head of finance within fifteen days after the end of each month.
Any investment by the council shall be authorized by the council and an investment register shall be maintained showing details of each investment and interest on all investments in accordance with the format provided in the accounting manual and Minister’s instructions.
- Fixed deposits.
- The head of finance may with the approval of the chief executive invest cash surpluses, in excess of normal requirements, in a fixed deposit bank account for a short term period of up to twelve months.
- A separate ledger account shall be kept for each deposit and the total of the deposits shall balance with the amount in the control account in the general ledger in accordance with the provisions of banking.
- Interest earned on a fixed deposit account shall be treated as part of council revenue.
- Borrowed funds.
- A local government may raise funds by borrowing in accordance with the Act.
- The loan shall be utilised for purposes for which it is intended and a separate loan account shall be opened.
- The local government shall make progress reports on utilization of the loan funds.
- The provisions for the loan agreement relating to principal repayment and interest payments must be adhered to.
- A local government shall borrow after the executive committee has assured the council that repayments shall be met without default and salaries of employees, as well as other satisfactory obligations shall not be affected by the loan repayments.
- A local government shall maintain a loan register.
- A council bank account shall not be overdrawn nor any temporary advance obtained from the bank without the prior permission of the council and the chief executive shall ensure that any permission of the council or other authority required for borrowing under the Act has been obtained before the overdraw or temporary advance.
- In the event of any account being overdrawn without proper authority, the officer responsible shall refund any bank charges or other losses incurred, including the borrowed amount.
- Acceptable cheques.
- Only cheques drawn on banks in Uganda may be accepted as revenue.
- Cheques drawn on banks outside Uganda shall not be accepted without the prior approval of the chief executive, who shall be personally liable for any loss resulting from acceptance of that cheque.
- Post-dated cheques, promissory notes from individuals and other organizations, except those from the Bank of Uganda, National Treasury and Ministry responsible for finance and “I Owe You” shall not be accepted by local governments.
- If a cheque payment is for a service, that service shall only be provided after the cheque has been cleared through the banking system.
- Cashing of cheques.
Cheques shall not be cashed for any person except in the case of named officers of the council for the purposes of imprest and the payment of salaries, and even then by written authority of the head of finance.
- Dishonoured cheques.
The head of finance shall maintain a list of dishonoured cheques’ defaulters and unless a genuine mistake has occurred, the defaulters shall be refused cheque payment facilities and required to settle their dues in cash, and the law in place regarding dishonoured cheques shall be evoked.
Part VIII—Assets Management
- Custody of stores and other assets.
- The head of finance shall exercise general supervision over all stores maintained by departments of the council, including storage accommodation, the calibre of stores personnel, and the maintenance of proper accounting records.
- A head of department shall be responsible for all allocated and unallocated stores maintained in his or her department and in particular with regard to the duties specified in subregulation (1) and the appointment of competent stores control officers and storekeepers.
- Programme, project stores and assets shall be managed in accordance with conditions set down by the Ministry, line Ministry or donor for the project store and assets.
- Control arrangements.
- Heads of department shall consult with the head of finance at intervals of not more than one year on the economy and efficiency of their ordering, storage and accounting arrangements for stores and other assets and the consultations shall determine which methods and control procedures shall be used, over stores and other assets.
- It is the duty of heads of departments to ensure that the accounting and control procedures for stores and other assets laid down in these Regulations and the accounting manual are followed at all times.
- Heads of departments are responsible for ensuring that the following items are managed in accordance with the systems laid down in the accounting manual: heavy plant; light plant; working equipment; loose tools and inventories at all premises under their control
- Stores control officer.
- There shall be a stores section for every district and urban council and every district and urban council shall employ a suitably qualified and experienced officer to be the stores control officer and head of that section.
- The stores control officer shall ensure that all accounts and procedures in respect of the stores in his or her charge are operating efficiently and effectively at all times, and that the storekeepers are carrying out their duties properly.
- The stores control officer shall liaise with the head of finance to ensure that the section’s stores ledgers are balanced with the stores control accounts in accordance with these Regulations and the accounting manual.
- Allocated stores.
Allocated stores shall be kept to a minimum and restricted to those consumable items required for everyday use and the specialised needs of the department, and for which the full stores procedures of unallocated stores are not justified for reasons of economy and size and in the interests of security, economy or financial control, the head of finance, may require heads of departments to reduce or close down allocated stores, or apply unallocated stores procedures to those departments.
- Register of vehicles and heavy plant.
Heads of departments shall ensure that all items of vehicles and heavy plant owned, operated or maintained by their departments are recorded in a register of vehicles and heavy plant in the form set out in the accounting manual.
- Inventories of light plant, working equipment and loose tools.
Heads of departments shall ensure that inventories are kept of items of light plant, working equipment and loose tools issued to workshops, installations, works sites, or to employees for use in connection with their official duties and inventories shall be kept in the form prescribed by the accounting manual.
- Inventories of machinery, furniture and other equipments.
- Heads of departments shall ensure that inventories of the contents of all houses, offices, workshops, hospitals, schools and other enclosures occupied or in the charge of public officers, particularly as to machinery, furniture, movable fittings, equipment and livestock in the form prescribed in the accounting manual are kept.
- The head of internal audit shall ensure that properties of schools and hospitals are properly registered in the asset registers and the respective bodies managing those institutions informed of the status of the properties.
- Registers of land and buildings.
Heads of departments shall ensure that registers in the form prescribed under the accounting manual are kept of all land and buildings owned, rented or occupied by their departments and where title deeds exist, such shall be kept in a safe by the head of finance, to be inspected annually by the Auditor-General, and a schedule of these assets shall appear as part of annual accounts.
- Handing over certificate.
When an officer entrusted with stores and other assets hands over to another officer, both officers shall sign a handing over certificate, copies of which shall be sent to the chief executive, head of finance and head of internal audit and the handing over certificate shall be accompanied by a comprehensive list of items handed over.
- Centralisation of stores.
Notwithstanding regulations 81 to 84 all stores shall be centrally controlled, except those in schools and hospitals in which case the institutions referred to shall manage the stores and a schedule sent to the chief executive and the head of internal audit, on quarterly basis.
- Sale of stores.
Disposal of stores and other assets shall be in accordance with the Local Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006.
- Loss through damage.
Any diminution in value of land, buildings, stores and other assets through damage or accident or abnormal wear and tear shall be regarded as a loss and the losses procedures under regulation 112 shall be followed.
- Use of spare parts.
Where a head of department wishes to “cannibalize” unserviceable council owned stores or other assets for spares, the approval of the contracts committee shall be obtained.
- Responsibility for safe custody of public moneys, and other assets.
- Every officer who is in possession of any public monies, stores, other assets, land and buildings, is responsible for their safe custody and
protection and for any loss.
- An officer who has the duty to inspect, control or supervise another officer in possession of any public monies, stores, other assets, land and buildings shall accept responsibility for a loss unless it can be demonstrated that the loss was not facilitated by his failure or neglect to carry out his duty or to make adequate arrangements to secure safe custody and protection.
- Security of cash and valuables.
All officers of the council who hold public money, documents and books of account, shall ensure their safe custody and take adequate steps to ensure their protection, handling, security and banking, as set out in the accounting manual.
- Safes, cash boxes and keys.
- All safes and cash boxes must be obtained, managed and controlled as set out in the accounting manual.
- The head of finance shall keep a register of safes and cash boxes clearly showing the location of each and the officer responsible.
- An officer who holds the original key to a safe or cash box is personally responsible for its safe custody and must remain present when the facility is opened or locked where double locking with separate key exist
- It is the responsibility of the officer handing over a key to ensure that his or her successor is informed of the identity of any other key- holders and the location of the duplicate key.
- The cost of altering or changing a lock and providing new keys may be charged to the officer responsible for the loss and the officer shall also be held responsible for the loss of the contents of the container if the loss of the key is caused through his or her negligence.
- Private monies.
Officers are prohibited from keeping private money or effects in council strong-rooms, safes or cash boxes and any private money found in any container shall be credited to revenue at the direction of the inspecting
- Legal action for recovery.
- The head of finance and heads of revenue collecting departments should ensure that prompt reminders are sent when revenue becomes overdue.
- If a reminder fails to produce payment within thirty days of its dispatch, legal proceedings shall be instituted
- Control of receipt books.
- The head of finance shall make appropriate control arrangements for the procurement, storage and issue of official triplicate receipt books, tickets and licence forms for all revenue collection and shall take steps to prevent the use of unofficial receipt books, tickets and licence forms.
- Used receipt and licence books may be destroyed after six years in consultation with the Auditor General.
- Obsolete receipt and licence books shall be returned to the head of finance who shall acknowledge receipt in writing and arrange for their disposal in consultation with the Auditor General.
- Irrecoverable revenue.
- The executive committee shall be the authority to recommend “waivers” to council.
- The chief executive shall make recommendations on “waivers” to the executive committee on a quarterly basis;
- Recovery of revenue may not be waived if it has become irrecoverable as a result of delay in enforcing payment and where such is the case, the officer responsible for the delay may be held personally liable.
- Arrears of revenue returns.
- At the end of each quarter, the head of each revenue collecting department shall prepare an arrears of revenue return, showing all arrears of revenue appearing in the revenue registers on the last day of the quarter, and submit it to the head of finance to reach him or her not later than three weeks after the end of the quarter.
- The head of finance shall consolidate all returns and submit them to the executive committee with his or her comments and recommendations.
- The executive committee or any other organ of the council may call on heads of departments to give explanations and may direct that loss reports shall be prepared and action taken in accordance with regulation 115.
- The head of finance shall report on the value of “waivers” to the council on a quarterly basis.
- Convening of boards of survey.
- On the last day of the financial year, the chief executive shall appoint boards of survey to verify the cash balances and security arrangements at the main cash office, all sub-offices and other administration establishments holding cash or items of value, as well as inspect and verify all goods on charge and belonging to the administration.
- The main annual surveys for cash shall be carried out on the first working day of the new financial year and that of stores shall be carried out as soon as possible after the close of the year and at other times, surprise surveys shall be arranged.
- If a board of survey cannot be held on the first working day of a new financial year, it shall take place not later than two weeks from the end of the financial year.
Part IX—Risk Management.
- Risk management and internal control.
- The head of finance is responsible for advising on risk management and effective systems of internal control.
- The arrangements need to ensure compliance with all applicable legislation and regulations, and other relevant statements of best practice.
- The arrangements shall ensure that public funds are properly safeguarded and used economically, efficiently, and in accordance with the statutory and other provisions that govern their use.
- It is the responsibility of heads of departments of the council to establish sound arrangement, consistent with guidance given by the Head of Finance, for planning, appraising, authorising and controlling their operations in order to achieve continuous improvement on economy, efficiency and effectiveness and also for achieving their financial performance targets.
- Establishment of Internal Audit Units.
- Every district, city, municipal or town council shall have an internal audit unit whose responsibilities are set out in section 90 of the Act and detailed in the audit manual.
- All internal audits shall be carried out in accordance with the requirements of the Act and the internal audit manual and shall be considered as statutory audits required by law.
- Relationship between head of internal audit and head of finance.
The head of internal audit shall submit reports direct to the council, but there shall be harmony and co-operation with the chief executive and head of finance and his or her staff shall report on the systems and operations of the administration whether efficient or effective or economical or free from fraud and other malpractices and are in accordance with these Regulations.
- Internal audit reviews.
In addition to the duties set out in Regulation 12 and as set out in the internal audit manual, the head of internal audit shall carry out regular reviews to ascertain whether the administration receives value for money in all its activities.
- Special investigations.
The head of internal audit shall be prepared to carry out special investigation when called upon to do so, and where the Auditor General is unable to do so, as set out in the internal audit manual.
- External audit.
- The council’s accounts will be scrutinised by the Auditor General.
- The Auditor General shall have rights of access to all documents and information necessary for reaching an audit opinion.
- Computers and information systems.
- All council transactions must be processed through the accounting information systems of the council as specified by the Minister from time to time, and which shall progressively include computerized accounting and control systems.
- To ensure satisfactory standards and control, these systems may only be used with the approval of the Minister.
- Computer and information security.
- The chief executive shall designate an officer to ensure that adequate information and communication technology policies are established and are applied to enable adequate security and protection over computers and of data held on computers or information systems operated by the council.
- All employees have a responsibility to ensure that they do not cause the loss, unauthorized destruction or disclosure of data held on information systems or computers operated by the council.
- Each head of department shall be responsible for ensuring that information and communications technology policies are implemented within their department.
- All officers and members should comply with the requirements of, and control over the use of e-mail and the internet and software piracy guidelines as set out in the auditing and accounting manual.
- Insurance policy and principals.
The Minister shall issue guidelines regarding insurance policy and principals for the local governments.
- Preliminary loss report.
- The head of the department in which a loss has occurred shall make, immediately on discovery of the loss, a preliminary report to both the head of internal audit and the head of finance and a copy shall be sent to the accounting officer.
- Action on a loss discovered by the board of survey shall be initiated by the head of finance, in consultation with the accounting officer.
- The head of internal audit shall promptly carry out an assessment of the situation in respect of each preliminary loss report, and if he or she suspects that theft or fraud has occurred, he or she shall request the relevant police authority to investigate.
- No head of department shall withhold a report on any loss, either known or suspected, even if restitution has been or is to be made.
- Minor losses.
If the preliminary internal audit assessment reveals that a minor loss has occurred, as defined in the accounting manual, and not involving fraud or negligence, the procedures set out in the accounting manual shall be followed.
- Loss report forms.
For every loss, other than a minor loss the head of department shall prepare a set of loss report forms as set out in the accounting manual, and send them to the head of internal audit.
- Loss report to executive committee.
The chief executive shall report all losses to the executive committee in accordance with the procedures and formats set out in the accounting manual.
- Action on final loss report.
- On receipt of the chief executive’s final report on a loss, the executive committee shall consider the report and issue such directions as it sees fit regarding the recovery or write-off of the loss, within the terms of regulation 117 and steps to be taken to prevent a recurrence of such loss, and may recommend that a surcharge be imposed in accordance with regulation 118.
- A copy of the chief executive’s final report on a loss, together with the decisions and recommendations of the executive committee, shall be reported to the council and sent to the Resident District Commissioner and Auditor General and the chief executive shall also retain a copy on file for inspection and audit purposes.
- Writing-off of losses.
The executive committee may authorize the writing off of losses in accordance with the values, procedures and reporting requirements as set out in the accounting manual.
- Surcharge powers.
- The executive committee may, after consideration of the final report of the chief executive on a loss, recommend that a surcharge amounting to the whole or part of the value of the loss be imposed on any officer, employee or anybody responsible including a councillor.
- In addition the executive committee may, after consideration of any report by the chief executive, recommend that a surcharge amounting to the whole or part of the funds involved, be imposed on anybody including a councillor, officer or employee who—
- sanctions expenditure in excess of the authorized provision
remaining unspent in the relevant item in the estimates;
- sanctions expenditure of a kind or for the purpose which is not
authorized by the approved estimates;
- sanctions expenditure without obtaining any necessary approval
to incur which may be required by these Regulations; and value for money as an objective if procurement has been achieved;
- is responsible for any expenditure which is found to be unsupported by duly authorised or receipted vouchers.
- The recommendations of the executive committee shall be reported to the council and forwarded to the Local Government Public Accounts Committee who shall determine whether or not to surcharge the councillor, officer or employee.
- An appeal against surcharge under this regulation may be made to the Minister within one month after the imposition and the Minister shall confirm or set aside any surcharge made and his or her decision shall be final.
- Any sum of surcharge on any person under these Regulations, shall be a debt due to the council payable within one month, or such longer periods as the executive committee may approve, on the date of imposition, or on the date the executive committee receives the Minister’s confirmation or decision.
- Accounting for losses.
- The system of accounting for losses and write-offs and the opening and closing of advance accounts to record the liability of persons held responsible, is detailed in the accounting manual.
- The head of finance shall take all steps to collect sums due from persons held responsible for losses without waiting for the final ascertainment of the value of losses and in so doing, care shall be taken to obey any instructions from the relevant police authority or legal officer not to accept cash pending the outcome of the legal proceedings.
- Security for cash in transit.
The head of finance shall be responsible for ensuring adequate security for cash in transit is in place.
- Liability of the council.
An employee shall not admit liability or take any action or enter into any correspondence admitting liability on behalf of the council without approval of the chief executive.
- Use of private vehicles.
Any officer of the council who is authorised to make use of their own vehicle in the execution of the council’s business shall be responsible for effecting adequate insurance cover for such use and shall produce to their head of department or the head of finance on request, evidence of the adequacy of the cover.
Part X—Offences And Penalties.
- An accounting officer who—
- fails to comply with any of these regulations without reasonable
- incurs expenditure for which there is either insufficient or no
provision in the approved estimates without reasonable excuse;
- makes commitments without available cash for payment
without any reasonable excuse;
- fails to ensure that a budget desk is in place and the revenue
enhancement, procurement, capacity and development plans, budget framework papers, annual estimates of revenue and expenditure are prepared within the prescribed time and manner without any reasonable excuse;
- fails to be up-to date with salary payments and keep separate
bank accounts for salaries without any reasonable excuse,
commits an offence.
- A political leader or council employee, who without any reasonable excuse fails, to comply with any of these Regulations, the audit and accounting manual or Ministers instructions commits an
- A head of finance who—
- fails to produce monthly financial reports for submission to the
executive committee in the specified time without any reasonable excuse;
- fails to ensure that revenue collectors carryout their duties
properly to ensure that all revenue due to the administration is promptly collected in the approved manner and banked intact without any reasonable excuse;
- fails to keep proper books of account and to balance the
accounts for the year and produce statements of final accounts within three months from the end of the year without any reasonable excuse,
commits an offence.
- A head of a department fails to produce and submit department financial and progress reports to the head of finance within seven days after end of each month without any reasonable excuse commits an offence.
- A head of internal audit who fails without reasonable excuse to produce a quarterly audit report in accordance with the provisions of these regulations and the internal audit manual commits an offence.
- A Senior officer who deliberately gives wrong instructions to a junior officer leading to financial loss to a local government commits an offence.
- A public officer who—
- fails to ensure safe custody of public money, documents and
books of account;
- sells stores belonging to the council to the public without the
authority of the executive committee and before the approval of the local government contracts committee;
- fails to account for council funds without any reasonable
- fails to be responsible for the due performance of financial
duties, for the proper revenue collection and custody of all council money, stores, and assets receivable, without any reasonable excuse;
commits an offence.
- A revenue collector who fails to account for revenue collected without reasonable excuse commits an offence.
- A cashier who fails to account for council funds without any reasonable excuse commits an offence.
- A person who commits an offence under regulation 123 is liable on conviction to a fine not exceeding two hundred and fifty currency points or imprisonment not exceeding three months or both.
- Where a loss or deficiency of councils funds or assets occurs and the council or the Minister is satisfied after due enquiry, that the negligence or misconduct of the public officer caused or contributed to the loss or deficiency—
- the amount of the loss or deficiency;
- the value of the property destroyed; or
- the cost of replacing or repairing the damage to that property,
shall be a debt due to the council and shall be recovered from the public officer administratively or through a court of competent jurisdiction.
- In this regulation, reference to a public officer includes a person who has been a public officer but is retired.
- Where the negligence or misconduct of the public officer is not the sole cause of any loss, deficiency or destruction resulting in an action under subregulation (2), the amount recoverable from the public officer may be restricted to only the cost of replacing or repairing the loss, deficiency, damage or destruction that the council or the Minister considers, after due enquiry, to be just and equitable, having regard to the contribution made by the public officer to that loss, deficiency, damage or destruction.
- In addition to the penalties, specified in subregulations (1) to (4) the council or the Minister may recommend disciplinary action ranging from dismissal, suspension or a warning letter in accordance with the public service Standing Orders.
Part XI—Miscellaneous Provisions.
- Utilisation of funds at village level.
The Minister may give instructions on the utilisation of funds at the village level or to a community group which receives public funds.
- Reporting of deaths, dismissals etc.
- Death, dismissal, suspension or interdiction of an employee shall be promptly reported to the head of finance by the employee’s head of department to take the necessary action.
- Heads of department who fail to comply with this regulation shall be held responsible for losses incurred.
- Guides, manuals and other publications.
Guides, manuals and other instructional publications to assist in financial management in local governments shall only be authorised by the Minister.
- Compliance with these Regulations.
The Auditor General, local government inspectors and any other state organs authorized by law shall check for compliance with these Regulations and make reports.
- Handing and taking over of public offices.