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We thank Maria Albino-War and Jiri Jonas for helpful comments on an earlier draft.
However, Breton (2001) argues that central provision could also be tailored to meet local preferences and could also be managed efficiently.
For example, a large fraction of local civil servants may continue to respond directly to upper government tiers, or certain mandates can only be partially delegated to local authorities, which may break the links and internal coordination between the services they provide.
An Ordinance introducing democratic local governments was issued in 1949.
The total number of districts jumped from 33 in 1980 to 44 in 1997, 56 in 2000 and 78 by 2006.
In addition, political discussions have increasingly concentrated on developing a federal government framework, commonly referred to as FEDERO.
As noted earlier, since 2005 districts are allowed to group voluntarily to form regions. These regions would be able to establish a regional assembly with elected representatives, and a regional government with ministers appointed by the regional kings, and approved by the regional assemblies. The regional governments would control the policies currently devolved to the districts.
At lower-government tiers, the administrative role of the chairperson and local government is insignificant, as it involves little use of financial resources.
To avoid political influences, councilors are not allowed to campaign on a party basis.
For example, total spending in the health sector is increasingly reliant on earmarked funds provided by international donors and administered by the Ministry of Health, such as the Global Fund for AIDS, Tuberculosis and Malaria.
In general, wealthier people have usually been able to easily evade payment, while the poorest have been forced to pay the highest rates because the appropriate payment tickets were not available.
The graduated tax represented some 60 to 80 percent of local tax collections prior to its suspension.
According to the Local Government Act, 35 percent of the collections attracted by the villages and parishes (and submitted to the subcounties) must be transferred to the upper-level district. Of the remaining 65 percent, 5 percent stays at the subcounty councils, 5 percent of the parishes, and 25 percent to the villages; urban authorities have a different sharing formula.
These grants are financed from taxes collected at the national level, and from resources provided by Uganda’s international development partners to the country.
These include the submission of quarterly work plans and execution reports by the districts, detailing expenditures made and the associated activities undertaken on the basis of agreed work plans prior to each quarterly release of resources. These requirements under the PAF grants have provided assurances to donors, who have channeled a large amount of budget support through this virtual fund. The World Bank provided financial and technical support to the authorities in this area.
Some other issues, such as the lack of an allowance for the poorest and far-away jurisdictions—particularly, districts—to pay higher wages and incentives to attract qualified staff, and resources to compensate for insecurity in the regions affected by armed conflict are also to be resolved.
There are, however, no official figures on aggregate local government borrowing.
For example, the World Bank’s CIFA (2004) reported that, on the basis of a benchmarked average for districts, aggregate expenditures were at 87 percent of the budget, and total revenues at 91 percent, although local revenue collection was well below budget, averaging just 76 percent of the projected amount (2002/03). On the basis of a sample, deviations between budgeted and actual amounts were most significant at a departmental level—while most sector departments underspent against budget, the problem was chronic for those departments funded by locally generated revenues.
The problem is particularly acute in the case of primary school teachers assigned to rural areas. A particularly strong increase in arrears took place in 1997 with the expansion of the UPE—reports at the time suggested that about 89,000 teachers were working in public schools, while only 74,300 were registered in the payroll. These arrears had to be partly cleared through a World Bank credit. See IMF (1998) [EBS/98/58].
The stock amounts to about U Sh 17 ½ billion.
Two main pilot programs are in place. The most important is the roll-out of a computerized Integrated Financial Management System (IFMIS) both at the central and local-government level, intended to improve cash planning and management, and imposing automatic expenditure control and auditing—a sound initiative that will only be fully in place over the medium term. In this light, technical assistance from the International Monetary Fund has intended to develop a manual Commitment Control System for the use of the local authorities, to serve as a transitory mechanism while the IFMIS is rolled out to all jurisdictions.
As an exception, the district of Kabale has developed its own cash management systems. The district has a cash-flow budget that sets out the expected timing of inflows, from different revenue sources and the department expenditure ceilings, over a two-month period. The district also keeps quarterly cash projections and schedules for disbursement of the spending departments (World Bank 2004).
Compliance with the requirements is relatively higher during the year—at about 85 percent—and lower for final accounts—at 40 percent (World Bank 2004).
Including several conditional grants covering the primary and secondary and tertiary education levels.
The education sector has had at least five PETSs since 1996. Every year, an area of concern identified during the semiannual sector review is evaluated through PETSs. The last four assessments have covered: (i) two studies on the status of Universal Primary Education system; (ii) the Teachers’ Recruitment, Deployment, and Payroll Management; (iii) the Value-for-Money of the School Facilities Grant; and (iv) the Cost-Effectiveness and Efficiency of Education Spending, for which the terms of reference are currently being prepared.
The first PETS in the Ugandan education sector, undertaken in 1996, disputed official records, which seemed to understate the increase in primary enrollment during 1991–1995, following an increase in funding. Despite the increases in primary enrollment, the study also showed a significant amount of leakage of resources before they reached schools, and serious accountability problems on nonwage education spending (World Bank 2003).
Data from the Ministry of Education’s Statistical Abstract for 2003 also shows a net enrollment ratio of slightly over 100 percent
Unfortunately, no distinction between rural and urban areas is available in regional data.
In fact, according to the Ministry of Education survey for the year 2001, distance to school represents for 24 percent of the persons interviewed the main reason for not attending school.
The problems with updating the payroll data may either overstate or understate these indicators. On the one hand, there may be teachers providing services not incorporated in the registry; at the same time, the authorities have often recognized the presence of “ghost” teachers in the payroll.
The health sector has also had several surveys to track performance in specific areas. Specifically, PETSs have been implemented for: (i) funds under the primary health care conditional grant (2001); (ii) drugs (2002); and (iii) conditional grant for shared services (2003).
There is widespread public recognition that Uganda has been one the most successful countries in fighting HIV/AIDS. This fight has been engaged both the central and the local governments, but there is no information on the specific actions at the subnational level.
The water and sanitation sector has also implemented PETSs. In 2002, at the request of the MFPED, a technical audit/value-for-money study was initiated for the rural water and sanitation conditional grant. While some questions arose about the methodology and overall quality of both studies, their completion allowed the Ministry to focus its efforts on a deeper analysis of areas of concern.
Interestingly, the share of donor-earmarked financed projects in the total development budget for the water sector has also been quite modest, at rates below 10 percent of total spending.