Continued from top story

Government has not been increased to cater for the rising number of districts.
The local governments’ share of the national budget has been irregular over time. In the 2003/2004 financial year, it was about 38% but dropped to 20% in the 2008/2009. District leaders say this figure is too small to cater for all the work they do.

The Government gives districts quarterly conditional grants, unconditional grants and local revenue. However, most of the funds sent to districts are fixed.

Conditional grants are fixed to recurrent development, such as supporting UPE, USE and primary healthcare programmes.

Unconditional grants were initially supposed to be spent on projects decided on by the districts. They constitute about 40% of the disbursements, but, according to the Iganga LC5 chairman, Asuman Kyafu, most of this money is spent on paying salaries.

Under local government financial regulations, districts are supposed to co-fund development projects, using locally-generated revenue. In the last six years, most districts have failed to co-fund NAADS and UPE programmes, says Wycliffe Karazarwe, the president of the Uganda Local Governments Association (ULGA).

Soroti District Chairman Steven Ochola says because of shortfalls in revenue collection, the Government must continue with Graduated Tax compensation.
The Government has agreed to spend at least sh25b on compensation to this financial year.

But ULGA says this is still insufficient. “They should raise the figure to sh45b or else we shall go on strike,” Ssemakula says.

In the 2007/2008 budget, sh12b was shared among 80 districts. This implies that if the number of districts was lower, the funds could have been shared more usefully.

According to the Local Government Financial Act, local governments are supposed to regularly approve and execute annual budgets and produce books of accounts after a financial year.

However, Parliament’s Local Government Accounts Committee found that most districts had large amounts that were not accounted for.

Thus, there remain a number of challenges to financial decentralisation.