Butambala County Member of Parliament, Muwanga Kivumbi has been granted leave of Parliament to present a modification to the Public Finance Management Act 2015. This amendment primarily suggests that any additional expenses must be approved by Parliament beforehand.
During the plenary session on Wednesday last week, the Deputy Speaker, Thomas Tayebwa conducted a vote on the motion, which received unanimous support from the House, thus giving Kivumbi a go ahead to introduce amendments to the existing law.
Currently, Section 25(1) of the Public Finance Management Act 2015 (as amended) allows government to expend up to three percent of the approved national budget for the fiscal year without needing advance endorsement from Parliament. This, Kivumbi, who doubles as the shadow finance minister, says violates the Constitution.
“Section 25 of the Public Management Act contravenes Article 156 (2) of the Constitution in so far as it limits supplementary expenditure that may be incurred by Government without Parliamentary approval to only three per cent of the of the total approved budget of the financial year,” Kivumbi told Parliament.
His new proposed Section 25 now altogether omits any prior supplementary expenditure and imposes an obligation on the part of government to indicate the source of funding for the budget deviation.
“A supplementary estimate laid before Parliament for approval under Article156 of the Constitution shall only be approved by Parliament where- (a) the supplementary estimates indicate the source of funding to finance the supplementary expenditure request by each vote,” reads his proposed clause 25(1) (a).
For supplementary requests that are higher than the approved revenue plan for the particular financial year, Kivumbi proposes a written authorisation from “a person or authority responsible for revenue collection.”
To cure budget suppression, which is what the Ministry of Finance, Planning and Economic Development does by picking funds from budget items approved for other votes to finance other items in different votes, the Butambala lawmaker proposes written consent from Accounting Officers who are being deprived of the funds.
“…the Minister shall receive prior and written consent from the Accounting Officer of each of the votes that are to be affected by suppression; and (ii) the suppression was approved by Parliament before the supplementary expenditure was incurred or before the supplementary estimates were laid in Parliament,” reads his proposed clause 25(2)(c).
On the Contingency Fund, Muwanga Kivumbi proposed a new Section 26 of the Public Finance Management Act, in which he proposes to have the fund cross into financial years if unutilized, against the current practice of exhausting it at the end of the financial year.
“An appropriation to the contingencies fund shall not expire at the close of the financial year for which it is made, and the funds retained in the contingencies fund shall, in addition to the funds appropriated by Parliament under subsection (l), form part of the contingencies fund for the preceding year,” proposes Hon. Muwanga Kivumbi in clause 26(2)(b).
Efforts by the Minister of State for Finance in charge of General Duties, Henry Musasizi to persuade Muwanga Kivumbi to withdraw the proposal were futile. Kivumbi maintained that the amendments have been delayed for too long and received agreement from the House on the matter.
Though Kivumbi’s move was unanimously backed by the entire House, it is worth noting that allowing government to spend a certain percentage of the approved national budget without prior approval by Parliament, to a certain extent presents some advantages such as providing government with flexibility to respond quickly to emergencies or unforeseen events. In situations where immediate action is required, bypassing the need for prior approval can speed up the process of allocating funds.
However, it has a number of shortcomings too, such as lack of accountability, potential for mismanagement, transparency concerns among others.
Therefore, striking the right balance between these considerations is essential in designing a system that promotes responsible governance while also allowing for necessary agility in resource allocation.