THE REPUBLIC OF UGANDA THE THIRD FINANCIAL MANAGEMENT AND ACCOUNTABILITY PROGRAMME (FINMAP III) ANNUAL REPORT FY 2016/17 MINISTRY OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT Key Partners www.kfw-entwicklungsbank.de www.norway.go.ug www.uganda.um.dk Civil Society Budget Advocacy Group Government of Uganda 2 THE THIRD FINANCIAL MANAGEMENT AND ACCOUNTABILITY PROGRAMME (FINMAP III) ANNUAL PROGRESS REPORT FY2016/17 Ministry of Finance, Planning, and Economic Development, Finance Building, Apollo Kaggwa Road, P.O. Box 8147, Kampala. Website: www.fi nance.go.ug © Ministry of Finance, Planning, and Economic Development, September 2017 Contents LIST OF ACRONYMS AND ABBREVIATIONS .............................................................................................................................................................................................................5 STATEMENT BY THE TASK MANAGER.........................................................................................................................................................................................................................8 EXECUTIVE SUMMARY .......................................................................................................................................................................................................................................................10 1.0. SECTION I: INTRODUCTION ............................................................................................................................................................................................12 1.0. OVERVIEW ........................................................................................................................................................................................................................................................ 13 1.1. STRATEGIC OBJECTIVES ......................................................................................................................................................................................................................... 13 1.2. BUDGET ALLOCATION ................................................................................................................................................................................................................................ 13 1.3. PROGRAMME MANAGEMENT AND IMPLEMENTATION............................................................................................................................................................14 2.0. SECTION II: PERFORMANCE FY 2016/17 .................................................................................................................................................................15 2.1. MACROECONOMIC MANAGEMENT....................................................................................................................................................................................................16 2.1.1 IMPROVED FORECASTING OF MACROECONOMIC AGGREGATES ...................................................................................................................................16 2.1.2 QUALITY OF REVENUE FORECASTS, MONITORING AND EVALUATION .........................................................................................................................18 2.1.3 WIDENED TAXBASE AND IMPROVED TAX ADMINISTRATION .............................................................................................................................................19 2.1.4 IMPROVED QUALITY AND TIMELINESS OF REPORTING ON OVERSEES DEVELOMENT ASSISTNANCE ..................................................20 2.1.5 IMPROVED QUALITY AND TIMELINESS OF DEBT ANALYSIS............................................................................................................................................... 21 2.2. BUDGET PREPARATION AND MONITORING ..................................................................................................................................................................................23 2.2.1. IMPROVE THE TIMELINESS AND ACCURACY IN BUDGET PREPARATION ..................................................................................................................23 2.2.2. IMPROVED TIMELINESS AND QUALITY OF BUDGET ANALYSIS, MONITORING AND EVALUATION ..............................................................23 2.3 FIDUCIARY MANAGEMENT SYSTEMS IN GOVERNMENT .....................................................................................................................................................26 2.3.1 IMPROVED TIMELINESS, QUALITY & COMPREHENSIVENESS OF FINANCIAL REPORTING BY CG .....................................................................................................................................................................................................................................26 2.3.2 IMPROVED CASH MANAGEMENT ........................................................................................................................................................................................................ 31 2.3.3 INSTITUTIONALLY STRENGTHEN THE PUBLIC PROCUREMENT FUNCTION .............................................................................................................. 31 2.4 PAYROLL, PENSION AND HUMAN RESOURCES MANAGEMENT ......................................................................................................................................34 2.4.1 TIMELY AND ACCURATE GOU PAYROLL, PENSIONS PROCESSING AND PAYMENTS ...........................................................................................34 2 THE THIRD FINANCIAL MANAGEMENT AND ACCOUNTABILITY PROGRAMME (FINMAP III) ANNUAL PROGRESS REPORT FY2016/17 2.5. PUBLIC PROCUREMENT ..........................................................................................................................................................................................................................37 2.5.1 IMPROVED COMPLIANCE WITH PUBLIC PROCUREMENT LEGAL AND REGULATORY FRAMEWORKS ....................................................37 2.6. INTERNAL OVERSIGHT ............................................................................................................................................................................................................................. 44 2.6.1. IMPROVED TIMELINESS AND QUALITY OF INTERNAL OR INTERNAL AUDIT REPORTS INCLUDING FOLLOW UP OF INTERNAL AUDIT AND AUDIT RECOMMNETATIONS ........................................................................................................................................................................................ 44 2.7: EXTERNAL OVERSIGHT ............................................................................................................................................................................................................................46 2.7.1 TIMELY AND QUALITY EXTERNAL AUDIT REPORING AND FOLLOWUP OF RECOMMENDATIONS .............................................................46 2.8. LEGISLATIVE OVERSIGHT .......................................................................................................................................................................................................................49 2.8.1. IMPROVED LEGISLATIVE SCRUTINY OF BUDGET AND AUDIT REPORTS ...................................................................................................................49 2.9 PUBLIC FINANCIAL MANAGEMENT IN LOCAL GOVERNMENT ........................................................................................................................................... 51 2.9.1 IMPROVED REVENUE PLANNING AND ANALYSIS IN LG ........................................................................................................................................................ 51 2.9.2 IMPROVED TIMELINESS AND QUALITY FINANCIAL PERFORMANCE REPORTING IN LGS ................................................................................53 2.9.3. IMPROVED TIMELINESS AND QUALITY INTERNAL AUDIT REPORTING .......................................................................................................................53 2.9.4. IMPROVED TIMELINESS AND QUALITY OF REPORTING BY LGPACS ............................................................................................................................54 2.10. PROGRAMME COORDINATION AND MANAGEMENT ................................................................................................................................................................55 3.0 SECTION III: CAPACITY BUILDING .............................................................................................................................................................................57 4.0 SECTION IV: RISK MANAGMENT .................................................................................................................................................................................59 5.0 SECTION V: CHALLENGES AND LESSONS LEARNED .......................................................................................................................................63 5.1. CHALLENGES FACED ................................................................................................................................................................................................................................64