Finance

Finance

The Department of Finance is charged with the overall financial planning and management of the district council. The main functions are:
– Prepare annual revenue and expenditure estimates
– Control expenditures on votes
– Ensure prompt collection of revenue and remission to accounts under the proper sectoral programmes and items
– Conduct frequent checks on revenue collection and expenditure
– Maintain approved accounting system and prepare annual accounts for audit purposes and financial statements and returns as required by the Local Government Act and Financial and Accounting Regulations and any other special reports.

The finance department handles the following categories of finances:
– Local revenue- This comprises Property taxes, User charges, Departmental revenue and miscellaneous sources.
– Central Government transfers – Conditional grants, Unconditional Grants and Equalization Grants
– Donor and NGO funds – generally grants and donations from donors and NGOs., CBOs

Revenue issues
The district still has a poor revenue base as it has not yet recovered from the destruction from the social economic infrastructure which caused by persistent insecurity in the district for over twenty years. However with the restoration of security in the district production is improving and revenue performance shall gradually improved. Besides the above scenario there remain a number of constraints to revenue mobilization and collection indicated below which need to be addressed. However, this effort is being hampered by natural calamities such as draught and hailstorms.
1. General constraints to revenue mobilisation
a) Reduction of taxpayers and the taxable income
• Negative political statements/pronouncement at both Central and Local Government levels.
• Inadequate capacity to carry out the registration process effectively
• Creation of new districts i.e. Otuke and Alebtong Districts

b) Enumeration
• Lack of awareness among tax payers
• Under declaration of taxable income by tax payers
• Inadequate information on taxable income
• Mobility of taxpayers mainly due to security, social and economic reasons
• Lack of basic facilitation e.g. transports allowances and incentives.

c) Assessment
• Poor turn up for assessment
• Poor methods of imputing the value of taxable property
• Inadequate audit operations which do not cover all sub-counties on a regular basis due to lack of funds.

d) Collection and enforcement
• Negative attitude and resentment against tax payment
• Taxpayers tend to pay only under threat at the last moment
• Failure to link tax payment to the benefits the tax payers receives
• Intimidation of taxpayers by some politicians

1. Special Constraints
a) Market fees/charges
• Lack of land titles for revenue sites e.g. markets, bus//taxi stages etc
• Underdevelopment of markets as almost all of them are not fenced, have no commodity stalls and lack sanitary facilities
• Interference in the tendering process and revenue collection by some politicians
• Reserve rates are not properly calculated, monitored and revised regularly
• Untimely procurement of revenue collection stationery

b) Trading licences/permits
• Obsolete laws on trade
• Ignorance of trade laws
• Weak enforcement of business laws.

d) Property rates
• Lack of valuers to carry out valuation of property
• Lack of funds for valuation
• Public resentment to pay the tax

e) Department revenue
This is mainly revenue collected in respect of development on land by the Land and Surveys office and the Forestry sector. The main constraints are:-
• Lack of capacity to develop forest resources and collect revenue from them.
• Introduction of freehold land tenure in all rural areas except gazetted trading/urban centres.
The district budget trend on local revenue has been that most of the time the revenue has been used for recurrent expenditure. Every effort is being made to address capital expenditure areas especially roads, production, schools, small scale micro enterprises

POCC Analysis
Below is a presentation of the POCC analysis result for the finance department, and planning unit. It is important to have this analysis in order to focus the issues realised in the departmental strategies, objectives and activities.
Potentials
– Key posts in the department are filled
– Final accounts have been produced to date
– Steady increase in central government transfers
– Most staff are pursuing professional courses (CPA, ATC) under the Ministry of Finance.
– Many programmes are piloted in Lira which bring finances to the district (MTBF) “Administrative Network Project”, IFMS (Integrated Financial Management System) , etc

Constraints
– Inadequate office space at the District head office for Finance and Planning
– Narrow revenue base
– Accounts are still being prepared manually at the sub-counties
– Pilot projects which are terminated without proper evaluation of lessons learnt
– Lack of transport facilities at both the District head office and sub-counties
– Low budget ceilings for planned activities due to inadequate funds.

Opportunities
– IFMS is being piloted in the district for strengthening financial management
– Electronic Fund Transfer (ETF) has been rolled out to the district
– Flexibility in co-funding using even equalisation grant
– FDS gives more autonomy and flexible planning and managing of local government priorities
– Strengthening links with NGOs shall provide a wider range of opportunities
– Ministry of Finance is sponsoring professional courses like CPA/ATC

Challenges
– Creation of new districts namely Otuke and Alebtong has reduced the districts revenue base.
– Demand by donors for co-funding may over stretch the local revenue
– Inadequate funding of capacity building may leave the local governments over stretched in handling development initiatives
– Inadequacy of the 20% provision of local revenue for council threatens implementation of other activities
– Short falls of releases of central government transfer
– Shortfalls in local revenue collection
– Many court cases are against the district.
– Government intention to stop funding graduated tax compensation

By ongompaul