Wednesday, August 22, 2012
THE PARLIAMENTARY PROCEDURE DURING THE BUDGETARY PROCESS IN UGANDA
Source: The Office of the Clerk to the Parliament THE BUDGETARY PROCESS Parliament approves the mobilization of resources and the expenditures of such resources to meet public expenditure as contained in the budget. The budget is an annual financial statement of revenue and expenditure for a given financial year. Parliament derives its mandate over the budget from the 1995 Constitution, Article 155, which among others, provides for the laying before Parliament the annual financial estimates, including supplementary expenditures. ENABLING LAWS Expenditure and tools of raised revenue are approved through the relevant enabling pieces of legislation. These include the appropriation Act. The enabling legislation for revenue collection include; The Income Tax Act, The Excise Tariff Act, The Stamps Act, The Value Added Tax Act and The Finance Act. It is important to note that the above legislations can only be introduced by the Executive, since it has the sole right to introduce money Bills. Article 9 of the Constitution bars Parliament from introducing such Bills. THE BUDGET ACT The Budget act 2001, regulates Parliament’s involvement in the budgetary process. The Act sets the key dates and timelines for delivering key budget documents and outlines Parliament’s role at the different stages of the budget process. The Act does not only give room for a systematic and efficient budget process, but also makes the budget process more open, transparent and consultative. THE BUDGET CYCLE The budget goes through an elaborate process, which includes; laying of preliminary indicative estimates, presentation of the Budget to Parliament, general debate on the Budget, consideration of Vote – on – Account, Scrutiny of policy statements, consideration of the financial Bills, Committee of Supply, and consideration of the Appropriation Bill. LAYING OF PRELIMINARY INDICATIVE ESTIMATES The Minister in charge of Finance is required to lay before Parliament the preliminary budget estimates before 1st of April each year. The estimates are scrutinized by the Sector Committees of Parliament, which present their reports to the Budget Committee of Parliament, not later than 25th April. The Budget Committee prepares a report on the preliminary estimates and the report is presented to the President by 15th May each year. The proposals contained in the report of the Budget Committee are meant to influence and inform the preparation of the Budget, which is presented to Parliament before 15th June of each year. PRESENTATION OF THE BUDGET TO PARLIAMENT Article 155 of the Constitution provides for the presentation of the Budget to Parliament, on such a day as the Speaker may, after consultation with the President, appoint. Subject to the Constitution, the Budget may be presented to the House by the Vice President, or a Minister on the authority of the President. The presentation of the Budget in this respect is what is commonly referred to as reading of the budget. COMMITTEE OF SUPPLY The Rules of Procedure provide for the Committee of the Whole House, which shall be designated as the Committee of Supply, to which shall be referred the annual estimates, any supplementary estimates and any Vote – on – Account. On the appointed date for presenting the budget, a motion is moved that Parliament do resolve itself into a Committee of Supply for consideration and approval of: The revised revenue and expenditure estimates for the proceeding fiscal year. The budgetary proposals for the estimates of revenue and expenditure for the fiscal year in question VOTE – ON – ACCOUNT During the first quarter of the financial year, and when the estimates of revenue and expenditure are still being deliberated upon, spending agencies are allowed to spend up to one third of their proposed budget, before the approval of the global budget. This is because Parliament is not able to vote the entire budget before the commencement of the new financial year, and yet it is necessary to have funds at the disposal of Ministries, Departments and Agencies of Government to meet the operational costs. Therefore, when the Government needs to draw any money from the Consolidated Fund for expenditure during this period, it seeks approval of Parliament. A special provision is made for a ‘Vote – on – Account’ by which the government obtains the vote of Parliament to incur expenditure on various items for the first quarter of the year. This sanction of Parliament for withdrawal of money from the Consolidated Fund to meet Government’s expenses is what in known as Vote – on – Account. Consideration of the Vote – on - Account is handled for a period not exceeding one day. DEBATE ON THE BUDGET On an appointed day (s) after presentation /reading of the Budget, a general debate ensues on the budget, in the following order: Response on the Budget speech by the Shadow Minister of Finance who comments and proposes policy alternatives to Government. Response on the Budget speech by the Chairperson of the Budget Committee. The Chairperson among other things, informs the House on the extent to which the proposals of the Budget Committee as contained in the report on the Budget Framework Papers were addressed in the Budget speech. Thereafter Members who may wish to contribute to the debate are allowed to do so. MINISTERIAL POLICY STATEMENTS Ministerial Policy Statements are delivered to Parliament by 30th June of every year. The statements detail the policy and expenditure priorities of the respective departments of Government. The Policy Statements are scrutinized by Sector Committees in detail. During this process, Committees interact with the Ministries and their technical staff to explain the budget proposals, the policy behind such proposals, and the jurisdiction for the amounts required. The Committees further inquire into the budget performance of the previous financial year, and the extent to which the recommendations of Parliament on the previous financial year were taken on, and the extent of inclusion of such recommendations in the year under review. At this point, Members may ask of the Minister the extent to which given ministry programs have been extended to their constituencies. The Sessional Committees present their reports to the House on the budget proposals of the respective sectors, by the 25th of August of each year. SUPPLEMENTARY APPROPRIATION BILL The Minister responsible for Finance presents to Parliament the resources spent by Government departments from the Consolidated Fund beyond what was approved for expenditure in the previous financial year. The supplementary expenditures usually arise from unforeseen expenditure items. This process allows departments to close their Books of Accounts. INTERIM COLLECTION ORDER An Interim Collection Order enables Government to continue raising revenue, before the passing of the Financial Bills. It is issued by the Minister in Charge of Finance, and it lasts for three months. APPROVAL TO RAISE REVENUE In order for Government to proceed to raise revenue to finance the Budget, Parliament is required to approve the means of raising of the said revenue. This is done through the passing of the Finance Bill, Income Tax Bill, Excise Tariff Bill, the Stamps Bill and the Value Added Tax Bill. Thse draft pieces of legislation give a legal regime for revenue collection. In most cases, these are brought as amendment bills. By enacting these bills into law, Parliament approves the collection of money, for purposes of financing the budget. COMMITTEEE OF SUPPLY During the Committee of Supply, the provisions of the various votes are considered, and voted on. Amendments on votes can be proposed at this stage. This can, however, only be by way of a reduction. The Rules of Procedure provide for a reduction of not more than ten thousand shillings. APPROPRIATION BILL After allocation of monies to each vote during the Committee of Supply, the funds so supplied to the respective votes are consolidated into the Appropriation Fund. The purpose of the Bill is to give a legal force that enables spending agencies to draw monies from the Consolidated Fund. PARLIAMENT’S OVERSIGHT ROLE The Parliament exercises oversight over the budget performance by monitoring its implementation. This is undertaken by the Sector Committees, which monitor the implementation of the agreed on programmes and activities, as contained in the respective Policy Statements of Government departments. This is done through field visits, public hearings, questions to ministers, among others. THE AUDIT The Auditor General is required by the provisions of Article 163©, to audit and report on the Public Accounts of the Government of Uganda. He/she audits the expenditure of all funds appropriated, and report to Parliament. The report of the Auditor General addresses issues of compliance by the spending agencies to the agreed on budget programmes and activities, and compliances with the laws and regulations governing public expenditure. The Auditor General is required to submit to Parliament Audited Accounts of the preceding financial year, by 31st March. When the report of the audited accounts is laid before Parliament, it stands referred to either of the following Committees: Public Accounts Committee (PAC) which considers Central Government Accounts. Local Government Accounts Committee (LGAC) which considers Local Government Accounts, and The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), which considers accounts of Commissions and Statutory Authorities. These Committees scrutinize the audited accounts and report back to the House on the findings and recommendations, within six months from the dateof tabling the audited accounts.