IN SUMMARY: Ministry of Finance, in a rigorous documented procedure, authorized the reallocation (virement) of Shs1,3bn from the Cooperatives vote to finance various critical expenditure shortfall in the Ministry of Trade.
On September 9, 2023, the Minister of Finance, Matia Kasaija in a letter copied to the Auditor General and Accountant General, authorized the Permanent Secretary Ministry of Trade, Ms. Geraldine Ssali to reallocate Shs1,381,906,074.
“We have reviewed your submission and observed the need for your smooth operation during the FY 2022/23. In this regard, Shs1,381,906,074 should be considered for reallocation,” said Kasiaja.
The ministry was allocated a non-wage budget of Shs2.5bn in FY 2021/22, of which only 75% was received for activities. This budget was further cut to Shs2.2bn in FY 2022/23. And still only 75% was received by the Ministry. We requested a 10% virement during FY 2021/22 as prescribed under the Financial Management Act from the Shs33.9bn to run the PDM activities of the ministry among other activities and they were granted Shs1,381,906,074bn.
The above explicitly explains and confirms a legal veriment process, which doesn’t amount to diversion as erroneously reported by the New Vision on Monday.
Ministry of Trade, Industries and Cooperatives has continued to pay cooperatives, and unions and multipurpose entities amidst budget shortfalls and partial releases.
The Ministry has a total of 43,993 cooperatives and SACCOs on their database as of June 30, 2023. Of those, 13,778 (31%) are cooperatives, area cooperatives, unions and the rest multipurpose.
Since the government program of compensation of war loss began in 2011, 57 Cooperatives, unions and multipurpose entities have claimed war loss worth UGX 958,876,661,682. Of that, UGX 256,826,393,259 has been verified for 26 entities. There’s ongoing verification for the rest worth Shs333,810,688,400.
A total amount of Shs36bn was paid out in the financial year 2021/22 and Shs27.16bn was paid in 2022/23. This comes to a total of Shs63.51bn in those two year of which Shs10bn paid in QTR 4 of FY 2022/23 is not yet settled to entities.
Unfortunately, due to budgetary constraints, the full claims have not been settled as sometimes only 75% of the budget is released. Case in point is when the Ministry of Trade got Shs2.7bn in Qtr 1 of FY 2022/23. Clearly, this could not be effectively distributed among 57 beneficiaries, not even 5 of them. The funds were held on account until more funds were availed for distribution in the subsequent quarter.
Payment of Cooperatives compensation funds have been paid directly to the Cooperatives’ Bank Accounts and for some through their appointed Legal representatives. This practice has been in existence since the beginning of the program.
