Local Governments (Financial and Accounting) Regulations, 2007

These Regulations may be cited as the Local Governments (Financial and Accounting) Regulations, 2007.

These Regulations come into force on the 1st day of July, 2007.

The Regulations apply to financial transactions and business of all local government councils and administrative units and to management of public moneys and public property in local governments.

This section provides interpretations and definitions for terms used in the Regulations.

Accounting officers (assistant chief administrative officer, town clerk or parish chief) must perform specified financial administration duties for their administrative unit.

The head of finance must manage and oversee the council’s financial transactions, accounts, revenues, expenditures, accounting systems and related staff responsibilities and reporting.

The head of internal audit must carry out a range of duties including maintaining an effective audit unit, following the internal audit manual, preparing and submitting audit work plans, supervising audits and reports, preparing and submitting quarterly reports (within one month after each quarter) to the council, auditing systems, revenue, procurement, manpower, and assets, extending services to local units and working with the Auditor General’s representatives.

The head of department must carry out specific financial management duties including acting as vote controller, approving commitments, ensuring commitments stay within limits, making regulations available to staff, submitting monthly reports within seven days after month end, preparing various annual plans per Ministerial instructions, and producing quarterly cash flow statements for approval by the head of finance.

Public officers responsible for money, stores or assets must comply with financial regulations and instructions, supervise revenue collection and officers under them, produce records for inspection, reply to queries, and prepare and submit financial returns.

Public officers are personally and pecuniarily responsible for performing financial duties and for proper collection and custody of administration monies, stores and assets; failures may lead to being required to make good deficiencies and to surcharges and withholding of monies.

The local government public accounts committee must examine specified audit and inquiry reports and must produce reports to submit to the council and the Minister.

The accounting officer must have general control of, and manage, the financial transactions of local governments, subject to the Act and these Regulations.

The council must perform specified financial management functions, including authorising expenditure, controlling revenue, approving budgets and estimates, approving policies, and considering Public Accounts Committee reports.

The executive committee of a council has specified financial-management functions, including supervision and control of finances, proposing and monitoring projects, reviewing accounts and audit reports, exercising surcharge and write-off powers under specified regulations, approving reallocations and budgets, and reporting to the council.

Standing committees of a council must review finance-related bills, reports, budgets and plans, monitor sector performance, perform delegated financial responsibilities, and handle finance matters referred by the council.

Lists duties of the chief executive, including acting as accounting officer and ensuring proper financial management, reporting, record production, appointments, budgeting, audits and staff compliance with the Regulations.

A local government council must formulate, approve and execute budgets and plans in accordance with section 77 of the Act.

Requires the chief executive and chairpersons to produce, prepare, sign and submit annual budget estimates and plans for the council, with a June 15 preparation deadline for local government estimates.

Each local government council must have a budget desk; the budget desk must perform duties including coordinating departments to produce annual plans and budgets, following up the budget cycle and reporting progress, ensuring realistic budget estimates and linking planning to budgeting.

The council must include full information about the policy it intends to pursue during the year in the annual estimates of revenue and expenditure, presented as background to the budget and with as much detail as consistent with clarity and conciseness.

Estimates of recurrent and capital development expenditure must be produced in a format provided in the accounting manual or the instructions issued by the Minister.

Before any project starts, feasibility studies, work plans, cost–benefit analysis, environmental impact assessment and effects on taxation must be indicated, and explanatory notes must be provided showing the purpose, need and source of finance to meet the full cost of the scheme.

If the local government council has not approved estimates before the start of the financial year, the council may pass a vote on account by resolution to authorise expenditure on established services up to twenty five percent of total revenues from the preceding year.

No expenditure may be incurred without approved provision or an approved supplementary estimate; supplementary estimates must be approved by the council before commitments are entered into.

Describes three categories of estimate revision (virement, re-allocation, supplementary estimates) and approval rules: chief executive may approve a virement (reported to executive committee); re-allocation requires prior approval of the executive committee and declared savings by the chief executive for personal emoluments; supplementary estimates require prior council approval and are subject to strict conditions.

Vote controllers must apply to the chief executive for virement showing amounts and affected votes; virement must not be used for certain transfers or creating posts; chief executive issues virement warrants if no objection; district hospital superintendents may issue warrants when authorised.

Vote controllers must apply to the chief executive to re-allocate budget amounts; the chief executive must consult Head of Finance and submit to the Executive Committee, and if approved must issue a re-allocation warrant to the vote controller with copies to specified officers.

Sets procedures for requesting and approving supplementary budget provisions: vote controllers must apply to the chief executive; the chief executive submits to the executive committee after consulting the head of finance; the vote controller and Standing Committee must attend the executive committee; the executive committee must recommend and submit to council; on council approval the chief executive must issue a supplementary provision warrant to vote controllers.

When a virement, re-allocation or supplementary estimates warrant has been issued, the vote book must be amended to reflect corresponding increases and decreases; re-allocation of donor funds requires the donor's agreement.

The accounting officer must submit vote controllers' schedules and explanations to the Auditor General at final adjustment of accounts, and vote controllers must show cause to the executive committee within 30 days of notification if there is unauthorized excess expenditure.

When the council approves the complete estimates, the local government council may collect revenue, incur expenditure and implement the estimates; the chairperson must sign the approved estimates and summaries shall be published by the fifteenth day of the second month after approval; the Minister may issue instructions on sharing collected revenue and central government receipts.

The head of finance must ensure revenue collectors properly perform their duties so that all council revenue is promptly collected in the approved manner and banked intact.

Requires that revenue registers be used to show details of revenue due, revenue collected and arrears; arrears carried forward at the end of each accounting period must be brought forward at the start of the next accounting period; the accounting manual sets the format of accounting documents.

Defines who is a revenue collector; officers may not act as revenue collectors unless in an established post, except in emergencies with written Head of Finance authority; accounting officers at subcounty/division level must liaise with district/municipal head of finance when appointing revenue collectors.

When unused receipts, tickets, licences or other forms are lost they must be reported and investigated; if an issued receipt is lost and the payer requests a duplicate, a certified true copy may be furnished but a new receipt form must not be used.

A local government council must accept only the nationally accepted legal tender issued by the Central Bank.

Unconditional grants form part of local government revenue and must be integrated into the local government budget and spent on priorities determined by the council; conditional grants are part of local government revenue but must be planned for, recorded and accounted for according to grant conditions and budgeted following an agreement between Government and local governments with accountability and reporting agreed with the responsible line ministry or donor; equalisation grants are handled according to procedures agreed with central Government.

Local governments must ensure donor funds are spent only on agreed objectives, report on usage regularly, and the Auditor General appoints external auditors whose reports must be provided to the local government public accounts committee.

Chief executives of lower and higher local governments must ensure that shared revenue collections are remitted between levels of local government.

The head of finance must advise on risk management and internal control; arrangements must ensure compliance and safeguard public funds; heads of departments must establish sound arrangements following Head of Finance guidance to improve economy, efficiency and effectiveness and meet financial targets.

Every district, city, municipal or town council must have an internal audit unit.

The head of internal audit must submit reports directly to the council; the staff (his or her staff) must report on administrative systems and operations and compliance with the Regulations.

The head of internal audit must carry out regular reviews to determine whether the administration receives value for money across its activities.

The head of internal audit must be prepared to carry out special investigations when called upon, and where the Auditor General is unable to do so, as set out in the internal audit manual.

The Auditor General will scrutinise the council’s accounts and has rights of access to all documents and information necessary to form an audit opinion.

All council transactions must be processed through the council's accounting information systems as specified by the Minister, and those systems shall progressively include computerized accounting and control systems; their use is subject to the Minister's approval.

The chief executive must appoint an officer to establish and apply ICT policies to secure council computers and data; heads of department must implement those policies; employees must not cause loss, destruction or disclosure of council-held data; officers and members should comply with e-mail, internet and software piracy guidelines in the auditing and accounting manual.

The Minister must issue guidelines on insurance policy and principals for local governments.

When a departmental loss is discovered, the head of department must immediately make a preliminary report to the head of internal audit and the head of finance and must send a copy to the accounting officer.

If a preliminary internal audit assessment finds a minor loss (as defined in the accounting manual) that does not involve fraud or negligence, the procedures in the accounting manual shall be followed.

The head of department must prepare loss report forms for every loss (except minor losses) and send them to the head of internal audit.

The chief executive must report all losses to the executive committee following the procedures and formats in the accounting manual.

On receipt of the chief executive’s final report on a loss, the executive committee must consider the report, issue directions about recovery or write-off, may recommend a surcharge, must report its decisions and send copies to specified officials, and the chief executive must retain a copy for inspection and audit.

The executive committee may authorize the writing off of losses in accordance with the accounting manual.

The executive committee may recommend a surcharge on persons (including councillors, officers or employees) after considering the chief executive’s report; the Local Government Public Accounts Committee must determine whether to surcharge; the Minister must confirm or set aside a surcharge; surcharge sums become debts payable to the council within one month unless the executive committee approves a longer period.

The head of finance must take all steps to collect sums due from persons held responsible for losses without waiting for final ascertainment of the value of losses.

The head of finance must ensure adequate security for cash while it is being transported.

Employees must not admit liability or take actions or correspondence admitting liability on behalf of the council without approval of the chief executive.

Council officers authorised to use their private vehicles for council business must insure them and must produce evidence of adequate cover on request to their head of department or the head of finance.

An Accounting Officer is the officer with overall authority and responsibility for payments under his or her control; payments of public monies must be made in accordance with the Act and these Regulations.

Payments must not be made before they are due to exploit anticipated savings; expenditure chargeable to a given year should, as far as possible, be met within that year and not deferred to avoid exceeding the estimates.

All disbursements of public moneys must be properly vouched on payment vouchers prescribed in the accounting manual or issued by the Minister.

The chief executive must authorise recoverable salary advances and administrative advances to council employees; administrative advances must be accounted for within a month; the chief executive must not authorise advances to an employee who has not accounted for previous advances; the chief executive may authorise advances to persons or organisations against a valid bank guarantee or under the Local Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006.

The chief executive must appoint vote controllers annually after budget approval and must appoint bank agents for each official local government bank account.

The chief executive must issue departmental warrants to vote controllers each financial year after budget estimates are approved; the vote controller must record and reconcile the warrant details in the vote book with the head of finance’s general ledger.

Each vote controller and each agent in receipt of a departmental warrant must maintain a vote book (in the prescribed form) to record commitments and expenditure on all votes under their control.

Specified officials must register and maintain specimen signatures; certain councillors may not be signatories; head of finance must circulate specimens and staff must verify signatures before payment.

Petty cash payments may be made by imprest holders in accordance with these Regulations.

Officers must not make cash payments unless they hold an established post; in emergencies they may only pay if they obtain written authority from the head of finance.

If an officer needs cash for administration purposes and normal pre-authorization cannot apply, the officer shall be issued an imprest.

Imprest holders must be responsible for the full amount of their imprest until properly retired; they must maintain a safe for cash imprests; officers with amounts above the authorized petty cash may deposit surplus cash in an official bank account with permission of the head of finance.

Officers who have not accounted for previous imprest shall be surcharged and shall not receive additional imprest until the previous imprest is accounted for.

Heads of department must maintain an up-to-date establishment register with full personal details and pay rates for established staff; at the end of each month they must report numbers, grades and details of staff who resigned, died or absconded; personnel departments must design a reporting form.

Employees must be paid monthly (salaries and pensions due on the last day of each month) and local governments must keep salary payments up-to-date and a separate bank account; the council chairperson and Chief Executive are held responsible for contraventions.

Payments of employees' costs should be made by direct bank transfer where possible; the head of finance may authorise payment by cheque, and only in exceptional circumstances certified by the chief executive shall cash payments be made.

The Minister must issue instructions on payments of local governments' emoluments and allowances.

The Minister must, in consultation with the Accountant General, issue the accounting policy and chart of accounts for use by the councils.

Local governments must follow the accounting manual or Minister‑issued accounting requirements; the Minister issues those requirements and must approve new systems or changes in consultation with the Accountant General and the Auditor General.

Each local government council must maintain specified accounting records: a cash book; a journal; a general ledger and subsidiary ledgers; abstracts; an asset register; and a vote book.

Each administrative unit must keep a cash book, revenue register, general ledger and vote book; parishes/wards and village councils must maintain registers of taxpayers and business units and make returns to the sub-county or division council.

Medical superintendents of district hospitals must account to the chief executive, prepare and submit monthly financial statements, and prepare year-end income and expenditure statements to present to the council; the accounting officer must keep the line Ministry responsible for health services informed.

The officer in charge of a health unit must be responsible for assets and funds, keep a bank account and cash book (reconciled monthly), and submit monthly financial statements to the sub-county.

Head teachers must account to the relevant council at the end of each academic term; the district head of internal audit must audit school accounts and submit the audit report to the Local Government Public Accounts Committee.

Head teacher must open and bank money in a school account, maintain and reconcile a cash book monthly, submit termly financial statements; signatories must be registered and at least two must operate the account (one non-teacher); the sub-accountant must inspect records and report.

The chief executive is responsible for general control of finances of administrative units, and the sub-accountant must manage routine financial transactions.

Principal accounting records must be kept in strong rooms or fireproof locked cabinets when not in use; accounting records must not be removed from their usual storage except for auditing, production in court, or if impounded under legal warrant for fraud investigation (and an official receipt obtained); auditors and inspectors must be given proper facilities to carry out audits without having to remove principal records from administration premises.

Permits destruction of vouchers and used receipts six years after the related transactions if audited; allows earlier destruction only with the written agreement of the Auditor General and forbids destruction in less than four years; requires retention of principal accounting books for fifteen years and personnel records for at least thirty years.

Local government councils and administrative units must keep proper accounting records, balance their annual accounts, and produce final account statements within three months after each financial year.

Lists tasks to be included in the annual closure of accounts, such as boards of surveys for stores and cash; journalising late accounting entries; balancing ledgers and control accounts; retiring imprest; receiving and reconciling project account details; and balancing council accounts.

The chief executive must submit accounts prepared under these Regulations to the Auditor General for audit.

Chief executive and head of finance must operate council bank accounts; specific appointment and reporting duties for head of finance and accounting officer; councillors and certain office-holders must not be signatories.

Sets procedures for opening council bank accounts: officers must apply in writing to the chief executive (nominating bank, purpose and account operator); the chief executive must notify the bank branch and applicant once authorised; officers must arrange specimen signatures; authorized signatories must register signatures with heads of finance and internal audit and notify cancellations; village executives must authorise openings and signatories are the village chairperson and parish chief.

Vote controllers who are signatories must reconcile the cash book with bank statements monthly and prepare a monthly reconciliation statement; the head of finance must certify the reconciliation within fifteen days after month end.

Any investment made by the council must be authorized by the council.

The head of finance may invest cash surpluses in a fixed deposit bank account for up to twelve months with the approval of the chief executive when amounts are in excess of normal requirements.

Local governments may raise funds by borrowing in accordance with the Act; they must make progress reports on loan use, borrow only after executive committee assurance to the council about repayments and unaffected salaries/obligations, and must maintain a loan register.

The chief executive must ensure required borrowing permissions are obtained before any overdraft or temporary advance; the officer responsible must refund charges and losses if an account is overdrawn without proper authority.

Only cheques drawn on banks in Uganda may be accepted as revenue.

Cheques generally must not be cashed for any person, except that named officers of the council may have cheques cashed for imprest and salary payments if they have written authority from the head of finance.

The head of finance must maintain a list of dishonoured cheque defaulters.

The executive committee is the authority to recommend waivers to council; the chief executive must make quarterly recommendations on waivers; an officer responsible for delay may be held personally liable if revenue becomes irrecoverable due to delayed enforcement.

Quarterly: department heads must prepare arrears-of-revenue returns and submit them to the head of finance within three weeks; the head of finance must consolidate and submit returns to the executive committee and report quarterly on waivers; the executive committee may call for explanations and direct loss reports under regulation 115.

The chief executive must appoint boards of survey on the last day of the financial year to verify cash balances, security arrangements and inspect goods held by the administration.

The head of finance must supervise council department stores and maintain accounting records; a head of department must be responsible for allocated and unallocated stores in their department, including appointing competent stores officers.

Heads of department must consult the head of finance at least once a year about ordering, storage and accounting arrangements for stores and other assets; they must ensure accounting and control procedures are followed at all times and that listed assets are managed per the accounting manual.

District and urban councils must employ a suitably qualified stores control officer; that officer must ensure stores accounts and procedures operate efficiently and must liaise with the head of finance to balance ledgers with stores control accounts.

Allocated stores must be kept to a minimum and restricted to necessary consumable items; the head of finance may require heads of departments to reduce or close allocated stores or apply unallocated stores procedures to them.

Heads of departments must record all vehicles and heavy plant owned, operated or maintained by their departments in a register in the accounting manual form.

Heads of departments must ensure inventories are kept of light plant, working equipment and loose tools issued for official duties.

Heads of departments must keep prescribed inventories of machinery, furniture, fittings, equipment and livestock for public offices and enclosures; the head of internal audit must ensure school and hospital properties are registered and managers informed.

Heads of departments must keep registers of all land and buildings owned, rented or occupied by their departments; where title deeds exist the head of finance must keep them in a safe; the Auditor-General shall inspect annually; a schedule of these assets shall appear as part of annual accounts.

When an officer hands over stores or other assets to another officer, both officers must sign a handing over certificate.

All stores shall be centrally controlled, except those in schools and hospitals which the institutions referred to shall manage and a schedule sent to the chief executive and the head of internal audit on a quarterly basis.

Disposal of stores and other assets must follow the Local Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006.

Any diminution in value of land, buildings, stores and other assets through damage or accident or abnormal wear and tear shall be regarded as a loss and the losses procedures under regulation 112 shall be followed.

A head of department must obtain approval from the contracts committee before cannibalizing unserviceable council-owned stores or other assets for spares.

Officers in possession of public monies, stores, assets, land or buildings must keep them safe and are responsible for any loss; officers who supervise others must accept responsibility for losses unless they can show the loss was not caused by their failure or neglect.

All council officers who hold public money, documents or books of account must keep them safe and take steps to protect, handle, secure and bank them as set out in the accounting manual.

Requires the head of finance to keep a register of safes and cash boxes; requires officers holding original keys to be responsible for custody and to be present when opening/locking in double-lock situations; requires officers handing over keys to inform successors about other key-holders and duplicate key locations.

Officers are prohibited from keeping private money or effects in council strong-rooms, safes or cash boxes.

The head of finance and heads of revenue collecting departments must ensure prompt reminders are sent when revenue is overdue.

The head of finance must control procurement, storage and issue of official triplicate receipt books, tickets and licence forms, prevent use of unofficial forms, acknowledge returned obsolete books and arrange their disposal in consultation with the Auditor General.

This section lists multiple offences: various officers (including an accounting officer, head of finance, public officer, political leader or council employee, heads of department, head of internal audit, senior officer, revenue collector, and cashier) commit an offence if they fail without reasonable excuse to perform specified financial, reporting, custody, or administrative duties.

A person who commits an offence under regulation 123 is liable on conviction to a fine up to 250 currency points or imprisonment up to three months (or both); the council or the Minister may also recommend disciplinary action, and recovery from a public officer can be limited where the officer was not solely responsible.

The Minister may give instructions on how public funds are to be used at village level or to community groups that receive public funds.

Heads of department must promptly report an employee's death, dismissal, suspension or interdiction to the head of finance so necessary action can be taken; heads who fail to comply are to be held responsible for losses incurred.

Only the Minister may authorise guides, manuals and other instructional publications to assist financial management in local governments.

The Auditor General, local government inspectors and any other state organs authorized by law must check compliance with these Regulations and make reports.

Handing and taking over of public offices

Regulation 130 is omitted in the original.