Kampala- Government ministries, departments and agencies have been directed to implement the electronic transfer of funds into bank accounts of service providers.
The directive which takes immediate effect follows last week’s release of the third quarter cash limits for wage, non-wage recurrent and development expenditure for January to March by the ministry of Finance to the government offices.
While addressing the press last Friday, Mr Keith Muhakanizi, the Secretary to the Treasury said the directive is meant to speed up absorption of government funds and that there is no money lying idle in accounts and no multiple government accounts.
“All accounting officers are instructed to start direct payment of service providers through the banking system to allow audits take place using the integrated financial management system which we are rolling out to local governments, ” he said adding that the number of vehicles lining up at Bank of Uganda every Friday reveals a lot about the implication of using cash transactions.
He said with the help of development partners, government has improved on the transparency in the management of its resources using the single treasury account and the integrated financial management system.
“I am happy that the development partners are here present and they have done quite a lot for us to achieve this. You remember what happened at the office of the Prime Minister,” he said.
Last year, development partners temporarily withdrew financial support to government after massive fraud was reported at the office of the Prime Minister where billions of shillings were swindled as well as the ministry of Public Service where pension money amounting to billions of shillings due to multiple idle accounts through which money was being stolen.
According to Mr Muhakanizi, the phasing out of cash transactions will ease the auditing of government spending.