Local Governments Act
Local Governments (Financial and Accounting) Regulations, 2007
Statutory Instrument 25 of 2007
- Published in Uganda Gazette 31 on 22 June 2007
- Assented to on 14 May 2007
- Commenced on 1 July 2007
- [This is the version of this document from 22 June 2007.]
Part I – Preliminary
1. TitleThese Regulations may be cited as the Local Governments (Financial and Accounting) Regulations, 2007.
2. CommencementThese Regulations shall come into force on the 1st day of July, 2007.
4. InterpretationIn these Regulations, unless the context otherwise requires—"accountant" means an officer appointed and posted to a district, city, municipal or division council to be incharge of accounting and financial management of that council;"Accountant General" means the person designated as such under section 7 of the Public Finance and Accountability Act, 2003;"Act" means the Local Governments Act;"administration" means the entire administrative setup of a district, city, municipality, division, town, subcounty or any other lower council;"allocated stores" means stores the cost of which is directly charged on the relevant programme, sub-programme and item of expenditure;"bank" means a financial organization or institution registered with the Bank of Uganda to provide banking services under Part VII of these Regulations;"cash in transit" means all forms of monies as defined in these regulations being remitted or transferred from one office or place to another;"chief executive" means chief administrative officer or town clerk and includes assistant administrative officer, assistant town clerk or sub-county chief appointed accounting officer by the chief administrative officer of a district or the town clerk of a city or municipal council;"chief finance officer" means an officer in charge of accounting and financial management of a district, city or municipal council;"council" means a council as defined by the Act;"council bank account" means council bank accounts operated by the chief executive and head of finance for main stream accounts and agency and project accounts operated by the chief executive, head of finance and a vote controller appointed under these Regulations;"currency point" has the meaning assigned to it in the Sixth Schedule to the Act;"executive committee" means a council committee established in accordance with the Act;"head of finance" means the chief finance officer, accountant or sub-accountant responsible for accounting and financial management of a local government;"heavy plant" means items of a specialised nature which may include compressors, motorised engines and generators, heavy pumps, drillers, excavators, dumpers, cranes, rollers, trailers, dozers, road sweepers, graders, tar sprayers, fire service tenders, fork-lift trucks, or other similar items;"internal audit" means an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organisation;"internal control" means the systems of control devised by management to ensure that the council’s objectives and management policies are achieved and adhered to in a manner that promotes the economy, efficiency and effectiveness on the use of resources, that financial and other records are reliable and complete and that the councils assets and interests are safeguarded;"land and building" means land, buildings and enclosures which are owned, rented or occupied by the local council;"local council" includes local government councils and administrative unit councils;"local government" means the local councils established under section 3(2) to (5) of the Act;"loss" means any loss, theft, deficiency, fraudulent payment, suppression of revenue, irrecoverable revenue, misappropriation, misuse or unauthorized damage or destruction;"member of council" means an elected councilor;"Minister" means the minister responsible for local governments;"monies" includes cash, cheques, postal and money orders, stamps and other negotiable instruments of monetary value;"public officer" means any person holding or acting in a public office;"revenue collector" means any officer, cashier, chief or any accounts staff appointed to receive or collect revenue;"risk management" means the establishment of policies, procedures and practices to identify, analyse, quantify, monitor, and control financial and other exposures of the council so as to minimize potential losses;"standing committee" is a committee of council as established under the Act;"stores and other assets" includes allocated stores, unallocated stores, vehicles, plant, equipment, tools, machinery, furniture, movable fittings and livestock;"sub-accountant" means an officer posted to a sub-county council and a municipal division to take charge of financial accounting and financial management of that council;"unallocated stores" means stores the cost of which is charged to a stores control account pending later charge to the relevant programme, sub-programme and item of expenditure;"year" means a financial year.
Part II – Financial administration and control
5. General control of financial transactions of local governmentsThe financial transactions of local governments shall be under the general control of the accounting officer and shall be managed by the accounting officer subject to the Act and these Regulations.
6. Functions of the council
7. Functions of the executive committeeThe functions of the executive committee of a council in relation to financial management shall be—
8. Functions of standing committeesThe functions of standing committees of a council in relation to financial management in the specific sectors for which they are responsible include—
9. Duties of the chief executive
10. Duties of accounting officers at administrative units
11. Duties of the head of finance
12. Duties of the head of internal auditThe duties of the head of internal audit shall include among others—(a)to maintain an efficient and effective internal audit unit able to carry out the functions of the unit;(b)to implement all relevant aspects of the internal audit manual and ensure that the prescribed standards and work programmes are adhered to where applicable;(c)to prepare annual and quarterly work plans for the internal audit unit to ensure optimal deployment of resources to priority audit areas, and to submit the plans to the chief executive for approval;(d)to supervise the conduct of audits, and review the draft audit reports and working papers of the unit staff to ensure that—(i)all audits have been carried out to an acceptable standard following prescribed programs;(ii)all matters arising have been properly dealt with and reported in the correct manner;(e)to prepare internal audit quarterly reports for submission to the council within one month at the end of each quarter;(f)to review the financial and accounting systems of operation in each department and establishment of the administration to ensure that they are adequate, effective and conform to the provisions of these Regulations and the internal audit manual;(g)to audit revenue collection to ensure that all monies due to the administration are collected and banked, or otherwise accounted for in terms of these Regulations and the internal audit manual;(h)to audit procurement procedures and payments to ensure that all goods, services and works are properly ordered, received, examined and paid for in terms of these Regulations and the internal audit manual and that value for money as an objective of procurement has been achieved;(i)to conduct manpower audits embracing all employees of the administration including staff records, remuneration levels, allowances, and payments to ensure conformity with the budget, approved establishment, these Regulations and the internal audit manual;(j)to audit all stores, cash, assets and other property owned or in the care of the administration to ensure their safe custody, efficient and economic usage and disposal.[Please note: numbering as in original]
13. Duties of a head of departmentThe duties of a head of department in respect of financial management include, but are not limited to the following—
14. Duties of other public officersEach public officer of the administration concerned with the receipt, custody, disbursement or documentation of money, or with stores or other assets shall—
15. Pecuniary responsibility of public officers
16. Functions of the local government public accounts committee
Part III – Budgeting
17. BudgetingA local government council shall formulate, approve and execute budgets and plans in accordance with section 77 of the Act.
18. Annual plans and budgets
19. Budget desk and duties of the budget desk
20. Annual revenue and expenditure estimates
21. Recurrent and development estimatesThe estimates of recurrent and capital development expenditure shall be produced in a format provided for in the accounting manual or the instructions issued by the Minister.
22. Feasibility studies and cost benefit analysisFeasibility studies, work plans, cost benefit analysis, environment impact assessment and effects on taxation shall be indicated clearly before any project takes off and explanatory notes shall be provided to show the purpose and need for each project, and what the source of finance is to meet the full cost of the scheme.
23. Vote on account
24. Insufficient provisions
25. Revision of estimates
26. Virement of warrants
27. Re-allocation warrant
28. Supplementary provisions
29. Amendment to the vote book
30. Unauthorised excesses
Part IV – Revenue
31. Authority for revenue collection and expenditure
32. Revenue collection responsibilities of the head of financeThe head of finance is responsible for ensuring that revenue collectors, defined under these regulations, carry out their duties properly to ensure that all revenue due to the council is promptly collected in the approved manner and banked intact.
33. Revenue registers
34. Revenue collector
35. Loss of receipt forms
36. Legal tenderA local government council shall accept only the nationally accepted legal tender, issued by the Central Bank.
37. Grants from Government
38. Donor’s funds
39. Remittance of shared revenue collections by local governments
Part V – Payment
40. Authority and responsibility for payments
41. Record of the transaction in the accounts
42. Payment vouchersAll disbursements of public moneys shall be properly vouched on payment vouchers prescribed in the accounting manual or issued by the Minister.
43. Payment of advances
44. Appointment of vote controllers and bank agents
45. Departmental warrants
46. Vote book
47. Registration of specimen signatures
48. Modes of payment
49. Restrictions on cash payments
50. General and special imprest
51. Custody of imprest
52. Replenishment and retirement of imprest
53. Salaries and wages establishment registers
54. Payment of salaries, pensions, terminal benefits and compensation
55. Method of payment of employees costs
56. Payment of local governments emoluments and allowancesThe Minister shall issue instructions on payments of local governments emoluments and allowances in accordance with regulation 1 to the First Schedule of the Act
Part VI – Accounting and controls
57. Accounting policy and chart of accountsThe Minister shall in consultation with the Accountant General issue the accounting policy and chart of accounts to be used by the councils.
58. Accounting manual and Minister’s instructions
59. Accounting records of local governmentsEach local government council shall maintain the following—
60. Accounting records at administrative units
61. District hospital accounts
62. Health units accounts
63. Accounts of secondary schools and capitation grant
64. Financial management of primary schools
65. General control of finances of administrative unitsThe general control of finances of administrative units shall be the responsibility of the chief executive while the routine financial transactions shall be managed by the sub-accountant.
66. Security of accounting records
67. Retention or destruction of accounting records
68. Accounts of local governments
69. Annual closure of accountsThe annual closure of accounts shall include among others the following—
70. Audit of accountsThe chief executive shall submit the accounts prepared in accordance with these Regulations to the Auditor General for audit in accordance with section 87 of the Act.
Part VII – Treasury management
71. Banking and bank accounts
72. Opening of bank accounts
73. Bank reconciliation
74. InvestmentsAny investment by the council shall be authorized by the council and an investment register shall be maintained showing details of each investment and interest on all investments in accordance with the format provided in the accounting manual and Minister’s instructions.
75. Fixed deposits
76. Borrowed funds
78. Acceptable cheques
79. Cashing of chequesCheques shall not be cashed for any person except in the case of named officers of the council for the purposes of imprest and the payment of salaries, and even then by written authority of the head of finance.
80. Dishonoured chequesThe head of finance shall maintain a list of dishonoured cheques’ defaulters and unless a genuine mistake has occurred, the defaulters shall be refused cheque payment facilities and required to settle their dues in cash, and the law in place regarding dishonoured cheques shall be evoked.
Part VIII – Assets management
81. Custody of stores and other assets
82. Control arrangements
83. Stores control officer
84. Allocated storesAllocated stores shall be kept to a minimum and restricted to those consumable items required for everyday use and the specialised needs of the department, and for which the full stores procedures of unallocated stores are not justified for reasons of economy and size and in the interests of security, economy or financial control, the head of finance, may require heads of departments to reduce or close down allocated stores, or apply unallocated stores procedures to those departments.
85. Register of vehicles and heavy plantHeads of departments shall ensure that all items of vehicles and heavy plant owned, operated or maintained by their departments are recorded in a register of vehicles and heavy plant in the form set out in the accounting manual.
86. Inventories of light plant, working equipment and loose toolsHeads of departments shall ensure that inventories are kept of items of light plant, working equipment and loose tools issued to workshops, installations, works sites, or to employees for use in connection with their official duties and inventories shall be kept in the form prescribed by the accounting manual.
87. Inventories of machinery, furniture and other equipments
88. Registers of land and buildingsHeads of departments shall ensure that registers in the form prescribed under the accounting manual are kept of all land and buildings owned, rented or occupied by their departments and where title deeds exist, such shall be kept in a safe by the head of finance, to be inspected annually by the Auditor-General, and a schedule of these assets shall appear as part of annual accounts.
89. Handing over certificateWhen an officer entrusted with stores and other assets hands over to another officer, both officers shall sign a handing over certificate, copies of which shall be sent to the chief executive, head of finance and head of internal audit and the handing over certificate shall be accompanied by a comprehensive list of items handed over.
90. Centralisation of storesNotwithstanding regulations 81 to 84 all stores shall be centrally controlled, except those in schools and hospitals in which case the institutions referred to shall manage the stores and a schedule sent to the chief executive and the head of internal audit, on quarterly basis.
91. Sale of storesDisposal of stores and other assets shall be in accordance with the Local Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006.
92. Loss through damageAny 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.
93. Use of spare partsWhere a head of department wishes to "cannibalize" unserviceable council owned stores or other assets for spares, the approval of the contracts committee shall be obtained.
94. Responsibility for safe custody of public moneys, and other assets
95. Security of cash and valuablesAll officers of the council who hold public money, documents and books of account, shall ensure their safe custody and take adequate steps to ensure their protection, handling, security and banking, as set out in the accounting manual.
96. Safes, cash boxes and keys
97. Private moniesOfficers are prohibited from keeping private money or effects in council strong-rooms, safes or cash boxes and any private money found in any container shall be credited to revenue at the direction of the inspecting officer.
98. Legal action for recovery
99. Control of receipt books
100. Irrecoverable revenue
101. Arrears of revenue returns
102. Convening of boards of survey
Part IX – Risk management
103. Risk management and internal control
104. Establishment of internal audit units
105. Relationship between head of internal audit and head of financeThe head of internal audit shall submit reports direct to the council, but there shall be harmony and co-operation with the chief executive and head of finance and his or her staff shall report on the systems and operations of the administration whether efficient or effective or economical or free from fraud and other malpractices and are in accordance with these Regulations.
106. Internal audit reviewsIn addition to the duties set out in Regulation 12 and as set out in the internal audit manual, the head of internal audit shall carry out regular reviews to ascertain whether the administration receives value for money in all its activities.
107. Special investigationsThe head of internal audit shall be prepared to carry out special investigation when called upon to do so, and where the Auditor General is unable to do so, as set out in the internal audit manual.
108. External audit
109. Computers and information systems
110. Computer and information security
111. Insurance policy and principalsThe Minister shall issue guidelines regarding insurance policy and principals for the local governments.
112. Preliminary loss report
113. Minor lossesIf the preliminary internal audit assessment reveals that a minor loss has occurred, as defined in the accounting manual, and not involving fraud or negligence, the procedures set out in the accounting manual shall be followed.
114. Loss report formsFor every loss, other than a minor loss the head of department shall prepare a set of loss report forms as set out in the accounting manual, and send them to the head of internal audit.
115. Loss report to executive committeeThe chief executive shall report all losses to the executive committee in accordance with the procedures and formats set out in the accounting manual.
116. Action on final loss report
117. Writing-off of lossesThe executive committee may authorize the writing off of losses in accordance with the values, procedures and reporting requirements as set out in the accounting manual.
118. Surcharge powers
119. Accounting for losses
120. Security for cash in transitThe head of finance shall be responsible for ensuring adequate security for cash in transit is in place.
121. Liability of the councilAn employee shall not admit liability or take any action or enter into any correspondence admitting liability on behalf of the council without approval of the chief executive.
122. Use of private vehiclesAny officer of the council who is authorised to make use of their own vehicle in the execution of the council’s business shall be responsible for effecting adequate insurance cover for such use and shall produce to their head of department or the head of finance on request, evidence of the adequacy of the cover.
Part X – Offences and penalties
Part XI – Miscellaneous provisions
125. Utilisation of funds at village levelThe Minister may give instructions on the utilisation of funds at the village level or to a community group which receives public funds.
126. Reporting of deaths, dismissals etc.
127. Guides, manuals and other publicationsGuides, manuals and other instructional publications to assist in financial management in local governments shall only be authorised by the Minister.
128. Compliance with these RegulationsThe Auditor General, local government inspectors and any other state organs authorized by law shall check for compliance with these Regulations and make reports.
129. Handing and taking over of public offices[Please note: Text of regulation 129 omitted in original.]
130.[Please note: Regulation 130 omitted in original.]
History of this document
01 July 2007
22 June 2007 this version
14 May 2007