The Republic of Uganda
Ministry of Local Government
THE LOCAL GOVERNMENTS
FINANCIAL AND ACCOUNTING MANUAL, 2007
August 2007
TABLE OF CONTENTS
Contents
Page
TABLE OF CONTENTS ..............................................................................................................2
FORMS ..........................................................................................................................................6
ILLUSTRATIONS ........................................................................................................................7
LIST OF ABBREVIATIONS/ ACRONYMS ...............................................................................8
GLOSSARY OF DEFINITIONS ..................................................................................................9
FOREWORD................................................................................................................................12
1
BACKGROUND TO THE MANUAL ..........................................................................13
1.1
INTRODUCTION ...........................................................................................................13
1.2
PURPOSE OF THE MANUAL.......................................................................................13
1.3
LEGAL FRAMEWORK .................................................................................................13
1.4
LOCAL GOVERNMENTS ACCOUNTING POLICIES ...............................................14
1.5
CLASSIFICATION AND CODING OF ACCOUNTS ..................................................14
1.6
EXCLUDED FINANCIAL MANAGEMENT FUNCTIONS ........................................15
1.7 COMPUTERISED FINANCIAL AND ACCOUNTABILITY SYSTEMS .........................15
2.
FINANCIAL ADMINISTRATION AND CONTROL................................................16
2.1
THE FINANCE DEPARTMENT....................................................................................16
2.1.1
Functions of the Finance Department ......................................................................16
2.1.2
Recommended Organisation Chart for a Finance Department ................................17
2.2.2
Records Management...............................................................................................18
2.2.3
Retrieval of Documents ...........................................................................................18
2.2.4
Distribution of Financial Documents.......................................................................19
2.2.5 Records Retention and Storage.......................................................................................19
2.2.6 Destruction of Financial records and Documents...........................................................19
2.3.1
Non Current Assets - Fixed Assets ..........................................................................20
2.3.1.6 Depreciation, ...............................................................................................................21
2.3.2
Current Assets.........................................................................................................21
2.3.3
Management and Control of Safes, Cash Boxes and Keys......................................22
2.3.4
Redundancy, Losses, Disposals and Write Off of Assets.......................................24
2.4
RISK MANAGEMENT AND INTERNAL CONTROL ................................................28
2.4.2
Internal Control............................................................................................................28
2.4.2.1 Internal Control Objectives ....................................................................................28
2.4.2.2 Internal Control Systems..........................................................................................29
2.4.3
Control Procedures.......................................................................................................30
2.4.3.1 Accounting controls .................................................................................................30
2.4.3.2
Administrative Controls .......................................................................................30
2.4.4
Limitations of Internal Controls...............................................................................30
2.5
THE ROLE OF ACCOUNTS STAFF DURING AUDIT, INSPECTIONS &
INVESTIGATIONS ....................................................................................................................31
2.5.1
Internal audits...........................................................................................................31
2.5.2
External Audit..........................................................................................................31
2.5.3
Investigation.............................................................................................................31
2.5.4
Inspections ...............................................................................................................32
3.0
BUDGETING ..................................................................................................................33
3.1
INTRODUCTION ...........................................................................................................33
3.2
THE LEGAL FRAMEWORK.........................................................................................33
3.2.1
The Constitution.......................................................................................................33
3.2.2
The Local Governments Act....................................................................................33
3.2.3
The Budget Act, 2001 ..............................................................................................33
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3.2.4
The Local Governments Financial and Accounting Regulations, 2007 ..................34
3.2.5
Compliance with national priorities.........................................................................34
3.2.6
Timing......................................................................................................................34
3.2.7
Balanced Budget ......................................................................................................34
3.3
GENERAL BUDGET PRINCIPLES ..............................................................................35
3.4
THE BUDGET PROCESS ..............................................................................................36
3.4.1
Preconditions for successful budgeting ...................................................................36
3.4.2
Key elements of the Budget Process........................................................................36
3.4.3
Stages of the Budgeting Process ..............................................................................37
3.5
THE BUDGET FRAMEWORK PAPER ........................................................................39
3.5.1
Introduction..............................................................................................................39
3.5.2
Purpose of the LGBFP .............................................................................................40
3.5.3
LGBFP Key Players.................................................................................................40
3.5.4
Linkage between the LGBFP, the DDP, the Budget and the Annual Workplans ...40
3.5.5
The Structure of LGBFP..........................................................................................41
3.5.6
Quality of LGBFP and linkage to National BFP .....................................................42
3.6
THE BUDGET FORMAT...............................................................................................42
3.7
REVENUE ESTIMATES................................................................................................42
3.8
EXPENDITURE ESTIMATES .......................................................................................45
3.8.1
Final Stage of Budget Process .................................................................................45
3.9
CASHFLOW BUDGET/ MANAGEMENT ...................................................................46
3.9.1
Introduction..............................................................................................................46
3.9.2
Steps in Cash Management......................................................................................46
3.10 REVISIONS OF ESTIMATES........................................................................................59
4.0
REVENUE .......................................................................................................................63
4.1
AUTHORITY FOR REVENUE COLLECTION............................................................63
4.1.2
Local Government’s Revenue Sources....................................................................63
4.2
DUTIES OF REVENUE COLLECTOR AND CASHIER .............................................63
4.3
LOCAL REVENUE, ASSESSMENT AND ENUMERATION .....................................64
4.4
REGISTRATION OF TAXPAYER ................................................................................64
4.5
LOCAL REVENUE COLLECTION AND BANKING .................................................64
4.5.1
Receiving Revenue ..................................................................................................66
4.5.2
Receipts, Tickets and Licences ................................................................................67
4.5.3
Control of Receipt Books and Receipts ...................................................................69
4.5.4
Safe-keeping and Banking the Revenue Receipts ...................................................69
4.5.5
Revenue Accountable Stationery.............................................................................71
4.6
REVENUE RECORDS ...................................................................................................72
4.6.1
Revenue receipts ......................................................................................................72
4.6.2
Revenue Register(s) .................................................................................................73
4.6.3
Accounting for Local Revenue ................................................................................74
4.7
REVENUE ACCOUNTABILITY...................................................................................75
4.7.1
Revenue Accountability...........................................................................................75
4.7.2
Checking of Revenue Accounts...............................................................................75
4.8
ARREARS OF REVENUE .............................................................................................75
4.9
GRANTS FROM CENTRAL GOVERNMENT.............................................................75
4.9.1
Unconditional Grants ...............................................................................................76
4.9.2
Conditional Grants ...................................................................................................76
4.9.3
Delegated Grants......................................................................................................76
4.9.4
Recording Government Grants ................................................................................76
4.10 DONOR AND NGO FUNDS..........................................................................................79
5.0
EXPENDITURE .............................................................................................................80
5.1
INTRODUCTION ...........................................................................................................80
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5.1.2
Department Warrant.................................................................................................80
5.2
PAYMENTS AND COMMITMENTS ...........................................................................81
5.2.1
Key Principles of LG Commitment Control and Payment Process.........................81
5.3.1
Reconciliation of Vote Book ...................................................................................91
5.4
PROCUREMENT OF SUPPLIES, SERVICES OR WORKS........................................91
5.4.1
Initiation of Purchases..............................................................................................91
5.4.2
Local Purchase Order...............................................................................................93
5.4.3
Service Contracts .....................................................................................................95
5.4.4
Acquisition of Goods ...............................................................................................95
5.4.5
Supplier’s Invoice or Contractor’s Certificate Payment Procedures .......................97
5.4.6
Examination of Vouchers ........................................................................................99
5.4.7
Contracts payments (Commitments)........................................................................99
5.4.8
Payments ................................................................................................................100
5.4.9
Payments by Cash ..................................................................................................103
5.5
PURCHASES AND PAYMENTS OUTSIDE UGANDA............................................108
5.6
PAYMENT OF SALARIES AND OTHER EMPLOYEES COSTS ............................108
5.6.1
Preparation of Payroll ............................................................................................108
5.6.2
Employment Costs .................................................................................................110
5.6.3
Preparation and Payment of Salaries .....................................................................110
5.6.4
Employment Income..............................................................................................112
5.6.5
Filing the Payrolls for Custody ..............................................................................115
5.6.6
Effecting & Recording Payments for Salaries .......................................................116
6.0
ACCOUNTING AND CONTROL..............................................................................118
6.1
BASIS OF ACCOUNTING...........................................................................................118
6.1.1
District and Urban Councils.................................................................................. 118
6.1.2
Cash Basis Accounting ..........................................................................................118
6.1.3
Accrual Basis Accounting......................................................................................118
6.1.4
Revenue..................................................................................................................118
6.1.5
Expenditure ............................................................................................................119
6.1.6
Accrued Assets.......................................................................................................119
6.1.7
Accrued Liabilities.................................................................................................119
6.1.8
Non- produced and Fixed Assets ...........................................................................120
6.2
DOCUMENTARY EVIDENCE IN ACCOUNTING...................................................120
6.3
AN ACCOUNT .............................................................................................................121
6.3.1
Types of Accounts .................................................................................................121
6.3.2
Bookkeeping ..........................................................................................................121
6.3.3
Double Entry Bookkeeping System.......................................................................121
6.3.4
The Financial Transaction......................................................................................122
6.4
LOCAL GOVERNMENT BOOKS OF ACCOUNT/ RECORDS................................122
6.4.1
The Journal.............................................................................................................122
6.4.2
Bank Accounts, Cashbooks, Abstracts and Ledger Accounts ...............................125
6.5
REVENUE RECORDING UNDER ACCRUAL ACCOUNTING ..............................150
6.6
ANNUAL CLOSURE OF ACCOUNT .........................................................................153
6.6.1 Boards of Survey...........................................................................................................153
6.6.2 Duties of Boards of Surveys .........................................................................................153
6.6.3
Adjusting Entries ...................................................................................................159
6.6.4
Accrual Accounting Basis......................................................................................162
6.6.5
Treatment of Unexpended Balances ..........................................................................176
7.0
FINANCIAL REPORTING.........................................................................................178
7.1
INTRODUCTION .........................................................................................................178
7.1.1
Legal Reporting Requirements ..............................................................................178
7.1.2
Monthly Financial Statements/Reports..................................................................178
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7.1.3 Quarterly Financial Statements/Reports .......................................................................179
7.1.4
Annual Financial Statements/Reports....................................................................179
7.2. FORMATS OF FINANCIAL STATEMENTS UNDER CASH ACCOUNTING: ...........180
7.3 FORMATS OF FINANCIAL STATEMENTS UNDER ACCRUAL ACCOUNTING:....196
7.4 SCHEDULES AND NOTES TO THE FINANCIAL STATEMENTS: .............................213
7.5
OTHER STATEMENTS, SCHEDULES AND NOTES TO THE ANNUAL FINANCIAL STATEMENTS.......237
7.5.1
Statements, Schedule and Notes. ...........................................................................237
8. CLASSIFICATION AND CHART OF ACCOUNTS ........................................................248
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FORMS
FORM
Form FA 1
Records Retention form
Form BU 2
The Structure of LGBFP
Form BU 3
The Budget Format
Form BU 4
Quarterly Cashflow Budget
Form BU 5
Annual Cashflow Budget
Form BU 6
Cashflow Analysis
Form BU 7
Supplementary Estimates and Reallocation Warrant
Form RE 8
Demand Note/ Certificate of Assessment
Form RE 9
Cashiers Receipt
Form RE 10
Daily Cash Summary Report
Form RE 11
The Revenue Register
Form EX 12
Departmental Warrant
Form EX 13
Commitment Requisition - A & B
Form EX 14
Report of Overdue Bills Held
Form EX 15
Annual Department Cash Request by Quarter
Form EX 16
Department Quarterly Cash/ Commitment Requisition
Form EX 17
Contracts/ Commitment Register
Form EX 18
Vote Book
Form EX 19
Requisition Form for Goods and Services
Form EX 20
Goods Received Note
Form EX 21
Final/ Interim Certificate
Form EX 22
Payment Voucher Form
Form EX 23
Imprest Warrant
Form EX 24
Register of Unclaimed Salaries
Form AC 25 Journal Voucher
Form AC 26 Posting Stamp
Form AC 27 Investment Ledger Account
Form AC 28 Trading Accounts Format
Form AC 29 Revenue Distribution Return
Form AC 30 Report of a Board of Survey on Stores
Form Ac 31
Statement of Discrepancies
Form AC 32 Report of Annual/ Surprise Board of Survey
Form AC 33(a) Register of Fixed Assets – General
Form AC 33(b) Register of Fixed Assets - Motor Vehicles and Heavy Plants
Form AC 33(c) Register of Fixed Assets - Land and Buildings
Form FR 34 Trial Balance (Cash Basis)
Form FR 35 Statement of Income and Expenditure (Cash basis)
Form FR 36 Cash Flow Statement
Form FR 37 Trail Balance (Accrual Basis)
Form FR 38 Statement of Income and Expenditure (Accrual Basis)
Form FR 39 Balance Sheet (Cash Basis)
Form FR 40 Balance Sheet (Accrual Basis)
Form FR 41
Cash Flow Statement
Form FR 42
Details of Income
Form FR 43
Details of Expenditure
Form FR 44 Statement of Arrears of Revenues
Form FR 45 Statement of Outstanding Commitments
Form FR 46 Statement of Losses of Public Assets
Form FR 47 Statement of Reported Losses of Public Assets
Form FR 48 Statement of Stores and other Assets (Physical Assets) Acquired During the Year
Form FR 49 Statement of Disposal of Physical Assets During the Year
Form FR 50 Investments Note
Form FR 51 Borrowings Note
Form FR 52 Accounts Payables Schedule
Form FR 53 Pension Liabilities Schedule
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85
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90
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95
96
98
104
112
124
141
148
149
152
155
156
158
167
168
168
180
191
193
195
207
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210
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6
ILLUSTRATIONS
Illustration
Illustration RE 1
Illustration EX 2
Illustration EX 3
Illustration EX 4
Illustration EX 5(a)
Illustration EX 5(b)
Illustration EX 6
Illustration EX 7
Illustration EX 8
Illustration EX 9
Illustration EX 10
Illustration EX 11
Illustration EX 12
Illustration AC 13
Illustration AC 14
Illustration AC 15
Illustration AC 16
Illustration AC 17
Illustration AC 18
Illustration AC 19
Illustration AC 20
Illustration AC 21
Illustration AC 22
Illustration AC 23
Illustration AC 25
Illustration AC 25
Illustration AC 26
Illustration AC 27
Illustration AC 28
Illustration AC 29
Illustration AC 30
Illustration AC 31
Illustration AC 32
Illustration AC 33
Illustration AC 35
Illustration AC 36
Illustration AC 37
Illustration AC 38
Illustration AC 39
Illustration AC 40
Page
Recording Government Grants
Payments/ Commitments Process
Completing the Requisition Form
Completing the LPO
Specimen of a Cheque
Specimen of a EFT Bank Instruction
Paid Cheque Register
Use of Imprest or Advance
Establishing the Imprest
Payments out of Imprest.
Posting to the Petty/ Imprest Cashbook
Preparing the Payroll
Calculating PAYE
Journalising the Payroll
Opening the Cashbook
Posting of a Cashbook
Cashbook (Bank Column only)
Bank Statement
Bank Reconciliation Statement
Proof of Monthly Abstract
Posting the Payroll to the Expenditure Abstract
Posting Employee costs to the General Ledger
Posting the Salaries and Wages to the Cashbook
Posting Imprest Expenditure to the Abstract
Posting Imprest Expenditure to the General Ledger
Posting of Expenditure Abstract
Posting to the General Ledger
Journal Entry to record Revenue Assessment
Posting Assessment and Receipts to the General Ledger
Reconciliation of Revenue Receivable Control Accounts
Journal to Record Cash Surplus
Journal to Record Cash Deficit
Recording of Irrecoverable Advances
Recording of Short Term Investments and their Income
Recording of Expenses and Losses on Short-term Investment
Recording of Debts and Provision for Doubtful Accounts
Journal Entry to record Annual Depreciation Charge
Amortisation of Capital Reserves
Recording Capital Donations to Council
Recording Re-valued Assets
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82
93
94
101
102
103
105
105
106
107
108
115
124
128
129
131
132
133
135
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137
139
140
140
141
142
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7
LIST OF ABBREVIATIONS/ ACRONYMS
ABS
Act
Admin.
B/d
CAO
CC
C.B
C/d
CE
DP
Dept.
GoU
GRN
DR
HIA
HoF
HoD
H.Q
JV
LGBFP
LGFAR
LPO
LG
LLG
No.
N.S.S.F
P.a
PAYE
PFAA
PPDA
Prog.
PV
REC
S/C
Shs
TC
TB
URA
YTD
VR
Abstract
Local Governments Act Cap 243
Administration
Brought Down
Chief Administrative Officer
Contracts Committee
Cashbook
Carried Down
Chief Executive
Development Plan
Department
Government of Uganda
Goods Received Note
Development Revenue
Head of Internal Audit
Head of Finance
Head of Department
Head Quarters
Journal Voucher
Local Government Budget Framework Paper
Local Governments Financial Accounting Regulations 2006
Local Purchase Order
Local Government
Lower Local Government
Number
National Social Security Fund
Per Annum
Pay As You Earn
Public Finance and Accountability Act
Public Procurement and Disposal of Public Assets Act, 2003
Programme
Payment Voucher
Receipt
Sub County
Shillings
Town Clerk
Treasury Bills
Uganda Revenue Authority
Year to Date
Voucher
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GLOSSARY OF DEFINITIONS
In this Manual, unless the context otherwise requires:“accountant” means an officer appointed and posted to a district, city, municipal or division
council to be in-charge 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, sub-county or any other lower council;
“advances” comprise of prepayment for services and goods to be received at a future date after the
financial year and advances to staff;
“allocated stores” means stores the cost of which is directly charged on the relevant programme,
sub-programme and item of expenditure;
“accountable Stationery” means stationery that requires local governments to fully account for
every transaction entered into them e.g. receipt books, tickets, cheques, paying-in books,
licence forms etc. Tight control over this stationary is important because unauthorised persons
could use these documents to gain access to the Council funds;
“appropriation account” comprise of the accumulated surplus / (deficit) of income over
expenditure account. This balance will be computed as follows:
Balance brought forward
Surplus / (deficit) for the year
Balance carried forward
Shs.
xxxxx
xxxxx
-------xxxxx
=====
Where separate revenue accounts for each of the different Council activities are prepared, a
consolidated balance sheet will be prepared.
“bank” means a financial organization or institution registered with the Bank of Uganda to provide
banking services in accordance with Part VII of the Financial Regulations;
“bank overdraft” will comprise of balances of overdrawn bank accounts at the end of the financial
year.
“cash in transit” means all forms of monies as defined in these regulations being remitted or
transferred from one office or place to another;
“capital discharged” the term covers all methods of discharging capital which include:
(a) Capital fund applied
(b) Capital receipts applied
(c) Repairs and renewals fund applied
(d) Grants applied
“capital outlay” comprises of expenditure on assets which have a realisable value e.g. Land and
buildings, vehicles and heavy plant, light plant, Working equipment, machinery furniture and
movable fittings and equipment.
“capital receipts unapplied” means receipts from sale of assets not yet utilised and therefore part of
the capital fund available to the Council;
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“cash and bank balances” will comprise all imprest cash and bank balances on the Administration
bank accounts;
“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 in accordance with the Regulations;
“currency point” has the meaning assigned to it in the Sixth Schedule to the Act;
“deferred charges” means expenditure for which a loan may be granted but which produces no
tangible assets;
“deposits” comprise of balances on deposit accounts payable either to third parties or refundable to
the depositors e.g. PAYE, NSSF, Withholding Tax for URA, Contract deposits and retention
monies;
“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 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;
“investments” comprises of the value of investment as valued in accordance with the Regulations
“land and building” means land, buildings and enclosures which are owned, rented or occupied by
the local council;
“loans” comprises of the outstanding balances on loans of the Administration. The balances will
include the unpaid interest on such loans;
“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;
“other assets” will comprise assets of short life span such as loose tools.
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“other long term outlay” means a fixed asset capital account which records the purchase of assets
which are not saleable e.g. expenditure on highways, sewers etc. Because the other long term
outlay has no saleable value. It is normal to write the assets out of the accounts when fully
financed;
“public officer” means any person holding or acting in a public office;
“prepayments” comprises of balances on accounts of suppliers of goods and services who have
been paid before the end of the financial year but delivery of the goods and services are to be
made after the close of the year;
“programme” means a functional area under a vote which generates outputs;
“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” means inventories of public assets, current or non-current, tangible or intangible, held by
an Accounting Officer;
“stores and other assets” includes allocated stores, unallocated stores, vehicles, plant, equipment,
tools, machinery, furniture, movable fittings and livestock;
“stock and stores” comprises of stock and stores balance as established by the Board of survey at
the end of the financial year and reconciled to the store records;
“sundry debtors” comprise of debtors for services rendered by Council and not yet paid for as at
the end of the financial year;
“sundry creditors and accruals” represents balances outstanding on suppliers accounts of goods
and services which has not been paid by the end of the financial year;
“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;
“work in progress” comprises of either capital outlay or other long term outlay which is not
completed by the end of the financial year;
“year” means a financial year.
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FOREWORD
Regulation 58(1) of the Local Governments Financial and Accounting Regulations, 2007, provides that the
accounting procedures, methods, forms, formats of accounting records and other requirements to be used by
local Governments and Administrative Units shall be set out in the Accounting Manual but in conformity
with the provisions of the Local Governments (Financial and Accounting) Regulations,2007. This Local
Governments Financial and Accounting Manual, 2007 has been developed in fulfilment of this requirement.
The Manual is an official subsidiary document of the Local Governments Financial and Accounting
Regulations, 2007, and all systems, procedures and controls specified therein represent the lawful
application of the principles contained in the Regulations.
The Manual provides approved policy statements and corresponding procedural guidelines, illustrations and
supporting forms which the finance and accounts staff of Local Governments and Administrative Units
should follow in their day to day work of processing accounting information to aid decision making at
various levels.
If the Manual is strictly followed, Local Governments and Administrative Units should be able to comply
with the financial and accountability requirements, as prescribed in the Local Governments Act and
amplified by the Local Governments Financial and Accounting Regulations, 2007.
Currently the rural Local Governments maintain their books of accounts on a Cash Accounting Basis while
the Urban Councils maintain their books on Accrual Accounting Basis. The two systems have been
incorporated in this Manual particularly in the preparation of the monthly and annual financial statements.
It is anticipated that the rural Local Governments will gradually adopt the Accrual concept for their
accounting. In order to guide the preparation and production of final financial statements under the two
systems, worked examples have been provided in the Manual. These examples are extremely useful,
particularly to the accounts staff with little experience in Public Sector Accounting. Also to ensure uniform
and standard application of this manual, the Chart of Accounts has been included in the Manual.
In the process of developing this Manual, close consultations were made with several institutions, agencies
and local governments themselves. The contributions made by the stakeholders were very useful at all
stages of developing the Manual.
I hope that the Manual will be easy to use and will enable the finance and accounts staff of local
governments and administrative units to keep proper books of accounts and other records and balance their
accounts every year within the required statutory period. I strongly believe that the Manual will
significantly improve the standard of financial management in local governments.
I would like to express my sincere gratitude to all the stakeholders who have contributed in one way or
another to the development of this manual. We are especially grateful to our development partners,
particularly the Department for International Development (DFID) and the World Bank, for their financial
and material support towards the development of the manual.
I sincerely hope and trust that the users of the manual will find it quite useful in carrying out their duties.
Kahinda Otafiire
Maj Gen
MINISTER OF LOCAL GOVERNMENT
August 2007
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1
1.1
BACKGROUND TO THE MANUAL
INTRODUCTION
This Financial and Accounting Manual shall apply to all financial transaction and business of all
Local Government Councils and Administrative Units and to the Management of all public
moneys and public property. The Manual provides Accounting policies, systems, procedures,
forms and accounting records. The Manual shall guide and regulate the finance and accounts staff
while performing their day-to-day work. It should be used concurrently with the Local
Governments Financial and Accounting Regulations, 2007.
The Chief Executives at all levels of local governments are responsible for providing security and
control of their Council’s funds and assets. This can only be achieved by the rigid enforcement of
financial control measures through the Council’s Senior Finance Officers. The Senior Finance
Officers must acquaint themselves with the provisions of this Manual and instruct the Junior
Finance Officers in the correct procedures relevant to their duties. Regular training sessions and
discussions should always be held, within the finance units, at which the instructions and
procedures laid down in this Manual can be fully explained and understood.
1.2
PURPOSE OF THE MANUAL
The Manual provides guidelines based on illustrations and instructions for application by Local
Councils Finance and Accounts Officers in their day-to-day duties of processing accounting
information for decision making at various levels in the Local Councils and related Institutions.
The Manual provides comprehensive but simple basic instructions to finance and accounts staff
involved in processing of accounting information for accountability and reporting purposes. The
procedures covered in the Manual relate to budgeting, collecting revenue, expenditure, recording,
summarizing, and preparing financial statements and reports for all Levels of Local Government
Councils.
The Manual consists of Policies, Illustrations (Procedures, Activities and Tasks) and Forms. The
forms are pre-formatted documents containing instructions and place-holders for data entry to
monitor progress through a particular procedure in order to ensure proper record-keeping.
1.3
LEGAL FRAMEWORK
The Constitution of the Republic of Uganda, 1995, outlines the Principles and Structures of Local
Governments. These are elaborated in Article 176 of the Constitution. Articles 190 to 197 of the
Constitution details powers of Local Governments to plan, mobilize revenue and entitlement to
receive grants from Government. In particular, Article 196 of the Constitution requires Parliament
to make laws governing financial controls and accountability by Local Governments.
Section 86 of the Local Governments Act, requires every Local Government and Administrative
Unit to keep proper books of account and financial records, balance the accounts and produce
statements of Financial Statements at the year end. In addition section 78(2) of the Local
Governments Act requires the Minister to make, by Statutory Instrument, Financial and
Accounting Regulations prescribing financial and accountability measures for compliance by all
Local Governments.
This Manual has been written in conformity with Section 78(2) of the Local Governments Act,
and Regulations 58 of the Local Governments Financial and Accounting Regulations, 2007. The
The Local Governments Financial and Accounting Manual 2007
13
Accounting Manual is a subsidiary document of the Local Governments Financial and Accounting
Regulations, and all systems, procedures and controls specified in the manual shall represent the
lawful application of the principles contained in said Local Government Financial and Accounting
Regulations.
However, it should be noted that Public Finance and Accountability Act and its subsidiary
regulations shall also be applicable.
1.4
LOCAL GOVERNMENTS ACCOUNTING POLICIES
In accordance with regulation 57 of the Local Governments Financial and Accounting Regulations
2007, the Minister shall in consultation with the Accountant General issue the accounting policies
to be used by Councils.
At the time of producing the manual, rural local governments were preparing their financial
statements on a cash basis while the urban local governments were using accrual concept. The two
systems have been incorporated in this Manual particularly in the preparation of the monthly,
quarterly and annual financial statements. It is anticipated that the rural local governments will
also gradually adopt the accrual concept for their accounting.
1.5
CLASSIFICATION AND CODING OF ACCOUNTS
Accurate classification of financial transactions is a vital pre-requisite for accounting and financial
control. All Council revenue, expenditure and below-the-line accounts shall be recorded in the
books of account/ records by applying the official GOU Classification and Chart of Accounts.
Details of the classification and coding of financial information have been attached to this
accounting manual under Annex 1. However, it is important to note the following :
(1)
When dealing with the classification, coding and posting of any financial transaction, the
GOU Classification and Chart of Accounts must be strictly observed. Local Governments
are not allowed to introduce their own accounts classifications, accounts names or accounts
codes. Any financial transaction must be capable of fitting into one or more of the account
names and codes in the GOU Chart of Accounts. It is the responsibility of the Head of
Finance to select from the Chart of Accounts the account name and code that best describes
the transaction at hand. For purposes uniformity and control, any desirable new
classifications and codes will be only be issued centrally by the GOU as deemed
appropriate, however, Chief Executives have the duty to submit to the Minister any
proposals for the amendment of, or additions to the Classification and Chart of Accounts.
To ensure that the account name used is not fictitious and ineligible, the account code
should always be indicated alongside the name of the account
(2)
The Head of Finance shall ensure that all Councils financial transactions are properly
classified and coded. The account name and code must be carefully selected to ensure this
requirement. Where there is any doubt about the account name and code to apply reference
must be immediately sought by reading Sections 14 to 18 of the GOU Chart of Accounts.
These sections explain what should be included under the various account names and
codes. They also explain the accounting treatment for specific financial transaction
(3)
Care must particularly be taken when dealing with accounts which have almost identical
names but different codes because it is very easy to post a transaction in a wrong account
The Local Governments Financial and Accounting Manual 2007
14
in this case. For example, the grants from the central government appear under three
general accounts classifications – revenue, assets and liabilities. Local governments,
therefore, are advised to always read the explanation sections of the GOU Chart of
Accounts in order to understand the differences in the accounting treatment for such
accounts.
(4)
Some examples of the Control and Subsidiary accounts codes are given below:
Code
Control Account Name Subsidiary Accounts Names
133103 LG Conditional Grants
321106 Collection Accounts
312202 Machinery and
Equipment
321603 Sundry debtors
1.6
The various types of conditional grants from the
GOU which have been accounted for
The General Fund account and all other collection
accounts
Various types such as Computers, printing
machines etc
Various debtor for the various revenue sources
EXCLUDED FINANCIAL MANAGEMENT FUNCTIONS
The following financial management functions have not been covered in this manual. The
policies, procedures and forms applicable to them are expected to be issued under separate
manuals:
a) Internal Auditing
b) Payroll
c) IT Systems
d) Security Planning and
e) Disaster recovery.
f) Procurement.
1.7 COMPUTERISED FINANCIAL AND ACCOUNTABILITY SYSTEMS
Where computerised financial management and accountability systems are operated by a Local
Government, they may be excluded from full adherence to all procedures and formats specified in
this manual, provided that the computer system in use has been officially endorsed by the
Accountant General. This implies that all forms/formats/reports generated by such an approved
system shall form part of this Manual.
Such endorsement will only be given after a thorough review of the functionality of the
computerised system to ensure that it meets the critical requirements of the Local Government
Accounting Manual and International Public Sector Accounting Standards and best practice.
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2.
FINANCIAL ADMINISTRATION AND CONTROL
2.1
THE FINANCE DEPARTMENT
The Finance Department is a service department to other council’s departments. All financial
management issues, records, stores, assets and financial system are the responsibility of the
Finance Department.
2.1.1
Functions of the Finance Department
The functions of the Finance Department follow logically from the duties of Head of Finance in
accordance with Regulation 11 of the LGFAR , and they are, among others:
(1) Coordinating the preparation of Council’s budgets
(2) Collecting Council’s revenue
(3) Revenue assessment
(4) Revenue mobilization
(5) Making payments
(6) Cash flow Management
(7) Budget implementation and control
(8) Bookkeeping
(9) Monthly financial reporting
(10)
Advising Councils on financial matters
(11)
Assets Management
(12)
Safe custody of financial documents, stationery and accounting records
(13)
Producing Financial Statements
(14)
Facilitating Internal and statutory external audit.
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16
2.1.2
Recommended Organisation Chart for a Finance Department
A Higher Local Government Council Finance Department may have the following organizational structure.
Head of Finance (Chief
Finance Officer)
Principal Finance Officer
Revenue & Budget
(Senior Finance Officer)
Finance Officer
Senior Accounts
Assistant
Expenditure & Accounts
(Senior Finance Officer)
Examination and Book
Keeping
(Accountant)
Senior Accounts
Assistant
(Examination)
Salaries and Cash Office
(Accountant)
Senior Accounts
Assistant
(Book Keeping)
Senior Accounts
Assistant
(Salaries)
Accounts Assistant (s)
Accounts Assistant (s)
Senior Accounts
Assistant(Cash Office)
Accounts Assistant(s)
Accounts Assistant (s)
Note
1. Councils or LLGs with fewer Finance Officers could have one Senior/Finance Officer in charge of both revenue and accounts.
2. Each LG will follow this structure with modification as in the approved structure and the model structure applicable to them.
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2.2
FILES AND RECORDS MANAGEMENT
2.2.1 Types of Financial Records and Files
A Finance department shall have the following types of records and files:
(1) Revenue records - Revenue registers, receipt books, tax ticket registers and assessment
forms, files, revenue collection cashbooks.
(2) Expenditure records – Payment vouchers, payroll, vote books, abstracts, ledgers.
(3) Asset records – Asset registers
(4) Liabilities records e.g. commitment register
(5) Financial reports – Monthly, quarterly and annual financial reports and other
statements
(6) Any other records prescribed by the law.
All payments made by a local government must be recorded and filed in a serial-logical
order. The Head of Finance must ensure that all payments voucher are supported by
relevant documents including LPOs, Delivery notes, invoices, etc and are filed properly .
2.2.2
Records Management
Council’s financial records and books of accounts must be managed properly so that they
can be used efficiently, economically and effectively. The management of financial records
involves planning, organizing, directing and controlling the records function within the
finance department functions. Financial records are a valuable property and must be
managed from the time they are created or received up to the time they are destroyed.
It is important that one individual is assigned, within the finance department, to act as a
records officer in order to place this responsibility on one officer. The selected person
should be facilitated to get basic training in records management.
The Head of Finance should ensure funds are budgeted for equipment, files, filing cabinets,
etc, for the management of financial records.
2.2.3
Retrieval of Documents
(1) A requisition should always be filled and appropriately approved by the Records
Management Officer, when requesting for a particular file or record. To avoid people
misusing sensitive materials, some files should be marked confidential or classified or
even personal. In this way they should not be released without proper authorization.
(2) Each person who takes a file should be held personally liable for its custody and
returning it for storage. Any file issued should be charged out to a particular borrower
by recording the name of the borrower. The borrower must acknowledge by signing in
a charge-out book/register.
(3) The charge out register must indicate the date of returning the file.
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18
(4) Files should always be followed up by checking the return of borrowed files within a
reasonable time.
2.2.4
Distribution of Financial Documents
Financial documents are sensitive and their distribution should be restricted and controlled.
Procedures should be put in place for distribution of financial documents only through
authorised channels and to ensure they reach the intended recipient. Documents which may
land in wrong hands may be misused, leading to losses or other serious consequences for
the Council. Cheques, Payment vouchers, supporting documents and books of accounts are
quite sensitive and require careful handling.
However, some financial documents are public documents. Therefore, their accessibility by
the public should be open and/or at a known cost price.
2.2.5 Records Retention and Storage
The principal accounting books and records shall be retained for a period of at least fifteen
years. However, the personnel records shall be retained for a period of at least thirty years.
Any deviation from this retention and storage period shall be done with authority and
permission of the Auditor General.
2.2.6 Destruction of Financial records and Documents
Financial records cannot be kept by the local government forever because this is not
practical. Inactive documents and files have to be moved to an archive where they can stay
for a limited number of years. The originals and copies of vouchers and used receipts may
be destroyed after six years, provided they have been audited. Any destruction earlier than
six years (but not less than four years) must first be approved by the Auditor General. No
financial documents should be destroyed if there are any related outstanding audit queries
or investigations. Destruction of records should be by burning or shredding. A record of
documents destroyed shall be maintained in a format presented in Form FA 1 below.
Form FA 1: Records Retention Form
File
Reference
Number
Name of
record
Date
produced
Retention
period
The Local Governments Financial and Accounting Manual 2007
Destruction
date
Chief Executive
signature
19
2.3
ASSETS MANAGEMENT
Assets are defined as “resources controlled by an entity from which future economic
benefits or services are expected to flow” Local governments own a number of
assets/resources which must, therefore, be managed and utilized efficiently and effectively
in order to maximise the future economic benefits or services provided to the community.
This responsibility is an onerous one and it requires due diligence of Council employees .
Assets include:
(1) Non Current Assets – mainly Fixed Assets, and
(2) Current Assets – mainly Cash/Bank balances, Stores and Debtors.
This section describes the obligations of responsible officials in the management of
Council’s assets, including the recording and write off of any related losses.
2.3.1
Non Current Assets - Fixed Assets
There should be a strong system of internal controls over fixed assets starting from
acquisition, use to final disposal. The key issues to note in the management of fixed assets
are given below.
2.3.1.1 Acquisitions.
The assets purchased must be those that are required by the LG. Careful identification of
the necessary assets should be carried out via a capital investment appraisal exercise. Fixed
assets purchase must observe the provisions of Local Governments (Public Procurement
and Disposal of Public Assets) Regulations, 2006.
2.3.1.2 Maintenance.
Fixed assets should be properly maintained, ideally through an organised system of
planned preventative maintenance. This will provide for scheduled maintenance before an
asset breaks down or deteriorates badly. Assets which breakdown cost much more to repair
and usually have to be removed from service during repair. Therefore, reasonable
maintenance budgets must be provided in each local government budget every year, and
maintenance activities must be diligently carried out. Maintenance registers, aligned to or
part of the fixed asset register, will facilitate the process.
2.3.1.3 Capacity Management.
This involves matching the capacity of the asset and the demand placed on it. Insufficient
capacity means partial service provision – some beneficiaries must wait or all beneficiaries
will get less service. Too much capacity means under – utilisation of the asset, or assets
lying idle, which is wasteful.
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20
2.3.1.4
Asset Records.
The following documents are used in fixed assets management:
(1) Log book especially for vehicles, tractors and so on to identify exactly what activities
have been performed and at what date and time;
(2) Fixed Assets Register. These show location, title number or reference, description, cost,
additions, disposals etc. for each item of fixed assets, classified into different categories
of fixed assets. The purpose of these registers is to keep track of all council fixed
assets, and support the planning and execution of maintenance procedures.
2.3.1.5 Disposition of Assets.
Assets are supposed to be disposed off after recommendations from the Board of Survey
Report and using procurement procedures which are provided for under the Local
Governments (Public Procurement and Disposal of Public Assets) Regulations, 2006. These
assets could fetch some revenue for local governments. Assets which are not disposed off in
time will lose value. The overall intention is to maximise the value realised by Council on
the disposition of an asset, in order to contribute to the cost of acquiring new assets.
2.3.1.6 Depreciation,
Depreciation represents the loss in value, for the period under review, of fixed (capital)
assets as a result of use, physical deterioration, obsolescence or accidental damage. It is
treated as an expense for the period. The Local Councils using accrual basis of accounting
shall depreciate their fixed assets according to the guidelines provided in Chapter 6 of this
Manual. However, Councils must follow the policy guidelines issued by the Minister
concerning the depreciation for specific fixed assets.
2.3.2
Current Assets
2.3.2.1 Treasury Management:
Councils are required to manage their cash flows to maximum advantage. This entails
ensuring :
(1) that procedures for applying for, and receiving all grants from Government are
completed on time, and all outstanding grants are followed up promptly.
(2) that all local revenue is promptly banked intact
(3) bills due are paid promptly, so that interest charges for late payment are not
incurred
(4) any surplus funds not required immediately are invested in short or medium term
money instruments, such as bank deposits or treasury bonds, in order to maximise
the interest return. Surplus funds lying in a current account represents an asset lying
idle, and should be avoided.
(5) the above processes are supported by the completion of cash flow forecasts which
are fully described in section 3.9.
2.3.2.2 Stores Management:
Holding stores has a high cost including storage, deterioration, obsolescence, pilferage,
the opportunity cost of tying up funds in stores for long periods, as well as the costs of
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21
ordering (e.g. Contracts Committee, costs, transport, etc.). The objective of stores
management is to minimize the quantities and value of stores held, while avoiding the
incidence of ‘stockouts,’ as minimisation will reduce the costs of holding Stores. The
techniques to achieve this are: (1) The economic order quantity model (EOQ).
(2) Just in Time (JIT) systems.
Local Governments are encouraged to apply such techniques, particularly the EOQ
procedure which often has more relevance in Local Government. In addition Councils are
required to:(1) Provide adequate physical protection of stores from theft and the weather, and restrict
access to the stores to authorised officers only
(2) Provide a system of stores records that register the receipt and issuing of stores against
pre-numbered accountable stationary, and provide a running total of the balance on
hand.
(3) Record the purchase price / unit cost of all stores items received for each consignment
(4) Conduct periodic/ quarterly physical stock counts, by independent officers, to verify the
balance on the stores records.
(5) Follow the prescribed write off / loss recording procedure, noted in paragraph 2.3.4,
for all stores shortages discovered during the physical count, or at any other time
2.3.2.3
Debtors.
Money owed to Council represents an asset that is idle, as it denies the Council the
opportunity of using the money to provide services promptly. It is therefore important to
minimise debtors by following up the collection of debts in a timely, systematic and
vigorous manner. Any debt not collected is a serious matter and represents a loss to
Council. The appropriate loss recording procedure for bad debts noted in paragraph
6.4.2.18.must be applied.
2.3.3
Management and Control of Safes, Cash Boxes and Keys
(1)
Supply of Safes and Cash boxes
All safes and cash - boxes must be obtained through the Head of Finance who shall
keep a Register of Safes and Cash-boxes clearly showing the location of each and the
officer responsible.
(2)
Responsibility for Original Keys
An officer holding the original key to a safe or cash - box is personally responsible for
its safe custody and must remain present when the facility is opened or locked where
double locking with separate keys exist.
(3)
Handing Over and Taking Over
Where an officer holding the key to an Administration safe or cash - box hands over
the key to another officer, the contents of the safe or cash box shall be checked by that
The Local Governments Financial and Accounting Manual 2007
22
officer and a handing-over certificate completed and any discrepancy by that officer
reported to the Head of Finance and the Head of Internal Audit.
It is the responsibility of the officer handing over a key to ensure that his or her successor is
informed of the identity of any other key-holders and the location of the duplicate key.
(4)
Duplicate Keys
The duplicate and triplicate keys, if any, of any safe or cash-box must be enclosed in a
separate scaled envelope with the description and details marked on the outside and handed
over to the Head of Finance for safe-keeping and the Head of Finance shall keep a register
of all deposits and withdrawals of keys.
(5)
Lost Keys
(a) The loss of the key of any safe, strong-room or cash-box, or any other equipment, shall
be reported immediately to the Head of Finance and Head of Internal Audit and the
officer's immediate superior with a full explanation of the loss and any other keyholders must also be informed immediately.
(b) The duplicate key shall be obtained only to open the container for removal and
verification of the contents and the container may not thereafter be used until the lock
has been altered and new keys provided.
(c) The cost of altering or changing a lock and providing new keys may be charged to the
officer responsible for the loss and shall also be held responsible for the loss of the
contents of the container if the loss of key is caused through negligence.
(6)
Compromise of Keys of Locks
In the event of a key-holder having any suspicion that the keys of a strong-room, safe
or cash-box have been exposed to copying, or the locks interfered with, he or she shall take
appropriate action.
(7)
Duplicate Keys of Altered Locks
When a lock is altered the new duplicate key shall be kept and arrangements shall be
made for the destruction of the old duplicate key.
(8)
Transfer of Safes and Cash boxes
Transfer of safes and cash - boxes between departments and other locations shall be
approved by the Head of Finance.
(9)
Private Monies, etc.
Officers are prohibited from keeping private money or effects in Administration strongrooms, safes or cash-boxes and any private money found in any container shall be
credited to Revenue at the direction of the inspecting officer.
(10)
Verification of Contents
Every officer in charge of a safe or cash-box shall check the contents daily and
report any discrepancy to the Head of Finance and the Head of Internal Audit.
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23
2.3.4
2.3.4.1
Redundancy, Losses, Disposals and Write Off of Assets
Write-off Redundant Stores and Other Assets.
When stores and fixed assets have become redundant, obsolete or unserviceable through
normal wear and tear, they shall be written off in accordance with the following
procedures-;
(1) the head of department shall prepare a list of the items giving description, reason for
write-off, original cost and current estimated value, and send a copy to the Chief Executive
requesting a Board of Survey to examine the items;
(2) the Chief Executive shall convene a Board of Survey under paragraph 6.6.1 and the
Board shall examine the items sending their report to the Chief Executive;
(3) the Chief Executive shall submit the report of the Board of Survey to the Executive
Committee for approval that the items should be written off; and .
(4) after approval the items shall be entered in the Write-off Register.
2.3.4.2
Loss Through Damage.
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 subparagraphs 8 and 9 below shall be followed.
2.3.4.3
Disposal of Written- off Stores and Assets.
(1) Redundant, obsolete or unserviceable stores and other assets which have been written
off may be disposed of at approved dumping areas under the supervision of the Auditor
General, if they have no marketable value, and care shall be taken to protect the
environment.
(2) Items which have a marketable value shall be sold by public auction unless the Local
Government Contracts Committee approves otherwise in the circumstances outlined in
subparagraph 4 below
(3) The Executive Committee may seek professional advice from approved firms of valuers
in specific professions such as land valuation, to determine reserve prices after which
the approval of the Contracts Committee shall be sought, giving the Board full
information.
2.3.4.4
Conduct of Public Auctions
(1) When redundant, obsolete or unserviceable vehicles, plant or similar assets are to be
disposed of, they shall be sold by public auction, and the reserve price shall be determined
after establishing the Book Value of the assets.
(2) Market values of assets can also be ascertained, where necessary, by qualified valuers,
before the reserve price is fixed.
(3) The head of the disposing department shall prepare , a schedule of such items quoting
the authority for disposal and indicating the ascribed current values and copies of the
schedule shall be sent to the Chief Engineer with copies to the Head of Finance, Head of
Internal Audit and Contracts Committee.
(4) While awaiting disposal the items shall be protected under lock and key in the charge of
a Storekeeper or reliable officer of the Council.
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24
(5) When sufficient items have accumulated to justify a public auction the Chief Engineer
shall notify the Chief Executive to request the Contracts Committee to appoint a reputable
auctioneer and to fix commission and set a date for the auction.
(6) The auction shall be attended by representatives of the Contracts Committee, the Head
of Finance and the Head of Internal Audit to ensure that the Council's best financial
interests are kept and the Council Officers shall have the power as a team to stop the
auction or withdraw any item if they suspect any irregularity and report on the conduct of
the auction and the proceeds to the Chief Executive and to the Contracts Committee.
Reasons for stopping an auction and the stoppage itself must be reported to Contracts
Committee and Executive Committee.
The auctioneer shall account for the proceeds of the auction within seven days of the
auction and items sold and the price obtained shall accompany the remittance.
2.3.4.5
Use of Spare Parts.
Where a department head wishes to cannibalise unserviceable Administration owned stores
or other assets for Spare parts, the approval of the Contracts Committee, shall be obtained.
2.3.4.6
Sale by Public Tender.
Where a head of department is of the opinion that sale by public tender would be preferable
to public auction, the approval of the Contracts Committee shall be obtained.
2.3.4.7
Responsibility for Safe Custody.
Every officer who is in possession of any public moneys, stores, other assets, land and
buildings is responsible for their safe custody and protection and for any loss thereof.
Similarly, an officer having the duty to inspect, control or supervise another officer in
possession of any public moneys, stores, other assets, land and buildings, shall accept
responsibility for a loss unless it can be demonstrated that the loss was not facilitated by his
failure or neglect to carry out his duty or to make adequate arrangements to secure safe
custody and protection.
2.3.4.8
Preliminary Loss Report
(1) The head of the department in which a loss has occurred shall make, immediately on
discovery of the loss, a report of loss, a preliminary report to both the Head of Internal
Audit and Head of Finance and a copy shall be sent to the Accounting Officer.
(2) Action on a loss discovered by the Board of Survey shall be initiated by the Head of
Finance, in consultation with the Accounting Officer.
(3) The Head of Internal Audit shall promptly carry out an assessment of the situation in
respect of each preliminary loss report, and if he or she suspects that theft or fraud has
occurred, he or she shall request the Criminal Investigation Department to investigate.
(4) No head of department shall withhold a report on any loss, either known or suspected,
even if restitution has been, or is to be made.
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25
2.3.4.9
Minor Losses.
(1) If the preliminary internal audit assessment reveals that the loss is less than 2.5 currency
points; the loss has occurred in the normal course of business; fraud or negligence is not
suspected; and full restitution has been made, then the loss shall be regarded as a "minor
loss"
(2) Minor losses shall be scheduled by the Head of Finance and reported by the Chief
Executive to the Executive Committee and a copy of the schedule and all supporting
documents shall be filed for subsequent inspection and audit purposes.
(3) The Executive Committee may direct that any minor loss shall be further investigated
to ascertain the reasons for the occurrence and endeavour to improve security, reduce
carelessness.
2.3.4.10
Loss Report Form.
(1) For every loss (other than a minor loss) the head of department shall prepare a set of
loss report forms in the manner prescribed in this chapter, and send them to the Chief
Executive who will then forward them to the Head of Internal Audit.
(2) The Head of Internal Audit shall comment on the report, including the results of his or
her investigations, append copies of the Criminal Investigation Department report
where applicable ( or interim Criminal Investigation Department report where
investigations are long drawn out), and send the loss report forms, and attachments, to
the Chief Executive with copies to: Auditor General, RDC, Council Chairperson, Head
of Finance.
(3) In every case of loss of stores or other assets arising from theft, damage, accident or
abnormal wear and tear, including a loss discovered by a Board of Survey, the Head of
Internal Audit shall obtain a monetary value for the loss and a valuer's, insurer's or other
expert's report shall then be appended to the loss report (which shall include damage to
motor vehicles, etc., following accidents where the amount of the loss shall be the net
cost of repairs less any insurance proceeds.)
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26
x x x x x COUNCIL
LOSS REPORT FORM
(Per FINANCIAL Regulation 114)
To:
Chief Executive
Department
................................................................................................................................................................
Place where Loss Occurred ....................................................................................................................................................
Date of loss and Date when Discovered .................................................................................................................................
Amount of loss (If known) .....................................................................................................................................................
Description of loss
.........................................................................................................................................................
Name & Designation of Officeer
Immediately Responsible for
Items lost
Comments: .............................................................................................................................................................................
........................................................................................................................................................................
Signed (Head of Department) ................................................................ Date ......................................................................
To:
Chief Executive
After investigation, it appears that the amount of the loss is:
.......................................................................................................................................................................
CID Report Attached
Comments: ...........................................................................................................................................................................
......................................................................................................................................................................
Signed:
...............................................................
Date ..................................................................................
Head of Internal Audit
Distribution:
2.3.4.11
(1)
(2)
(3)
(4)
Chief Executive
Council Chairperson
Resident District Commissioner
Auditor General
(5)
Head of Department
Report to the Executive Committee
1) The Chief Executive shall report all losses to the Executive Committee segregating
them into progress reports on losses still under investigation, and final reports on losses.
2). The final report to Executive Committee on each loss shall contain the following
information(i)
an account of the circumstances of the loss and follow-up action taken;
(ii)
an explanation of any delay in discovering or reporting the loss;
(iii)
a clear statement of the final net loss and of the sources of any recoveries made
thus far;
(iv)
an indication of .the security arrangements in force at the time of the loss,
whether these were being followed and any improvements recommended to
prevent a recurrence;
(v)
the result of any Criminal Investigation Department investigations;
(vi)
an opinion as to whether the loss arose directly or indirectly from the
negligence of any officer, employee or Councillor;
(vii)
a clear recommendation as to the action to be taken.
2.3.4.12
Action on Final Report
1) On receipt of the Chief Executive's final report on a loss, the Executive
Committee shall consider the report and issue such directions as it shall see fit
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regarding the recovery or write-off of the loss, within the terms of paragraph
2.3.3.1 and steps to be taken to prevent a recurrence of such loss, and may
recommend that a surcharge be imposed in accordance with paragraph 2.3.3.14
2) A copy of the Chief Executive’s final report on a loss, together with the decisions
and recommendations of the Executive Committee, shall be reported to the
Council and sent to the Resident District Commissioner and Auditor General and
the Head of Finance shall also retain a copy on file for inspection and audit
purposes.
2.3.4.13
Write-off of losses
(1) The Executive Committee in consultation with Auditor General is empowered to
authorize the writing-off of losses not exceeding 50 currency points where it is
satisfied that the loss is not recoverable.
(2) Where the loss exceeds 50 currency points the Executive Committee of the Council
shall inform the Minister, who shall, in consultation with the Auditor-General,
advise the Council what action to be taken.
2.3.4.14
Surcharge
The Executive Committee may, after consideration of the final report of the. Head of
Finance on a loss, recommend that a surcharge amounting to the whole or part of the value
of the loss be imposed on any officer, employee or anybody responsible including a
Councillor.
2.4
RISK MANAGEMENT AND INTERNAL CONTROL
2.4.1 Risk Management
The Head of Finance is responsible for advising on risk management and effective systems
of internal control. This role is carried out in collaboration with the Internal Audit function.
These arrangements need to ensure compliance with all applicable legislation and
regulations, and other relevant statements of best practice, and ensure that public funds are
properly safeguarded and used economically, efficiently, and effectively in accordance with
the statutory and other provisions that govern their use.
2.4.2
Internal Control
Internal controls can be defined as the whole system of controls, financial or otherwise
established by Council Management to secure as far as possible the propriety of
transactions and accuracy and reliability of a Council’s records and security of its assets. It
is about separation of duties and responsibilities, such that the works and actions of one
person are independently checked by another person. Council structure, management and
financial control systems are essential of a sound internal controls system.
2.4.2.1
Internal Control Objectives
Internal Controls are set up by management to achieve the following objectives.
(1) Physical access to assets and financial records only when authorized;
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(2) Authorisation of all transactions;
(3) The prompt and correct recording of transactions/events;
(4) The confirmation of the existence of recorded assets.
The first two objectives are intended to protect the assets of a LG from being misused, lost
or stolen. The next two objectives are meant to ensure that the accounting records are
accurate and complete and that they tally with the actual existence of the assets.
All the four controls above are collectively termed “Accounting Controls” because they
deal with the efficiency of the accounting system.
Local Governments, however, deal in many transactions which involve many employees
and politicians as well as taxpayers. Therefore further controls must be put in place to
ensure that management policies and orders are effectively carried out. These other
controls, which are called Administrative Controls, have the following objectives:
(1)
Promotion of efficient operations by reducing waste and duplication of effort;
(2)
Encouraging compliance with LG policies and procedures.
2.4.2.2 Internal Control Systems
(1)
Organisational Structure
The Council Organisational structure should be designed in such away that it clearly
defines areas of responsibility and reporting channels. The structure should indicate the
following:
a) Demarcation of Council’s responsibilities of Departments, Sections and subsections;
b) Appointment of individuals to assume responsibilities;
c) Overall co-ordination of Council’s responsibilities.
(2)
Financial Control System
The system is to be based on Part V1 of the Local Governments Financial and Accounting
Regulations, 2007.
(3)
Management Control System
This is a system of control over the operations of the council that includes budgetary
controls, performance appraisal and review of the systems including management
committee reports and correspondences.
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2.4.3
Control Procedures
Within the objectives of internal controls cited above some specific control procedures will
be put in place by a LG to prevent and detect errors and fraud. The following accounting
and administrative controls should be in place at the minimum...
2.4.3.1 Accounting Controls
(1) Approval and control of documents;
(2) Reconciliation Statements;
(3) Checks on arithmetical accuracy of records (e.g. by re-adding);
(4) Comparison of internal with external data;
(5) Maintenance and review of control accounts;
(6) Pre-numbering of vouchers;
2.4.3.2
Administrative Controls
(1) Quality Controls;
(2) Personnel procedures for recruiting and retaining employees;
(3) Performance statistics that check to ensure operations are running smoothly;
(4) Stated conflict of interest policy;
(5) Annual leave and job rotation.
2.4.4
Limitations of Internal Controls
Although a strong system of internal control is desirable, it can only provide LG Managers
with reasonable assurance that their objectives are reached rather than complete assurance.
This is because there are limitations, which are inherent within internal control system.
Management should guard against the following limitations.
(1)
Staff may collude internally or with outsiders to circumvent the controls.
(2)
Controls may be abused by those with authority e.g. a manager responsible for
authorising a transaction may intentionally authorise a wrong transaction.
(3)
It is always a requirement that the cost of internal control is less than the potential
loss, which would arise if the control is not in place. Therefore, some controls may
not be implemented because they are too costly (e.g. segregation of duties in a small
LG).
(4)
Controls may fail to work due to human error. For example where a chairperson of
a District signs a contract innocently when he/she is not authorised to do so.
(5)
Internal controls only cover routine transactions. Non-routine transactions are not
normally covered.
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(6)
Procedures may change over time and this may render internal controls inadequate
if they are not updated regularly.
2.5
THE ROLE OF ACCOUNTS STAFF DURING AUDIT, INSPECTIONS &
INVESTIGATIONS
Audits may be internal or external. The Internal Auditors who are part of the Council’s
Administration carry out the internal Audits.
The duties and responsibilities of the Internal Audit Department in a local Council are set
out in Section 91 of the Act.
The External Auditors are independent of the Council’s Administration and they are
governed by auditing standards to be determined by the Auditor General’s office from time
to time or by the Accountants Statute/Act. It is the duty of the Auditor General to carry out
such audits, but he/she may appoint any other independent auditor to execute the audit on
his/her behalf. This other independent auditor shall report to the auditor general.
2.5.1
Internal Audits
The Head of Internal Audit shall head the Internal Audit Department. The Head of Internal
Audit shall work in harmony and cooperation with the Chief Executive and Head of
Finance and shall report to Council on whether the systems and operations of the
Administration are efficient, effective, economical and free from fraud and other
malpractices.
The Finance and Accounts staff are expected to provide the Internal Auditor with relevant
information required of them in reasonable time, and form.
2.5.2
External Audit
This is intended to provide information that will enable the Auditor General or any other
auditor appointed by him/her to form an opinion regarding the truth and fairness of the
financial position as presented by the Council.
In this exercise, the duties of the Accounts Staff are:
(1)
To prepare the accounts, together with all supporting schedules and notes thereto;
and submit them to the Chief Executive for onward delivery to the Auditor General.
(2)
To arrange and provide all documents in the order in which the Auditor General
requires them, and
(3)
To expeditiously and truly provide all answers, explanations, and proof that the
Auditor General may require for purposes of completing the audit.
2.5.3
Investigation
Special investigations may be ordered by the Chief Executive of the Council following a
request by the Chairperson of Council, or standing committee or the Local Governments
Public Accounts Committee. The Minister or RDC may order for special investigations
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where they deem it necessary. The IGG, or Auditor General may be requested to carry this
audit task or any other expert depending on the circumstances.
An investigation may be ordered into the management of the financial affairs of the Council
either to improve perceived areas of weaknesses, or to verify suspected malpractices.
The duties of accounts staff in such an investigation are:
(1) To render due and professional cooperation to the Investigator
(2) To honestly provide documentary evidence and explanations required by the
Investigator
(3) To ensure that all books of account are properly updated
(4) To prepare schedules, lists, computations and interim financial reports as the
Investigator may require
(5) To ensure that all information given to the Investigator is verified and reliable
(6) To ensure that records given to the Investigator are returned for safe custody, unless
officially directed by the Authority to be surrendered to the Investigator as exhibit.
In such a case the Investigator acknowledges receipt of each document taken away. The
signed evidence must be filed and kept safely for future reference.
2.5.4
Inspections
For purposes of ensuring implementation of national policies and adherence to performance
standards on the part of Local Governments, Ministries and other organs authorised by law are
required under the law to inspect, monitor and where necessary, offer technical advice, support
supervision and training within their respective sectors.
The duties of accounts staff in such inspections are:
(1) To render due and professional cooperation to the Inspector
(2) To honestly provide documentary evidence and explanations required by the Inspector
(3) To ensure that all books of account are properly updated and availed to the Inspector
when requested
(4) To prepare schedules, lists, computations and interim financial reports as the Inspector
may require
(5) To ensure that all information given to the Inspector is verified and reliable
(6) To ensure that records given to the Inspector are returned for safe custody, unless
officially directed by the Authority to be surrendered to the Inspector as exhibit.
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3.0
BUDGETING
3.1
INTRODUCTION
A Budget can be defined as an annual plan of a local government’s income from Councils
Revenue, government grants and all other revenue sources and how such total revenue will
be spent in accordance with objectives, needs and priorities. Budgets are monetary
quantifications of LG plans and as such, are derived from all the plans of a LG. Budgets
are therefore a sub-component of the planning process which specifically deals with turning
qualitative and quantitative plans in monetary terms.
3.2
THE LEGAL FRAMEWORK
The Legal Framework for LG budgets is based on the Constitution, Acts of Parliament and
regulations. These are briefly discussed below:
3.2.1
The Constitution
Article 190 of the Constitution specifies that “District Councils shall prepare
comprehensive and integrated development plans incorporating the plans of lower local
governments for submission to the National Planning Authority”.
3.2.2
The Local Governments Act
Local Governments budgetary powers are laid down in the Local Governments Act, Section
77 (1), which states that local governments shall have the right and obligation to formulate,
approve and execute their budgets and plans provided the budgets shall be balanced.
The Act further states that no appropriation of funds by a local government can be made
unless approved in a budget by its Council (the Local Governments Act, section 82,
subsection 1). Thus, the local government budget including explanatory notes constitutes
the decisive financial management tool as it forms the legal and operational basis for the
implementation of the policies set by Council. Without an approved budget or a vote on
account, the administration can neither collect revenue nor incur expenditure, and any
deviation from this rule may call for appropriate legal action by relevant stakeholders.
The local governments budgeting process should be seen as an integral part of the planning
process. The link between planning and budgeting is also stressed in the Local
Governments Act, which states that a local government budget shall always take into
account the approved three year development plan of that local government (section 77
(5)). In addition, the Act provides that the budget shall reflect National Priority Programme
Areas, and that significant deviations from priority areas may lead to appropriate actions by
the Minister (section 77, subsection 3).
3.2.3
The Budget Act, 2001
The Act regulates the budgetary procedure for a systematic and efficient budgeting process
in government.
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3.2.4
The Local Governments Financial and Accounting Regulations, 2007
The Local Governments Financial and Accounting Regulations, 2007 make up the principal
financial management framework for local governments. The LGFAR translates the Local
Governments Act, as far as financial management provisions are concerned, into
operational guidelines and provides the Chief Executives in local governments at all levels,
with detailed legal and regulatory instructions on most aspects of local government’s
financial management. The main regulations concerning local government budgets are
contained in Part III of LGFAR's 2007.
3.2.5
Compliance with National Priorities
This is a legal requirement as per Local Governments Act provision in section 78 subsections 2 and 3.
The overall planning framework for Uganda is currently the Poverty Eradication Action
Plan (PEAP) which sets out Governments national objectives and strategies for reducing
poverty. The Medium Term Expenditure Framework (MTEF) and supporting National
Budget Framework Paper process (NBFP) is a three year rolling planning system that
constitutes the link between the PEAP and budget allocations for implementation of the
various programs. Central government ensures that national priorities are reflected in local
government budgets through allocation and transfer of conditional grants to local
governments.
Consequently local governments must operate realistic budgeting through an integrated
three year budgeting and planning framework and also focus on intended results of
expenditure by setting objectives, targets and measuring performance.
3.2.6
Timing
The financial year of local governments runs from 1st July to 30th June. The planning and
budgeting cycle is continuous.
3.2.7
Balanced Budget
All local government budgets must be balanced. This is a legal requirement as per Local
Government Act, Section 77 sub-section one. It requires that local government expenditure
must not exceed the revenues.
3.2.8
Budget Desk and Duties of the Budget Desk
(1) Each local government council shall have a budget desk composed of the following
technical officers:
(a)
(b)
(c)
(d)
the Head of Finance;
the Planner;
the Statistician; and
the Population Officer
However, this composition may change when need arises with instructions issued by
the Minister:
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(2) Where some of the officers referred to under sub-section (1) are not in place, the Chief
Executive may assign any other technical officer whom he/she considers as a relevant
resource person to serve on the desk.
(2) The duties of the budget desk shall include:-
3.3
(a)
coordinating the departments to produce annual plans and budgets for
submission to the chief executive.
(b)
following up the budget cycle issued by the Minister and the chief executive
and be responsible for informing the executive committee and the council of
the progress of the budgeting process.
(c)
ensuring that the council departments produce realistic budget estimates and
development plans.
(d)
ensuring that planning is linked to the budgeting.
GENERAL BUDGET PRINCIPLES
The general principles of budget include the following:
(1) Estimates must reflect revenue which can be realized from anticipated conditions
and expenditure which is to be incurred under efficient financial management and
control.
(2) The estimates will be divided into two parts; the Recurrent Budget and Capital
Development Budget.
(3) The departmental heads are responsible for the execution of their estimates and are
to participate in the preparation of the budget and budget framework papers.
(4) Estimates are to be prepared in sufficient details showing revenue and expenditure
items, to permit proper monitoring and support explanation of variations and
adjustments.
(5) All estimates of revenue and expenditure are to be coded, organized and assigned in
accordance with programmes, sub-programmes and with responsibility at all levels.
(6) Budget framework papers, development plans, work plans and current years
approved estimates are to form the basis of the annual estimates of the ensuing year.
Prevailing factors and circumstances which are likely to affect future operations
must be taken into account when preparing the estimates.
(7) Expenditure programmes should show “employee costs”.
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(8) All amounts in the estimates shall be expressed in Uganda shillings.
(9) Revenue and Expenditure shall be itemized as far as possible and not shown by
block amounts; the detailed estimates shall show against each item of revenue and
expenditure as nearly as possible the amount expected to be collected or spent in the
year of estimate, together with the approved figure and the revised estimates for the
current year.
(10) Wherever the estimate is significantly different from the figure approved for the
current year, an explanation should be given in budget speech
3.4
THE BUDGET PROCESS
The budget process involves consultations and negotiations between the Council and
various relevant parties, compilation of planning and budgeting inputs from Lower Local
governments, preparation of the Budget Framework Paper, public hearings, the
prioritisation process, reading and approval of the next financial year budget and Budget
implementation and Evaluation. The Budget process shall start in September with
consultation between Local Governments and Central government. All Local Governments
must lay their budgets estimates before Council not later than the 15th day of June in
accordance with section 82 (4) of the Local Governments Act. After consideration by
committees, all local governments must approve their budgets by 31st August.
3.4.1
Preconditions for Successful Budgeting
Preconditions for successful budgeting include the following:
(1) The preparation process has to be consultative and participatory in order to ensure
ownership to both processes and the approved budget.
(2) A systematic process of prioritisation of programmes and expenditures, which is
based on informed choices, must take place.
(3) Planned outputs, activities, and expenditure allocations in the annual work-plan and
budget estimates must be realistic, and achievable.
(4) Realistic revenue forecasts.
(5) Sufficient time must be reserved for participation and dialogue between the relevant
stakeholders and for public hearings.
3.4.2
Key Elements of the Budget Process
The two main principles behind local government planning and budgeting system are:
(1) Realistic Budgeting through an integrated 3 – year budgeting and planning framework.
This involves:
(a)
Three year rolling medium term framework for planning and budgeting;
(b)
Preparation and updating of 3-year rolling development plans, which is fully
integrated with the budgeting process;
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(c)
Planning and budgeting must be carried out within expected revenues over the
medium term through the preparation of LGBFP.
and
(2)
Focusing on the intended results of expenditure:
(a) The objectives of expenditure should be clearly stated in the budget speech, and
measurable targets set.
(b) The achievement of service delivery and investment performance targets must be
linked to specific expenditures in the budget so that the efficiency of the expenditure
choices can be assessed and problems identified.
3.4.3
Stages of the Budgeting Process
The budget process for LG involves the following twelve main stages:
Process 1: Consultations with Central Government
Stage 1:
National Budget Conference
Process 2: Budget Preparation
Stage 2:
Proposal of Policy
Stage 3:
LG Budget Conference
Stage 4:
Costing of priorities and preparation of Draft BFP
Stage 5:
Review of costed priorities and approval of BFP
Process 3: Budget approval
Stage 6:
Budget presentation
Stage 7:
Budget scrutiny
Stage 8:
Budget debate and approval
Stage 9:
Publication and communication
Process 4: Budget Implementation
Stage10:
Implementation and Monitoring
Stage 11:
Budget Evaluation
Table BU 1 below shows the stages in the budget process, the activities carried out, the
responsible centre or organ(s) and the expected output from each stage. Since the Local
Government Annual Budget and the Local Government Budget Framework Paper are
separate documents the process shown is for the Annual Budget. It however shows the link
where the LGBFP comes in during the annual budget preparation. The Planning process is
The Local Governments Financial and Accounting Manual 2007
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reminiscent to the annual budget process. Details about the planning process in given in the
District Planning Guides and the Harmonized Participatory Planning guides for Lower
Local Governments
Table BU 1: Budget Preparation Process
The LGs Budget Process
Stage
Activity/event/step
Responsibility Centre
Stage1.
Consultations
with central
Government
National Budget Conference
Ministry of Finance
(C. G Agencies)
Stage 2
LG Regional BFP Workshop
Stage3
Proposal of
policy
(a) A Local government
must decide and agree on its
policies and activities of the
next financial year.
Stage 4
LG Budget
Conference
Stage5
Costing of
Priorities
Stage 6
Review of
costed
priorities
Stage 7
Budget
presentation
Stage8
Budget
scrutiny
(b) Budget Desk prepares
local government budget call
and circulates it to heads of
departments and Lower
Local Governments.
Holding of LG budget
conference
(a) Review of sect oral
performance and
identification of sect oral
priorities.
(b) Detailed costing of
activities done
(c) First draft BFP made
(d) Updating council’s
development plans
(a) Draft BFP approved by
Executive Committee
(b) Preparation of draft
budget and incorporating
adjustments. The budget
must balance, this means that
council’s programmes must
be prioritized to available
revenue.
The budget is presented by
the chairperson or designated
representative of the local
council to the council as a
bill for consideration by
Council.
On receipt of the proposed
budget estimates, council
will refer them to standing
committee for scrutiny and
recommendations for
approval.
Output
National priorities, resources & inter
sector allocations communicated to local
governments
Recurrent and development grants
ceilings communicated to local
governments, alongside changes to sector
policies and guidelines.
MoFPED, MoLG, LGFC
a) Revised Indicative Ceilings of RTB
and Line Ministries
and Contracts Committee communicated
to LGs
b) LGs given guidance on preparation of
LGBFP(Draft templates given)
a) Policies and activities for the next FY
The Executive Committee
of Council meet to discuss are proposed by the Executive
Committee
and agree on council
b) Indicative ceiling for departments
policies and Activities for
agreed by the Executive Committee for
next FY
issuance by the budget desks
Budget Desk with
Budget call circulars issued to
approval of Executive
department and LLGs to guide the
Committee
budget process
Stake Holders in the LG
Budget process
(Councillors, HoDs,
NGOs/CSOs, Opinion
Leaders, etc)
Heads of departments
Budget desk and Heads of
departments
Budget cost
Budget desk
Executive Committee
a) Review performance for previous year
b) Agree on priorities for next financial
year
c) Contribute inputs to the LGBFP
Sect oral performance revised and
priorities identified.
Detailed cost of activities.
Draft LGBFPs ready for review by DEC
Council’s development plants updated.
(a) LGBFP approved
(b) Draft budget reviewed by DEC
Presented by council
chairperson to full council
a) Budget presented for consideration and
referred to the respective standing
committees for scruitiny by 15th June.
b) The flexibility proposal is also
presented for consideration by Council
Standing committees
Recommendations for approval
The Local Governments Financial and Accounting Manual 2007
38
The LGs Budget Process
Stage
Activity/event/step
Responsibility Centre
Output
Stage 9
Budget debate
and approval
Standing committee’s
recommendations are
debated and budget approved
by 31st day of August each
FY.
Signing of the budget by the
Chairperson and Distribution
of the approval budget to all
interested stake holders.
Full council
Budget approval
Signed by Chairperson
and distributed by CE
Budget signed
Budget distributed.
Activity work plans are
drawn for first year for
implementing the budget
Heads of Departments
draw plans and Council
approves
Activity plans prepared
(a) Heads of department
carries out supervision
(b) Executive
Committee does the
monitoring and
Evaluation
(c) other councillors do
constituency monitoring
HoDs
Executive Committee
Councillors
Budget Monitoring and Evaluation
Stage 10
Publication
and
communicatio
n
Stage 11:
Budget
Implementati
on
Stage 12:
Budget
Monitoring
Budget estimates should be based on the realities on the ground for purposes of ensuring
that the variances between actual and estimates are minimal.
Each department or programme shall make estimates for the proceeding year based on the
anticipated level of activity. The departmental or programme estimates shall be
consolidated to produce the complete Local Council budget.
The Chairperson of the council shall, not later than the 15th day of June, cause to be
prepared and laid before the council estimates of revenue and expenditure of the council for
the next ensuing financial year for consideration and approval. Once approved, the
estimates shall constitute the complete financial programme of the administration for the
financial year.
The Chairperson of the Council shall sign the approved estimates on behalf of the Council.
3.5
THE BUDGET FRAMEWORK PAPER
3.5.1
Introduction
The Local Government Budget Framework Paper (LGBFP) is one of the three main tools
that enable integrated planning and budgeting in local governments. The LGBFP
articulates the local governments three year budget strategy and is an important decisionmaking tool for the whole local government which helps to focus the debate on spending
options in the local government. The LGBFP structure has been revised both to cater for
the new elements arising out of FDS and to enhance its effectiveness as a key decision
making instrument in the planning and budgeting process.
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3.5.2
Purpose of the LGBFP
The purpose of the LGBFP includes the following:
(1)
It gives a profile of the local government.
(2)
Shows previous financial year’s revenue performance against the revenue budget
estimates and revenue projections for the next three years.
(3)
Shows sector performance in previous financial years measured against set
performance targets.
(4)
Provides indicative allocations and sector objectives and performance targets for the
next three years.
(5)
Shows sector un-funded priorities and reallocations of funding.
(6)
Provides the draft annual workplan and budget estimates.
(7)
Provides information and monitoring tool for central government to ensure that
national priorities are being adhered to.
(8)
Overall the local government Budget Framework Paper if properly prepared and
used, provides the decision makers in the local government (Councillors) with the
information required to make the decisions that link up inputs and activities with
intended results as set out in the PEAP.
(9)
Guides Councillors through the prioritisation process during the budget conference.
3.5.3
LGBFP Key Players
Preparing the LGBFP is the most crucial stage of the budget process and the key players
involved is the budget desk. The other key players are the heads of department who are
charged with the responsibility of preparing department budget
3.5.4
Linkage between the LGBFP, the DDP, the Budget and the Annual Workplans
(1)
Prior to the production of the LGBFP, each local government will review and
update its Development Plan (DP) to cover and include all intended activities for the
financial year – whether funded by central government, bilateral donors or local
revenue.
(2)
Each activity will be numbered in the DP.
(3)
The DP should be resource constrained but highlight any priorities that cannot be
funded over the medium term.
(4)
All budgeting should be based on reference to the activity appearing in the DDP and
accordingly the LGBFP identification of activity shall refer to the DDP
activity/number.
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(5)
The LGBFP will be prepared based on activities.
(6)
Each activity will have its own work plan and budget – all bearing the reference
number in the DDP.
(7)
The LGBFP shall summarise the key elements and aggregate allocations and
outputs.
3.5.5
The Structure of LGBFP
The structure of LGBFP is as follows:
Executive summary;
Chapter 1 – Review of revenue performance and medium term revenue projections;
This chapter details the medium term revenue performance and projections for FYs
200x/200x+1, 200x+1/200x+2 (to December 200x+1), 200x+2/200x+3, 200x+3/200x+4
and 200x+4/200x+5. This should be presented in Form BU 2 shown below
Form BU 2: The Structure of LGBFP
Code
Source
200x/0x+1
Budget
‘000
A:
(11+14)
Realised
‘000
200x+1/0x+2
Performance
%
Realised/ Budget
Budget
‘000
Realised
‘000
(To Dec
200x+2)
200x+2/0x+3
Performa
nce %
Realised/
Budget
Project
ed
‘000
%
To
Total
200x+3/0x+4
Projected
‘000
%
To
Total
200x+4/0x+5
Project
ed
‘000
%
To
Total
Local
Revenue
Gov't Grants
B:
(13)
C:
(13)
Donor/
NGOs
Total
Chapter 2 - Sector performance;
This chapter presents an overview of the overall District expenditure against Budget,
Sectoral expenditure and output performance, major achievements, challenges, strategies to
address them.
Chapter 3 – Medium Term objectives priorities outputs and expenditure allocations;
Chapter 4 – Inter-sectoral Reallocations;
This Chapter presents the inter-sectoral reallocations allowed by Council under the Fiscal
Decentralization Strategy. This reallocation only applies to recurrent non-wage funds and
reallocation is only allowed into recurrent activities that are within PAF.
Chapter 5 – Draft Annual Work plan and budget.
The Local Governments Financial and Accounting Manual 2007
41
This chapter presents the annual work plans for all sectors for the Financial Year
3.5.6
Quality of LGBFP and linkage to National BFP
The Local Government Budget Committee is responsible for analysing and ensuring that
the contents of LGBFP are in line with the agreed rules of the game as set out initially by
LGBC, for example, the LGBFP must clearly demonstrate the link to the DDP, the budget
and annual workplan or else it will not be accepted.
The LGBC also reviews and collates overall issues in the LGBFP's for submission to
MoFPED to be incorporated in the National Budget Framework Paper and Budget.
3.6
THE BUDGET FORMAT
The estimates of expenditure will be based on programmes and sub programmes. The subprogrammes will be divided into items.
The budget format is shown in Form BU 3 below. Actual revenue/expenditure for the
previous year and projected revenue/expenditure for the current year are shown for
comparative purposes.
Form BU 3: The Budget Format
THE BUDGET FORMAT
For the year ………………………………………………
Previous year
Actual
Revenue/
Expenditure
Shs.
Current Year
Revenue/Expenditure
Estimates
Shs.
Programme
Code……………………………..
Sub-Programme
Code ……………………
Item
Particulars
Current Year
Estimated Actual
Revenue/Expenditure
Ensuing Year
Estimates Year
1
Projected
Revenue/Expendit
ure Year 2
Projected
Revenue/Expe
nditure Year 3
Shs.
Shs.
Shs.
Shs.
Revenue
Expenditure
3.7
REVENUE ESTIMATES
Revenue shall be divided into different sources and coded accordingly and separate items
shall be provided for Revenue collections in respect of the year of estimates and arrears
from the previous year;
The estimates of revenue will give the following information in respect of each source:
(a)
the actual revenue of the previous year;
(b)
the revenue estimates of the previous year;
(c)
the projected revenue collection for the current year;
(d)
the estimated amount to be collected next financial year
The Local Governments Financial and Accounting Manual 2007
42
(e)
the projected amounts over the subsequent two financial years following next
financial year collected
The estimates of revenue and Government transfers will be classified as follows
(003) Local revenue
Code Revenue Class
111
Taxes on income, profits and capital gains
112
Taxes on payroll and workforce
113
Taxes on Property
114
Taxes on goods and services
115
Taxes on international trade and transactions
116
Other taxes
141
Property income
142
Sale of goods and services
143
Fines, penalties and forfeits
145
Miscellaneous and unidentified revenue
(002) Central Government Sources (Grants)
Code Revenue Class
133
Grants from other general government units:
LG Conditional grants (133103 -current & 133203 – capital)
LG unconditional grants (133104 - current & 133204 – capital)
LG Equalisation grants (133105 – current & 133205 – capital)
Transfers from other government units (133106 – current & 133206 – capital)
Donor funds and NGO
(200) Other Domestic funding Sources
144
Voluntary transfers other than grants (NGOs - local)
(400) Multilateral Development Partners
132
Grants from International Organisations
(500) Bilateral Development Partners
131
Grants from foreign governments (Donor funds)
(650) Other foreign sources of funds
132
Grants from International Organisations
144
Voluntary transfers other than grants (NGOs - foreign)
The Local Governments Financial and Accounting Manual 2007
43
Note: The code in brackets represents a funding code source as per GOU Chart of
Accounts. The Revenue Estimates will be shown under appropriate codes, for collection
area, and Revenue source as indicated in the Chart of Accounts presented in Annex1
At a District level the collection areas are the Sub-Counties. At a City/Municipality the
collection areas are Divisions.
The Local Governments Financial and Accounting Manual 2007
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3.8
EXPENDITURE ESTIMATES
The detailed Recurrent Expenditure estimates shall be divided into departments, sections
and subsections as the case may be. The individual items of revenue and expenditure should
then be included in the section budgets which should then be consolidated upwards to the
department level and for the whole local government.
The detailed estimates of expenditure will be shown under the appropriate codes for the
programme, sub-programme and item as indicated in Annex1
The codes are applicable to all Councils and Administrative Units. The District/City
Municipality or Town Councils may apply the codes in accordance with their established
Departments. Likewise, the Sub-Counties/Divisions and Administrative units may apply
the codes in accordance with their established departments. A Sub-County for example
may have only two departments of Agriculture and Administration.
Expenditure estimates will be classified as per the following departments
Dept Department
Code
01
Administration
02
Finance
03
Statutory Bodies
04
Production
05
Health
06
Education
07
Works
08
Natural Resources
09
Community Based Services
10
Planning Unit
11
Internal Audit
3.8.1
Final Stage of Budget Process
The final stage of the budget preparation process is the finalisation of the work-plan and
budget estimates and the presentation to and approval by the Council.
The Local Governments Financial and Accounting Manual 2007
45
At the Council meeting for reading of the budget, the chairperson of Council or his/her
representative will present the budget and annual workplan to Council. The budget meeting
gives Councillors the opportunity to debate the budget proposals and the activities in the
annual workplan. If possible all outstanding issues on the budget should be resolved and
the budget approved. Once approved the budget becomes a legally binding document and
should be communicated to the public.
However, if Council is unable to resolve outstanding issues in regard to the budget
proposals, council should instead approve a vote on account and the budget issues referred
to the responsible standing committees for further scrutiny. The outstanding issues should
be resolved within the statutory deadline provided in the Local Governments financial
Regulations, 2007 and recommendations of the standing committee brought back to council
for approval.
It is important to note that the flexibility accorded to the local government during the
planning and budgeting process cannot be applied during budget implementation. There
will be no flexibility to re-allocate funds during the implementation process.
3.9
CASHFLOW BUDGET/ MANAGEMENT
3.9.1
Introduction
Cash is the most important financial resource in LGs and therefore requires good
management.
The lack of adequate planning for cashflow management may lead to:
(1)
Bottlenecks and administrative inefficiency;
(2)
Creation of domestic arrears;
(3)
Dissatisfaction among employees, the public, contractors and suppliers;
(4)
Under utilization of tangible (fixed) assets.
Cash flow management refers to systems, procedures and management decisions by which
managers ensure:
(1)
The LG has the sufficient cash to meet all approved expenditures;
(2)
A payment system according to the plan (cash budget);
(3)
Serious decline in cash balances is avoided.
3.9.2
Steps in Cash Management
(1)
The Head of Finance should produce the Councils quarterly cashflow budget (as in
form BU4) Annual cashflow budget (as in form BU 5) and cashflow analysis (as in
for BU 6).
(2)
Analyse the cash flow pattern. Examine all revenue and expenditure items and
determine their timing (i.e. when expected). For some items e.g. Central
government transfers and wages, it is easy to determine their timing while for other
The Local Governments Financial and Accounting Manual 2007
46
items (e.g. charges and fees) you may just divide by twelve. The analysis should be
carried out by the CFO based on input from HoDs. Each department should present
department cash outflow analysis. The CFO will then match the expected inflows
with the desired outflows of the HoDs by months and quarters.
It is very important that at this stage cash inflows and outflows are synchronized in
order to permit inflows to coincide with outflows; therefore the HoF may suggest
some re-arrangement in the proposed timing for this to happen. When this is done
the HoDs will have to adjust the timing of activities in their workplans.
(3)
The analysis should lead to the formulation of an annual cashflow budget. The
cashflow budget forms the basis for the actual management of cashflow during the
Financial Year. The cashflow budget should be drawn up immediately the annual
budget has been passed.
(4)
Routine cashflow management activities. These mainly include collecting all the
proposed revenues and making payments according to the proposed timing in the
cash budget.
(5)
Updating the quarterly and monthly cashflow projections in light of emerging
situations. This also involves setting quarterly commitment limits and the
preparation of monthly and quarterly disbursement schedules.
3.9.3
Cash Flow Budget
Note: The cashflow budget consists of cashflow projections for (1) recurrent items and (2)
development items month by month (and quarter by quarter) throughout the financial year.
The LG cashflow budget should reflect a positive cash balance for each month of the year.
The desired cash balance should be adequate to handle unexpected items should they occur.
The total amounts per cash budget should be consistent with the annual budget.
The cashflow budget will be implemented successfully if management has put in place
procedures for:
(1)
Collecting all projected income as promptly as possible;
(2)
Monitoring revenue arrears and taking action to recover outstanding amounts;
(3)
Managing payments within the projected amounts, work plan and an agreed policy on
payment periods;
(4)
Avoiding over-commitments;
(5) Reviewing monthly cashflow budgets in light of new information.
3.9.4 Action to be taken when Cash Balances are running low
Avoiding over-commitments is very important and is achieved through a commitment
control system which ensures that commitments are not made in excess of cash inflows
projected for the period (quarter or month). Under new Financial Management systems the
central government will be setting periodic cash limits (for grant financed activities) which
The Local Governments Financial and Accounting Manual 2007
47
local governments will not be allowed to exceed in commitments. LGs need to create
commitment limits for local revenue financed activities.
In cases where cashflow balances are inadvertently run down due to unforeseen reasons,
management should consider:
(1)
Reviewing non-essential services funding;
(2)
Suspending recruitment;
(3)
Suspending non urgent purchases e.g. of machinery;
(4)
Freezing on construction projects;
(5)
Review of the budget (to remove or postpone some items).
3.9.5
Cash Flow Performance Statement
The HoF has to prepare a cashflow performance statement every month showing the
sources and amounts of cash inflows and outflows, and the cash balance against the annual
cashflow budget to date (see cashflow performance statement format below). On the basis
of past performance and new information (e.g. from MoFPED, revise the cashflow budget
for the remaining quarters and month (see quarterly cashflow budget below) should be
revised. This should be discussed and agreed by the management team.
The Local Governments Financial and Accounting Manual 2007
48
Form BU 4: Quarterly Cash flow Budget
QUARTERLY CASH FLOW BUDGET
Local Government:
Item
Vote:
Annual
Budget
Financial Year:
Quarter:
Past Performance
Cash
%
Cash flow
Quarter …Revised
Ann. CF
% Budget
Budget
Month
Month
Month
Revised
%
1
2
3
Total
Budget
Flow To
Budget
in Last
in Last
for
Date
to date
Quarter
Quarter
Quarter
CASH INFLOWS
Taxation
Sales of goods and
services
Monthly Grants Release
(RTS)
Quarterly Grant Releases
(DTS)
Donor Funds
Interest received
Sale of assets
Other receipts
TOTAL Inflows
CASH OUTFLOWS
Employee costs
Goods and services
consumed
Interest expense
The Local Governments Financial and Accounting Manual 2007
49
QUARTERLY CASH FLOW BUDGET
Local Government:
Item
Vote:
Annual
Budget
Financial Year:
Quarter:
Past Performance
Quarter …Revised
Ann. CF
Cash
%
Cash flow
% Budget
Budget
Month
Month
Month
Revised
%
Flow To
Budget
in Last
in Last
for
1
2
3
Total
Budget
Date
to date
Quarter
Quarter
Quarter
Subsidies
Grants paid
Social benefits
Other expenses
Net Advances paid
Domestic arrears paid
during the year
Pension Arrears paid
during the Year
Extraordinary items
Total payments for
operating activities
Net cash
inflows/(outflows) from
operating activities
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase of property,
plant and equipments
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50
QUARTERLY CASH FLOW BUDGET
Local Government:
Item
Vote:
Annual
Budget
Financial Year:
Quarter:
Past Performance
Quarter …Revised
Ann. CF
Cash
%
Cash flow
% Budget
Budget
Month
Month
Month
Revised
%
Flow To
Budget
in Last
in Last
for
1
2
3
Total
Budget
Date
to date
Quarter
Quarter
Quarter
Proceeds from sale of
property, plant and
equipments
Purchase of investments
Proceeds from sale of
investments
Purchase of investment
properties
Proceeds from sale of
investment properties
Net cash
inflows/(outflows) from
investing activities
CASH FLOWS FROM
FINANCING
ACTIVITIES
Proceeds from external
borrowings
Repayments of external
borrowings
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51
QUARTERLY CASH FLOW BUDGET
Local Government:
Item
Vote:
Annual
Budget
Financial Year:
Quarter:
Past Performance
Quarter …Revised
Ann. CF
Cash
%
Cash flow
% Budget
Budget
Month
Month
Month
Revised
%
Flow To
Budget
in Last
in Last
for
1
2
3
Total
Budget
Date
to date
Quarter
Quarter
Quarter
Proceeds from other
domestic borrowings
Repayments of other
domestic borrowings
Net cash flows from
financing activities
Net increase (decrease)
in cash and cash
equivalents
Cash at beginning of
period
Cash at end of period
The Local Governments Financial and Accounting Manual 2007
52
Form BU 5: Annual Cash flow Budget
ANNUAL CASH FLOW BUDGET
FY:
Local Government:
Item
BUDGET
1. Quarter
July
Aug
Sept
2. Quarter
Total
Oct
Nov
Dec
3. Quarter
Total
Jan
Feb
March
4. Quarter
Total
April
May
June
Total
CASH INFLOWS
Taxation
Sales
of
goods
and
services
Monthly Grants Release
(RTS)
Quarterly Grant Releases
(DTS)
Donor Funds
Interest received
Sale of assets
Other receipts
TOTAL Inflows
CASH OUTFLOWS
Employee costs
Goods
and
services
consumed
Interest expense
Subsidies
Grants paid
Social benefits
Other expenses
The Local Governments Financial and Accounting Manual 2007
53
ANNUAL CASH FLOW BUDGET
FY:
Local Government:
Item
BUDGET
1. Quarter
July
Aug
Sept
2. Quarter
Total
Oct
Nov
Dec
3. Quarter
Total
Jan
Feb
March
4. Quarter
Total
April
May
June
Total
Net Advances paid
Domestic
arrears
paid
during the year
Pension
Arrears
paid
during the Year
Extraordinary items
Total
payments
for
operating activities
Net
cash
inflows/(outflows) from
operating activities
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase
of
property,
plant and equipments
Proceeds from sale of
property,
plant
and
equipments
Purchase of investments
Proceeds from sale of
investments
Purchase of investment
The Local Governments Financial and Accounting Manual 2007
54
ANNUAL CASH FLOW BUDGET
FY:
Local Government:
Item
BUDGET
1. Quarter
July
Aug
Sept
2. Quarter
Total
Oct
Nov
Dec
3. Quarter
Total
Jan
Feb
March
4. Quarter
Total
April
May
June
Total
properties
Proceeds from sale of
investment properties
Net
cash
inflows/(outflows) from
investing activities
CASH FLOWS FROM
FINANCING
ACTIVITIES
Proceeds from external
borrowings
Repayments of external
borrowings
Proceeds
from
other
domestic borrowings
Repayments
of
other
domestic borrowings
Net cash flows from
financing activities
Net increase (decrease)
in
cash
and
cash
equivalents
Cash at beginning of
The Local Governments Financial and Accounting Manual 2007
55
ANNUAL CASH FLOW BUDGET
FY:
Local Government:
Item
BUDGET
1. Quarter
July
Aug
Sept
2. Quarter
Total
Oct
Nov
Dec
3. Quarter
Total
Jan
Feb
March
4. Quarter
Total
April
May
June
Total
period
Cash at end of period
The Local Governments Financial and Accounting Manual 2007
56
Form BU 6: Cash flow Analysis
CASH FLOW ANALYSIS
FY:
Local Government:
Item
1. Quarter
July
Aug
2. Quarter
Sept
Oct
Nov
3. Quarter
Dec
Jan
Feb
4. Quarter
March
April
May
June
CASH INFLOWS
Taxation
Sales of goods and services
Monthly Grants Releases
(RTS)
Quarterly Grant Releases
(DTS)
Donor Funds
Interest received
Sale of assets
Other receipts
TOTAL Inflows
CASH OUTFLOWS
Recurrent Payments
Employee cost
Suppliers
Interest paid
Pensions
Other payments
Total Recurrent Outflows
Development Payments
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57
CASH FLOW ANALYSIS
FY:
Local Government:
Item
1. Quarter
July
Aug
2. Quarter
Sept
Oct
Nov
3. Quarter
Dec
Jan
Feb
4. Quarter
March
April
May
June
Purchase of land & other
capital assets
Contracts
Other
Total Development Outflows
Total Outflows
GRAND TOTAL IN
GRAND TOTAL OUT
LIQUIDITY BALANCE
The Local Governments Financial and Accounting Manual 2007
58
3.10
REVISIONS OF ESTIMATES
3.11
Insufficient provisions
No expenditure for which there is either insufficient or no provision in the Approved
Estimates may be incurred until a Supplementary Estimate has been approved.
No
expenditure should be incurred on a service which cannot be completed with the funds
authorized for it within a Financial Year; nor shall any commitment involving a
Supplementary Estimate be entered into until such Supplementary Estimate has been
approved, by the full Council.
3.12
Revision of Estimates
(1)
A Revision of Estimates may fall into one of the following categories⎯
(a) virement - reallocation of approved funds between votes (items) under the
same sub-program, but not including any transfer between "employee costs"
and "Other Charges";
(b) re-allocation - re-allocation of approved funds between “employee costs” and
“Other Charges” and between items under different programmes of
expenditure. These require prior approval of Executive Committee;
(c) supplementary estimates - additional funds required for Recurrent
Expenditure or Capital Development purposes which involve an increase in the
total approved Estimated Expenditure for the year.
(2) A virement may be approved by the Chief Executive and subsequently reported to
Executive Committee but re-allocation will require prior approval of the Executive
Committee and clear savings shall be declared by the Chief Executive before reallocation in case of personal emoluments.
(3) Supplementary estimates referred to under sub-section (1) are
subject to strict
conditions and require prior approval of the Council.
(4) Details of the procedures for revising of estimates shall be set out in the Schedule on
Accounting under these Regulations
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59
3.13
Virement Warrants
(1) An Application for Virement shall be made by the vote controller concerned to the
Chief Executive showing the amount(s) to be transferred and the votes under the same
programme of expenditure affected but Virement should not be used⎯
(a) to transfer funds between "Employee Costs" and "Other Charges";
(b) to create a new post or alter an approved salary scale;
(c) to implement any new policy or principle, or materially alter the pattern of
expenditure as approved by Council in the Estimates.
(2) If neither the Chief Executive nor Head of Finance has any objection, the Chief
Executive shall issue a Virement Warrant to the vote controller concerned, with copies
to the Head of Finance, Head of Internal Audit and Auditor General.
(3) In case of District Hospitals the Hospital or Medical Superintendent shall be authorized
by the Finance or Management Committee of the hospital to issue a Virement Warrant
and send a copy to the Chief Executive.
3.14
Reallocation Warrants
(1) An application for Re-allocation shall be made by the vote controller concerned to the
Chief Executive showing the amount(s) to be transferred from one sub-program to
another and the votes affected but Re-allocation should not be used⎯
(a) to create a new post or alter an approved salary scale;
(b) to implement any new policy or principle, or materially alter the pattern of
expenditure as approved by the Local Government Council in the Estimates.
(2) The Chief Executive, after consultation with the Head of Finance, shall submit the
application for Re-allocation to the Executive Committee where the head of the
department
and Chairpersons of Standing Committees concerned shall attend to
explain or clarify the reasons for the Re-allocation.
(3) If the Executive Committee approves the Re-allocation, the Chief Executive shall issue
a Reallocation Warrant to the Vote Controllers concerned, with copies to the Head of
Finance, Head of Internal Audit and Auditor General.
The Local Governments Financial and Accounting Manual 2007
60
3.15
Supplementary Estimates
(1) If new or additional funds are required over and above the approved budgetary
provisions, which cannot be met by Virement or Reallocation, the vote controllers
concerned shall apply to the Chief Executive for a Supplementary Provision. However,
supplementary budget may require reduction in originally budget approved estimates.
(2) An application for Supplementary Estimates must quote savings from another vote, or
identify additional revenue or external funds which shall cover the cost of the
additional requirements.
(3) After consultation with the Head of Finance, the Chief Executive shall submit the
application for Supplementary Estimates to the Executive Committee where the vote
controller and Standing Committees concerned shall attend to explain or clarify the
reasons for the Supplementary Estimates and after scrutinising the application, the
Executive Committee shall make recommendations and submit the application for
Supplementary Estimates to the Council for approval.
(4) On approval by the Council the Chief Executive shall issue a Supplementary Provision
Warrant to the vote controllers concerned with copies to the Head of Finance, Head of
Internal Audit and Auditor General.
3.16
Amendment to Vote Book
(1) When a Virement, Reallocation or Supplementary Estimates Warrant has been
issued the Vote Book must be amended to reflect the corresponding increases and
decreases, and the Approved Estimates are thereby formally amended.
(2) Re-allocation of Donor funds shall not be effected except with the agreement of the
Donor concerned.
3.17
Unauthorised Excesses
(1) On the final adjustment of accounts at the end of the financial year, the Schedules and
explanations of Vote Controllers shall be submitted by the Accounting Officer to the
Auditor General.
(2) Where there is unauthorised excess expenditure, the Vote Controllers must then show
The Local Governments Financial and Accounting Manual 2007
61
cause to the Executive Committee why they should not be surcharged with any excess
in respect of their departments within 30 days of notification by the Head of Finance
and the schedules and explanations of Vote Controllers shall be submitted by the
Accounting Officer to the Auditor-General along with annual accounts for audit, within
the statutory period.
(3) Unauthorised excesses may be surcharged against the officers responsible in
accordance with the provisions relating to losses of public moneys, stores and other
assets.
Reallocations and supplementary provisions requires the approval of the Executive
Committee or Councils respectively, in accordance with Financial Regulation and on
approval of the supplementary estimates or Reallocations, the Chief Executive shall issue a
warrant as presented in Form BU 7 below, to the head of the department concerned. The
supplementary estimates/reallocation warrant shows details of the approved supplementary
provision/reallocations and the revised estimates.
Form BU 7: Supplementary Estimates and Reallocation Warrant
XXXXX COUNCIL
SUPPLEMENTARY ESTIMATES/REALLOCATION WARRANT*
WARRANT NO……………………………………..OF FINANCIAL YEAR ……
The Head of …………………………………………Department.
Sir,
I am directed to inform you that in accordance with Regulation and of the Financial and
Accounting Regulations, 2007 the Council/Executive Committee* has approved
supplementary estimates/reallocations* that are considered necessary. The authority of the
Council/Executive Committee is given under minute No……………………………...
Details in respect of each item are as follows:
Department
/Section
Original
Approval
Estimate
Approved Supplementary
Provision of Reallocation
Revised Estimates
Reallocation from
Department
/section
Item
Shs
Shs
Shs
Amount
Shs
Shs
Original Head of Department
Chief Executive……………..
Duplicate – Auditor General
Date…………………………
Triplicate – HIA
Quadruplicate – HoF
* Delete as necessary
The Local Governments Financial and Accounting Manual 2007
62
4.0 REVENUE
4.1
AUTHORITY FOR REVENUE COLLECTION
Local Government’s revenue is regulated by (Include provision of the constitution) Section
80 of the LGA and the Fifth Schedule to the local Governments Act. Each Local
Government Council shall collect revenue in accordance with the provisions of the
Schedule. The collection of revenue shall be carried out by authorised persons in
accordance with Part IV of the Financial and Accounting Regulations. The Revenue
collectors shall issue official receipts tickets or licenses in serial number order.
In the Urban Councils, revenue shall be collected by the Division Councils, which shall
retain fifty percent of all the revenue they collect in their areas of jurisdiction and remit
fifty percent to the City or Municipal Council.
For the District Council, revenue shall be collected by the Sub-county Councils, which shall
retain sixty five per-cent, or any other higher percentage as the District Council may
approve, and remit the remaining percentage to the District
4.1.2
Local Government’s Revenue Sources
Local Government Councils have the following revenue sources:
(1) Local Revenue: A Council may levy, charge and collect fees, revenue, including
Revenue registration and licensing fees or any other revenue referred to in the fifth
schedule to the Act.
(2) Grants from Central Government: A Council may access grants from Government.
Governments transfers may be Unconditional, Conditional, or Equalisation Grants
(3) Donor and NGO funds: A Council may also access Donor funds, which may be
unconditional or conditional depending on terms of the Donor.
4.2
DUTIES OF REVENUE COLLECTOR AND CASHIER
It is the duty of every revenue collector and cashier to:
(1) give an official receipt, ticket, or licence, as the case may be, for all money paid;
including charges for services, which for such services shall be part of the policy of
Line Ministry including School Fees and Medical Service user charges;
(2) ensure that all revenue and other receipts to be collected are promptly collected and
banked and brought to account;
(3) keep a Cash Book as prescribed in this manual , which shall be in electronic or
manual form
(4) carefully safeguard and control the Cash Book and all stocks of receipt books, tickets
and licences entrusted to him or her, both used and unused, and to produce these for
official inspection and audit when required;
The Local Governments Financial and Accounting Manual 2007
63
When a revenue collector hands over to another officer, both officers shall sign a handingover certificate in the prescribed form, showing in details of all cash, receipt books, used
and unused tickets and licence stocks, passing from one to the other.
4.3
LOCAL REVENUE, ASSESSMENT AND ENUMERATION
The CE should carry out proper assessment of the council’s revenue regularly. In order for
proper assessment to be carried out, the process should starts with the enumeration exercise
conducted by a team of enumerators who should record all the sources of income for each
individual tax payer in the LLG.
4.3.1
Basis and Methods of Assessment
Tax assessment is supposed to be carried out by a Tax Assessment Committee which every
district council is required to establish. The nature of tax payable determines the basis and
method of assessment by the TAC. The Committee is charged with the responsibility of
making assessments for the amount to be paid by eligible persons residing in the council.
However, as for property tax, the rates are fixed by a similar committee appointed by an
Urban Council but applying different methods of assessment for the rates payable based on
valuations of land, buildings, etc. Fees, fines, charges and rents payable are determined on
the basis of established rates set by the Council.
Some taxes, fees or charges are payable every financial year and the assessment on the
taxpayer’s income should likewise be carried out annually. Others are payable on a daily or
monthly basis and assessment is done on spot daily or monthly (examples are market dues).
For such revenues the procedure does not normally involve the issuance of assessment
certificate because the rate is fixed and well known by the stakeholders. After assessment,
the TAC issues a certificate of assessment to the prospective taxpayer indicating among
others the tax liability. The certificate should be produced before the tax collector at the
time of paying the tax.
4.4
REGISTRATION OF TAXPAYER
The Head of Finance should provide assessment forms to be used by assessors to register
the details of assessment for the taxpayer.
The assessors should keep records of
assessment for future reference or in situations of disputes, errors, etc.
Assessment forms contain details of taxpayers e.g. name of the individual or business of
income, type of business, amount of total income, location and the like. Assessment folders
and files are used to keep all assessment forms.
4.5
LOCAL REVENUE COLLECTION AND BANKING
(1) Revenue shall be collected by a qualified and competent officer who is in an
established post, and is so authorised in writing by the Chief Executive, on written
recommendation of the Head of Finance.
(2) The Council shall raise a demand note or an assessment form to each individual
Revenue payer as per Council’s approved rates.
(3) Before receiving any monies, the Revenue Collector shall check against records of
approved rates and shall ask the payer to produce a copy of the Council’s demand
The Local Governments Financial and Accounting Manual 2007
64
note, or certificate of assessment so as to determine the particulars and amounts of
revenue receivable.
(4) The demand note, or certificate of assessment, shall be pre-printed, pre-numbered,
and prepared in triplicate. The copies shall be distributed as follows:
(a) Original served to the Revenue payer (assessed)
(b) Duplicate copy shall be sent to the Collector, and
(c) Triplicate copy to remain in the book retained by the assessor.
The demand note/certificate of assessment shall be in format as in Form RE 8 below;
Form RE 8: General Demand Note/ Certificate of Assessment
XXXX COUNCIL
*DEMAND NOTE/CERTIFICATE OF ASSESSMENT
DATE………………….
Assessment Number……………………………..
Period………………………From………………………..To……………………….
Name of Assessee…………………………………………………………………….
Address of the Assessee………………………………………………………………
Purpose ……………………………………………………………………………….
Revenue Code…………………………………………………………………………
Arrears brought forward………………………………………………………………………………
Amount Shs
Amount Assessed……………………………………………………………………………………..
Adjustments made to Account………………………………………………………………………
Less: Paid……………………………………………………………………………………………..
Balance carried forward/due………………………………………………………………………….
Signature of Assessor……………………………………… Date…………………………………
Official Stamp
Signature of Revenue payer………………………………
Note: The duplicate copy should be sent to the Collector, by the Assessor.
Total
*Delete as appropriate
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4.5.1
Receiving Revenue
The Revenue Collector must immediately, in the presence of the payer, count the cash and
issue an acknowledgement receipt for the revenue collected.
Carbon paper written or carbonated receipts, and where feasible cheque like counter foils or
electronic printed receipts shall be used, so as to retain the actual, true and original data on
the copies.
Where there is more than one collector, each collector shall issue a Revenue collector
receipt to the payer showing the following:
(1)
Date
(2)
Name of Revenue
(3)
Receipt No.
(4)
Amount
(5)
Payer
On the basis of the collection cashbooks, the main Cashier shall issue one control receipt
for book keeping purposes showing the following:
(1)
Station code
(2)
Cahier’s name
(3)
Total amount
(4)
Period of collection
It is this control receipt that shall be used for bookkeeping entries.
At the end of each month or more regularly the collectors’ cashbooks shall be reconciled
with the Main Cashier’s cashbook to ascertain the accuracy of both records.
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The main Cashier’s receipt shall be presented as in Form RE 9 below.
Form RE 9: Cashier’s Receipt
XXXXCOUNCIL
REVENUE RECEIPT
Receipt Number…………………..
Assessment Number…………………….
Date……………………………….
NAME OF PAYER……………………………………………………………………………
ADDRESS………………………………………………………………………………………
AMOUNT RECEIVED (In words)...…………………………………………………………...
…………………………………………………………………………………………………...
PURPOSE………………………………………………………………………………………..
CASH SHS…………………………..
CHEQUE NO…………………
Shs………………….. BALANCE Shs………….
REVENUE CODE……………………………………………………………………………….
Signature and stamp of Cashier/Revenue Collector……………………………………………..
Note: All particulars must be completed in full.
4.5.2
Receipts, Tickets and Licences
(1)
The receipts, tickets and licences, shall be issued in numerical sequence both
as regards books, rolls, or set. The individual receipt books should be
completed before new ones are issue.
(2)
The receipts shall be serially numbered, and printed in triplicate.
(3)
The receipts shall be distributed as follows:
(a)
Original to payer;
(b)
Duplicate to be attached to copy of demand note and the relevant
revenue registers, for processing in the Accounts Department.
(c)
The triplicate copy shall be retained in the book, for audit purpose.
(4)
No alterations shall be made on any leaf, whether original, duplicate or
triplicate of a receipt being issued. Where there is need to make alterations
the receipt shall be cancelled and the person cancelling it shall write on the
face of that receipt his/her names, designation, signature, and the word
“Cancelled.” All three copies of a cancelled receipt must remain in the
receipt book.
(5)
All receipts must be written in indelible black or blue ink.
(6)
The Revenue Collector shall balance cash collected, against the duplicate
receipts or the counter foils
The Revenue Collector shall arrange the cash according to denominations, and prepare a
daily cash summary report, which shall be presented as in Form RE 10 below.
The Local Governments Financial and Accounting Manual 2007
67
Form RE 10: Daily Cash Summary Report
XXXX COUNCIL
DAILY CASH SUMMARY REPORT
Date………………….
Receipt Nos………………………… From…………………. To……………………………
DENOMINATION
COINS
NOTES
AMOUNTS (TOTALS)
Shs
Shs
Shs
Shs
50,000
…..
20,000
…..
10,000
…..
5,000
…..
1,000
500
…..
200
…..
100
…..
50
…..
20
…..
10
…..
5
…..
2
…..
1
Prepared by…………………………………………………
Total Cash Currency
Checked by………………………………………………….
Add:
Date banked…………………………………………………
*Value of Cheques
-------------------------
Total cash count
===============
At the back of the daily summary report, the Revenue Collector shall give full details of the
cheques/payment instructions received, which shall include the following:
Date, Cheque No/payment instruction No., Payer, Payer’s Bankers, Amount and the
Receipt Number.
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4.5.3
Control of Receipt Books and Receipts
Registers shall be maintained for printed, procured, and issued receipts. The storekeeper
shall only issue receipts on presentation of the used receipt books. In a case there are subcashiers, they shall requisition for the receipt books from the main cashier on presentation
of the used receipt books. A requisition for a new receipt book shall be approved by the
Head of Finance.
4.5.4
Safe-keeping and Banking the Revenue Receipts
(1)
At the beginning of the following working day the cash shall be re-verified for
banking by an officer authorised by the Head of Finance. This person shall
not be the Revenue Collector/Cashier.
(2)
Cash shall be banked promptly and intact, on the General Fund Account (321106 Collection Accounts) of the District, City, Municipality, and Town Councils. Cash
shall be banked on Collection Account at Sub-county and Division levels. Separate
bank pay-in slips shall be used for banking cash and cheques.
(3)
The format of the bank pay-in-slip will be similar to that designed by the Council’s
Bankers.
(4)
Deposit into bank is effected by completing bank pay-in-slips in triplicate. Bank
pay-in-slips may however be prepared in four copies as an additional step to
strengthen the controls if considered appropriate by the Council.
a) The original and duplicate copies to be retained by the bank;
b) The triplicate to be attached to Revenue Registers for accounting purposes;
c) The quadruplicate to be left in the bank pay-in-slip book, for audit purposes.
(5)
The duplicate copy in case of quadruplicate copies shall be collected from the bank
together with the bank statements by a person authorised and designed by the Head
of Finance. It will be used for reconciliation purposes.
(6)
The bank pay-in slip will be distributed as follows:
a) the top copy is retained by the bank
b) the duplicate is kept by the cashier/revenue collector for later handover to the Head
of Finance (Revenue Control Cashier).
c) the triplicate is left in the paying-in book, or filed by the Revenue Collector/Cashier
(7)
Where the use of cheques is permitted, revenue collectors shall, when issuing
receipts, indicate thereon whether payment is made in cash or by cheque and in the
case of a cheque the cheque number shall be written on the receipt and the receipt
number on the back of the cheque and on the bank paying-in slip, which shall
indicate the drawer’s bank, and address in Uganda.
(8)
All cheques must be crossed “Credit Account……. Council” and stamped or
marked on the back with the identity of the revenue collector or receiving
department in or to identify any subsequent return cheques.
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69
(9)
An unexplained cash surplus shall be promptly receipted in the name of the revenue
collector and accounted for under “Miscellaneous Income”; at no time should
personal officers money be mixed with public funds and if mixed it can only be
refunded after appropriate explanations have been given to the Head of Internal
Audit.
(10)
Unexplained cash surplus shall include any cash that cannot be accounted for by the
official documents where revenue or funds are recorded.
(11)
An unexplained cash deficiency shall be made good by the revenue collector but
where the cause of the loss outside the revenue collector’s control, such as robbery
or theft, losses procedure shall be carried out in accordance with these Regulations.
For that purpose, all Local Governments administration shall insure all cash in
transit and on premises and the Insurance Company where applicable shall be
informed of any loss.
(12)
In every location where cash is handled a safe must be provided and money-in use
and in transit be protected by the use of a lockable Cash Box and where extra
security is required and armed escort shall be provided.
(13)
The protection of Local Government funds is the responsibility of the Head of
Finance, and where necessary he or she shall consult the Chief Executive.
(14)
The insurance cover shall be paid for in accordance with the requirement of these
Regulations.
(15)
All funds of Local Government shall be banked promptly where banking facilities
exist and Health Units and Primary Schools should be supplied with Cash Boxes,
where it would be too costly to supply Safes.
(16)
Where an officer holding the key to an Administration safe or cash box hands over
the key to another officer, the contents of the safe or cash box shall be checked by
that officer and a handing-over certificate completed and any discrepancy by that
officer reported to the Head of Finance and the Head of Internal Audit.
(17)
The duplicate and triplicate keys, if any, of any safe or cash-box must be enclosed in
a separate sealed envelope with the description and details marked on the outside
and handed over to the Head of Finance for safe-keeping and the Head of Finance
shall keep a register of all deposits and withdrawals of keys.
(18)
The loss of the key of any safe, strong-room or cash –box, or any other equipment,
shall be reported immediately to the Head of Finance and Head of Internal Audit
and the officer’s immediate superior with full explanation of the loss and any other
key-holders must also be informed immediately.
(19)
The duplicate key shall be obtained only to open the container for removal and
verification of the contents and the container may not thereafter be used until the
lock has been altered and new keys provided.
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(20)
The cost of altering or changing a lock and providing new keys may be charged to
the officer responsible for the loss and shall also be held responsible for the loss of
the contents of the container if the loss of the key is caused through negligence.
(21)
In the event of a key-holder having any suspicion that the keys of a strong-room,
safe or cash-box have been exposed to copying, or the locks interfered with, he or
she shall take action as provided under the Local Government Financial and
Accounting Regulations, 2007.
(22)
When a lock is altered under Regulation100, the new duplicate key shall be kept as
provide by this Regulation and arrangements shall be made for the destruction of the
old duplicate key.
(23)
Transfer of safes and cash-boxes between departments and other locations shall be
approved by the Head of Finance.
(24)
Every officer in charge of a safe or cash-box shall check the contents daily and
report any discrepancy to the Head of Finance and the Head of Internal Audit .
(25)
Documents or other articles deposited for safe custody shall be recorded in a register
kept for the purpose, and a receipt issued and shall only be withdrawn on the written
demand of the depositor or other authorized person, on the production of the
original receipt and the return of the documents, or articles shall be acknowledged
by the receiver by signing the register.
(26)
Discharge of the revenue collector is effected by the cashier at the main Treasury or
sub-office receiving the cash paid in or the accounting copies of the bank paying-in
slips and the Cashier shall sign the revenue collector’s Cash Book and issue a
receipt for the total amount and relevant documents which must be carefully filed
and retained by the revenue collector for inspection and audit purposes.
(27)
Banking/Handing-over of Revenue
(a) No payments shall be made out of revenue, which must be banked or handed
over intact.
(b) The Revenue Collector/Cashier may bank his or her takings direct, or hand them
over to the main cashier. Whichever methods are used must be agreed upon with
the Revenue Collector and thereafter adhered to.
(c) The daily or period total for banking/handover must be clearly shown to be
banked/handed over in whole No. cheques/cash sub-situation shall be made.
4.5.5
Revenue Accountable Stationery
(1)
The details of procedures for the control of printing, storage and issue of all
accountable stationery documents including receipt books, tickets and licence forms
are set out in the schedule to these Regulations.
(2)
The base stocks at Council headquarters shall be recorded in the Register of
Accountable Stationery and their issue to departments, sub-offices and chief made
against correctly completed requisitions.
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71
(3)
Issues shall be accompanied by a delivery note in duplicate. Any officer to whom
receipt books, tickets and licence forms are issued shall check these immediately
against the delivery note and if correct he or she shall sign the duplicate note and
return it to the issuing officer while the original is filled for inspection and audit
purposes.
(4)
Officers in charge of sub-stocks are responsible for their safe custody and
subsequent reissue to revenue collection by means of a subsidiary Register of
Receipt Books, and Revenue Collectors shall sign the register upon issue.
(5)
All receipt books, tickets and licence forms, shall be safeguarded from theft or
misuse, and must be securely locked up all the time and be issued in serial number
order to those using them.
(6)
Receipt books, tickets and licence forms shall not be transferred between
departments and revenue collection points without the consent of the Head of
Finance.
4.6
REVENUE RECORDS
Each Revenue Collector shall keep the following records:
(1)
a ticket/receipt register showing:
(a)
all tickets/receipts issued;
(b)
numbers of tickets/receipts of each denomination sold/issued each day;
(2)
a cash register
(3)
a file or binder containing copies of all revenue assessment forms or register
showing the following:
(a)
the names of all Revenue payers;
(b)
their annual Revenue assessment including permanent or
exemption.
(c)
the date on which they have paid their revenue and serial number of the
ticket issued to them, or the date and number of any exemption ticket issued
to them; and
temporary
(4)
a serial numbers register (copy book showing numerically the number of each ticket
issued and the Revenue payer’s name.
4.6.1
Revenue receipts
(1) The prescribed official triplicate receipt book shall be used in every situation except
where the Head of Finance authorises the use of some other form, or where
official tickets or licences are used.
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72
(2)
Receipts shall be completed in indelible pencil or blue or black ballpoint pen, and
carbon paper (double-sided if available) shall be used to make the duplicates and
triplicates.
(3)
The originals shall be delivered to the payee by the receipting officer and the
duplicates shall be used to support the accounting entries and the triplicates retained
in the book.
(4)
Each receipt shall be signed by the receipting officer and facsimile signature stamps
must not be used but if possible carbonated receipts shall be used and where feasible
cheque-like counter foiled receipts shall be used in order to retain actual and a true
copy of data.
(5)
Receipts, tickets and licences shall be issued in strict numerical sequence both as
regards books, rolls or sets and the individual receipts a book, roll or set should be
completed before another is used.
(6)
Good carbon impressions should be made on all copies. No erasures may be made
nor may any alteration be made to any word or figure describing the amount of the
receipt the payee’s name or the date. Such an error shall necessitate the cancellation
of the receipt and the issue of a fresh one.
(7)
All used receipts books shall be verified by the Head of Internal Audit who shall
issue a certificate of acknowledgment of receipt of the books, to be able to get new
receipt books from Head of Finance and the form or the certificate to be issued by
the Auditor as provided in this manual..
(8)
Cancellation of receipt shall be effected by marking the word “cancelled” across all
copies of the receipt which shall stay affixed or re-affixed in the receipt book and
the number of each cancelled receipt shall be recorded in the Cash Book.
4.6.2
Revenue Register(s)
(1)
The duplicate (triplicate in case of four copies) copy of the bank pay-in-slips shall
be attached to duplicate copies of the demand note(s), receipts, original of the daily
cash summaries and classified in the Revenue Registers by the Revenue Collector or
any other person authorised by him/her.
(2)
Each source of revenue shall be maintained in a separate Revenue Register.
(3)
The Revenue Register shall be produced as in Form RE 11 below.
(a) The Revenue Register(s) shall be recorded in duplicate.
(b) (ii) Both copies shall be signed by the Revenue Collector
(c) The original shall be submitted to the Accounts Office together with copies
of support documentation for processing.
(d) The duplicate shall remain in the book for audit purposes.
Note: All arrears carried forward at the end of each accounting period must be duly
brought forward at the beginning of the next period.
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73
Form RE 11: The Revenue Register
XXXX COUNCIL
REVENUE REGISTER
Department/Section……………………………
Date…………………………………….
Folio………………………
Description of Revenue………………………..
Arrears
REVENUE DUE
Account Code………………………….
REVENUE RECEIVED
B/f
Amount
Arrears
Remarks:
paid
C/F
File
out/banked
Numbers,
Cross
Reference
etc
Shs
Date
due
Details
Payers
Amount
Total
For F/Y
due
Date
Receipt
Arrears
Current
Numbers
Total
amount
to
received
date
Shs
Shs
Shs
Shs
Total
Names:………………………………………………………………………….
Signature………………………………………………………………………..
Date…………………………………………………………………………….
4.6.3
Accounting for Local Revenue
The accounting entry for recording local revenue receipts is:
DR
Collection Account (bank) (eg. Code 321106)
CR
Relevant Revenue Account (eg. 113101 Land Fees)
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74
4.7
REVENUE ACCOUNTABILITY
The Head of Finance will give instructions as to the frequency and method by which
revenue collectors will pay in revenue collected and bring their cash and counterfoils to
account. Parish chiefs or Ward agents where they have been authorised to collect revenue,
will bring revenue collections to account at sub-county headquarters at least once a month.
If they pay cash direct to the bank they must submit paying-in-slips and duplicate receipts
to the Head of Finance.
4.7.1
Revenue Accountability
The Head of Finance shall prepare and submit a monthly revenue distribution return for the
previous month to other Councils at least within seven day of the following month. This
return shall contain all sources of local revenue collected.
4.7.2
Checking of Revenue Accounts
The Head of Finance, shall arrange for the cash accounts to be examined carefully and
when he/she is satisfied that all collections have been brought to account, he/she shall
arrange for the revenue collector’s cash book to be endorsed with the receipt or licences
issued from each counterfoil book which shall also be initialled and dated. In the case of
fixed fee ticket a similar entry shall be made against the last entry in the ticket register. To
ensure that revenue collectors account for all receipts, their ticket registers and cash books
shall be examined at the same time whenever a fresh supply of receipt, ticket or other
counterfoils is issued.
4.8
ARREARS OF REVENUE
One month from the end of each financial year, the head of each revenue collecting
department must prepare a draft list from each Revenue Register of revenue due but not
collected.
Items should be struck off the list during the last month of the financial year as they are
collected.
At the end of the financial year a final list of arrears should be typed, totalled, certified by
the head of the department, and sent to the Head of Finance to reach him not later than one
month after the end of the financial year.
The Head of Finance will consolidate the returns submit them to the Executive Committee
for action in accordance with Financial Regulations.
4.9
GRANTS FROM CENTRAL GOVERNMENT
The Government shall remit Conditional, Unconditional, and Equalisation Grants to
District, City, Municipality and Town Councils.
Conditional Grants shall consist of moneys agreed upon by Local Government and
Government for specific programmes. Unconditional Grants shall be paid to Council to
finance Council’s decentralised Services. Equalisation Grants from Central Government
The Local Governments Financial and Accounting Manual 2007
75
shall be handled in accordance with the procedures agreed upon with the Central
Government.
An acknowledgement receipt shall be raised and sent to the Central Government
confirming the receipt of funds.
4.9.1
Unconditional Grants
Unconditional Grants shall be deposited on 321106 – Collection Bank Account (General
Fund)
4.9.2
Conditional Grants
Conditional Grants should be deposited on 321106 – Collection Bank Account or if
demanded a separate approved bank account may be opened for each conditional grant
received from donors or NGO’s.
4.9.3
Delegated Grants
Delegated funds may be deposited on 321106 – Collection Bank Account but separate
ledger accounts should be maintained. In case of funds for hospitals, the necessary ledgers
and vote books should be opened by the hospital authorities, assisted by the Head of
Finance. Delegated Funds should be handled according to the condition of the line
Ministry.
Separate financial statements may be prepared for the delegated funds, in accordance with
the line ministry’s guide lines.
4.9.4
Recording Government Grants
General guidance on the recording of grants from the Government or other government
units is given under Section 17 (explanation of liabilities) of the GOU Chart of Accounts
and you should refer to this section now. The following principles apply:
1. Grants received by the local government from the Treasury or other government unit
should, on receipt, be treated as clearing inter-government transfers (and therefore
current liabilities/accounts payable). They will only be removed from this classification
to and transferred to the revenue classification (recurrent or capital receipts) only after
the local government to which the transfers were made has rendered a return
(accountability) indicating the actual activities for which the funds were expended. The
reasoning behind this treatment is that should the local government fail to provide
accountability, the funds are reimbursable to the Treasury or the other government unit
where they originated. Therefore, grants are received from the Treasury or other
Government unit the local government should make the following record in its books of
accounts:
Date
31/07/200X
Account
Collection Account (General
fund)
The Relevant Government
Grants Clearing Account
Code
321106
Select from 416001
to 416040
The Local Governments Financial and Accounting Manual 2007
DR
XXX
CR
XXX
76
2. When the Local Government renders a return to the centre or to the other government
unit where the grant originated to explain the use of the funds the following accounting
entry should be made to remove the amount used from the liability section to the
revenue section.
Date
15/10/200X
Account
The
Relevant
Government
Grants Clearing Grant Account
The relevant grant revenue
account (current or capital)
Code
Select from 416001 t0
416040
Select from 133101 to
133106 for recurrent grants
and 133201 to 133206 for
capita grants
DR
XXX
CR
XXX
Illustration RE 1: Recording Government grants
The following information on grants to a Local Government is provided
Received
Date
31/07/0X
Accounted for
Grant
District unconditional
grants
Conditional transfers for
PHC salaries
Conditional transfers to
agricultural extension
Amount
100,000,000
Total
180,500,000
Date
10/10/0X
46,000,000
34,500,000
Grant
District unconditional
grants
Conditional transfers
for PHC salaries
Conditional transfers
to
agricultural
extension
Total
Amount
100,000,000
42,500,000
33,000,000
The grants received were transferred to the relevant department expenditure accounts on
4/08/0X. All unconditional grants received were used in the payment of salaries
The journal accounting entries to be made are as follows:
Date
31/07/0X
4/08/0X
11/10/0X
Account
Collection Bank Account (General Fund)
District unconditional grants
Conditional transfers for PHC salaries
Conditional transfers to agricultural extension
To record the receipt of the above grants and the
banking of the funds to the collection bank account
Salaries Bank Account
Health Department Bank Account
Production Department Bank Account
Collection Bank Account
To record the transfer of grants received from the
collection bank account to the various expenditure
bank accounts
District unconditional grants
Conditional transfers for PHC salaries
Conditional transfers to agricultural extension
Local Government Unconditional Grant
Local Government Conditional Grants (PHC salaries)
Local Government Conditional Grants (Agriculture
extension)
Being the transfer of funds accounted for from clearing
(liability) accounts to revenue accounts
The Local Governments Financial and Accounting Manual 2007
Code
321106
416001
416007
416014
DR
180,500,000
321103
321103
321103
321106
100,000,000
46,000,000
34,500,000
416001
416007
416014
133104
133103
133103
100,000,000
42,500,000
33,000,000
CR
100,000,000
46,000,000
34,500,000
180,500,000
100,000,000
42,500,000
33,000,000
77
Notice that expenditure of the grants will be made by the respective departments from their
individual expenditure bank accounts after the funds have been transferred there from the
collection account. For example if the Health Department spent Shs 2,000, 0000 0n a
workshop on 24/08/0X the entry to record such expenditure will be:
Date
24/08/0X
Account
Workshops and Seminars
Health Department Bank Account
Code
DR
CR
On 11.10.0X after the submission of accountability and assuming such accountability has
been accepted by the central government the accounts in the general control ledger will
appear as shown below:
Account Name: District Unconditional Grant
Number 416001
DATE
DESCRIPTION
1/7/0X
31/7/0X
Balance b/f
Collections account
(General fund)
LG
unconditional
grants
11/10/0X
FOLIO
Account
DEBITS
CREDITS
4
4
100,000,000
100,000,000
0
Account Name: Conditional Transfers for PHC Salaries
Number 416007
DATE
DESCRIPTION
1/7/0X
31/7/0X
Balance b/f
Collections (General
Fund)
LG conditional grants
11/10/0X
FOLIO
DEBITS
Account
CREDITS
4
4
DESCRIPTION
1/7/0X
31/7/0X
Balance b/f
Collections (General
Fund)
LG conditional grants
11/10/0X
FOLIO
42,500,000
DEBITS
4
4
DESCRIPTION
1/7/0X
11/10/0X
Balance b/f
District unconditional
grants
FOLIO
CREDITS
DESCRIPTION
1/7/0X
11/10/0X
Balance b/f
Conditional transfers
for PHC salaries
Conditional transfers
to
agricultural
extension
,,
FOLIO
DEBITS
CR
34,500,000
1,500,000
Account
CREDITS
100,000,000
Account Name: Local Government Conditional Grant
133103
DATE
BALANCE
DR
-
33,000,000
4
46,000,000
Account
34,500,000
DEBITS
CR
3,500,000
Account Name: Local Government Unconditional Grant
Number 133104
DATE
BALANCE
DR
-
46,000,000
Account Name: Conditional Transfers to Agricultural Extension
Number 416014
DATE
BALANCE
DR
CR
100,000,000
BALANCE
DR
CR
100,000,000
Account
4
42,500,000
BALANCE
DR
CR
42,500,000
4
33,000,000
75,500,000
The Local Governments Financial and Accounting Manual 2007
CREDITS
Number
78
The following are standing liability balances:
Clearing Government Transfers as at 11/10/200X
Conditional transfers for PHC salaries
416007
3,500,000
Conditional transfers to agricultural extension
416014
1,500,000
4.10
DONOR AND NGO FUNDS
A Council may receive Donor and NGO funds. The accounting treatment of these funds
will depend on the conditions, terms and regulations attached thereon.
The Council that receives Donor Funds shall ensure that the Grants are spent solely on the
objectives agreed upon by the Donor and Central Government or the Donor and the
Council.
On receiving Donor Funds, the Council shall raise an acknowledgement receipt, which
shall be sent to the Donor of the funds.
Unconditional and Conditional Donor Funds shall be banked in the General Fund Account
but Conditional Donor Funds may be banked in a separate Bank Account depending on the
conditions stipulated by the donor.
Unconditional Donor Funds shall be recorded as Council’s revenue, while the Conditional
Donor Funds shall be treated and recorded in accordance with the Donor’s guidelines.
The Local Governments Financial and Accounting Manual 2007
79
5.0
EXPENDITURE
5.1
INTRODUCTION
After the approval of budget estimates or vote on account, Local Governments have the
authority to make payments and implement the approved budget. Finance department is
responsible for making the initial budget implementation activities of Opening of vote
books, cash books, abstracts, ledgers and registers, bank accounts, for the new financial
year before making payments.
5.1.2
Department Warrant
The Chief Executive shall appoint Vote Controllers every financial year, after the approval
of budget estimates and issue them with Department Warrants.
Departmental Warrant will indicate amount authorised to expend during the year. The
Departmental Warrant should be produced as shown in form EX 12 below.
Form EX 12: Departmental Warrant
XXXXXX COUNCIL
DEPARTMENTAL WARRANT
WARRANT NO……………………………………..
ISSUING OFFICER………………………………………………
AUTHORISED OFFICER……………….………………………
TITLE……………………………………………………………...
TITLE…………………………………….………………………
SIGNATURE…………………………….………………………...
SIGNATURE…………………………….………………………
DATE………………………………………………………………
PROGRAMME CODE………………………………………...
SUB-PROGRAMME CODE…………….………………………
You are hereby authorised to expend during the year 20…………………….. the amounts specified below as they become due, in
accordance with the Financial Regulations 33
The authority shown against each item should be quoted on all vouchers as the authority for the expenditure, an a reference should
be given to the number of this warrant and the Department by which it is issued.
ITEM CODE
PARTICULARS
AUTHORITY
AMOUNT
………………………………..
………………………………..
………………………………..
………………………………..
………………………………..
………………………………..
………………………………..
………………………………..
………………………………..
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………………………………..
………………………………..
………………………………..
Shs
Distribution:
Original to addressee
Duplicate retained by Issuing Department
The Local Governments Financial and Accounting Manual 2007
80
5.2
PAYMENTS AND COMMITMENTS
A commitment occurs when a local government enters into a legal obligation that requires
it to pay for goods or services either immediately or sometime in future.
A local government enters into financial commitments whenever it enters into an agreement
which involves future financial payments. It is very important that LG’s make
commitments within their approved budget estimate limits. Commitment of funds should be
in conformity with the provision of Reg. 51 (3)) of the LGFAR , 2007 and Regulation 87 to
the Local Governments(Public Procurement and Disposal of Public Assets) Regulations
2006
5.2.1
Key Principles of LG Commitment Control and Payment Process
(1) All local government recurrent and capital development expenditure transactions are
processed through the commitment control system (CCS).
(2) No contract agreement, LPO or other commitments should be issued unless a proper
commitment requisition Form EX 13 presented below, has been approved.
All commitments must be entered into the vote book (Form EX 18) as soon as they occur.
Each commitment requisition should possess a reference number.
Heads of departments should produce annual department cash requests by quarter for
approval of CEO as in Form EX 15.
All commitments should be consistent with the approved annual budget and relate to
activities in the annual workplan.
Commitments should not be approved unless there is sufficient balance available under the
quarter’s commitment limit, (as presented in Form EX 16 below) for the relevant budget
item.
No payment should be made unless it is based on a previously approved commitment.
The Head of Finance should produce a monthly/quarterly report on outstanding
commitments ( as presented in Form EX 14 below) unpaid and overdue bills by 15th day of
the following month.
The head of finance shall maintain a contract/commitment register as shown in Form EX 17
Chief Executives will be personally responsible for any over-commitment of the local
governments, and should monitor commitments together with vote controllers.
When Local Government staff process a payment, they should approve it only if the
associated commitment has been approved as well. This means that when a local
government receives a bill it will be able to pay it promptly.
Local Governments must observe the established process for making payments and
commitments. The following figure summarises the established payment process at various
levels.
The payment and commitments process is shown in illustration EX 2.
The Local Governments Financial and Accounting Manual 2007
81
Illustration EX 2: Payments/ Commitments Process
Chief
Executive
Head of Finance
Review
documentation
and sign
LPO/Contract
Supplies
officer prepares
LPO/DTB draft
contract
Head of a
Department
Approve
Commitment
Department
Accountant
Fill out
Commitment
Requisition
Form
Section/Unit
Head
Requisition
Approved
supplier/
contractor
from cc
Review LPO/
contract &
entry in vote
book
HoD Signs
LPO/
Reviews
draft
contract
Receive copy
LPO/Contr.
Enter into
Commitments
Register
Request
Accountant to
Initiate
Commitment
The Local Governments Financial and Accounting Manual 2007
Review /PV
documentation
and sign
cheque
Match
invoice to
LPO, GRN
& Inspection
report
Update
Commt.
Requisition
& prepare
payment
voucher
Review
payment
voucher
Receive
Invoice
82
Update
Commitment
Register and
cash records
Record
invoice in
Commitment
Register
Approve
Payment
Voucher
Sign
Vote
Book
Send
LPO
supplier
Enter into
Vote Book
PV and counter
sign cheques
Approve, Sign
Commitment &
forward LPO/ Contr.
To Head of Finance
May
cheque
Prepare
cheque
Sign
Vote
Book
Update
Vote Book
and
Cashbook
Give cheque to
supplier who
signs Cheque
Register
Form EX 13: Commitment Requisition - A & B
A: COMMITMENT REQUISITION
Council……………………………
Department ………………..……
Section/Division…...
Code:……………………..
REQUISITION No./Month …………………………………..
A: REQUEST FOR COMMITMENT
To be completed by User Department
Stores or Services Required
Item No.
Quantity
Unit
Details of Goods and Services
Estimated Cost
Total
Amount in Words…………………..…………………………………………………………….
Special Instructions ….……….………………………………………………………………………
………..…………………………………………………………………………………………………
Expenditure Details:
Department
……………………………………Division/Section……………………………….
Budget Item
……………………………………
Description of Activity…….……………………..
Sub-item……………………………………
Workplan Ref. No…………………………
Funds Position:
Balance per Commitment Limit or
Cash Release
Amount Committed
Requisition prepared by: ……………………
Balance after Commitment
Position:. ………………….
Authorised by: (Vote Controller).……………… Position: ……………
Date:…………….
Date: ………….…
The Local Governments Financial and Accounting Manual 2007
83
B : APPROVAL OF COMMITMENT
For Use by Finance Department and CE
Activity in Workplan (yes/no) ………………………Funds available as per Vote Book ……………….
Commitment Amount of..…………………… approved and authorised in Vote Book (yes/no) ………
If commitment rejected, give reasons ………………………………………………………………
HoF/ Treasurer …………………………..……………….
Chief Executive/ CE ……………………………….
Date: …………………………….
Date: ………………………………
Payment Voucher No. and Amount ………………………………………………….…………….
Cheque/Payment Instruction No. and date
…………………………………………………………………………………
The Local Governments Financial and Accounting Manual 2007
84
Form EX 14: Report of Overdue Bills Held
REPORT OF OVERDUE BILLS HELD FOR THE MONTH ENDING…………………………
Project Code
Description
Head
Date
Bill
Received
Date
Bill
Due
Invoice
Number
Contractor/Supplier
Amount
Additional
Obligations
(a)
(b)
(c)
(d)
(e)
(f)
HoD
Position:
Name:
Signature:
Date:
Ho IA
Position:
Name:
Signature:
Date:
HoF
Position:
Name:
Signature:
Total Est.
amount
owed
(e + f)
(g)
Remarks
(h)
Date:
The Local Governments Financial and Accounting Manual 2007
85
Form EX 15: Annual Department Cash Request by Quarter
Department:…………………………….
CFB-1:
Section
Section
Name
Items
Code:
FY:
Approved Budget
Type:
A - Quarterly Cash Requests
B - Approved Quarterly Cash
Estimates
Code
Projections to be completed by CFO)
Quarter
Quart
Quarter
Quarter
1
er 2
3
4
Quarter 1
Qu
Quarter
Quarter
arte
3
4
(k)
(l)
r2
(a)
(b)
Of Which
Prepared by: HoD
Reviewed by: HoF
Approved by: CE
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
GRAND
TOTAL
LG 1
LG 2
LG 3
Name: ………………………………………. Signature ……………………………….. Date: ………..
Name: ………………………………………. Signature ……………………………….. Date: ………..
Name: ………………………………………. Signature ……………………………….. Date: ………..
The Local Governments Financial and Accounting Manual 2007
86
Form EX 16: Department Quarterly Cash/ Commitment Requisition
Department………………………
Type:
……...
Code:
Section Code
Section
Item Code
Name
Financial Year:
Item
Budget Provision
Description
Approved
Revised Budget
Quarter:
Cumulative
Budget
Quarterly Cash Requirements by month (insert
Approved quarterly cash projections by month (to be completed
Approved
Cash
Available/Ba
month)
by CFO)
Quarterly
Receipts
lance
Month 1
Month 2
Month 3
Total
Month 1
Month 2
Month 3
Total
Commitment
Limit
(f – g)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(r)
TOTAL
Prepared by: Vote Controller
Name: ………………………………………. Signature ……………………………….. Date: ………../…………./20
Reviewed by: HoF
Name: ………………………………………. Signature ……………………………….. Date: ………../…………./20
Approved by: Chief Executive
Name: ………………………………………. Signature ……………………………….. Date: ………../…………./20
The Local Governments Financial and Accounting Manual 2007
87
Form Ex 17: Contracts/ Commitment Register
Register
Number
Date
Contractor
Contract /
Commitment
Amount
/ Supplier
Agreement
Requisition
Committed
Number
Form No.
Shs
Bills
Date
Shs
Amount Paid
Overdue
Date
Shs
Amount Due
Shs
(y/n)
Total
The Local Governments Financial and Accounting Manual 2007
88
5.3
VOTE BOOK
At the commencement of each financial year, the Department’s approved budget provisions are
entered in the vote book, using a separate sheet for each item. During the year the approved
estimates may be amended by authorised virements, reallocations and supplementary provisions.
A vote book should be produced as shown in Form EX 18 below.
5.3.0
Commitments
To the extent that commitments entered into are incurred by the raising of Local Purchase
Orders, entering into contracts, or as the result of anticipated imprest retirements, the
"commitments" column of the Vote Book should be entered. This acts as a safeguard to avoid
overspending. Payments and further commitments must be avoided if existing liabilities have
taken up the entire vote.
As Cheque Payment Vouchers and Imprest Cash Payment Vouchers are raised, the "payments"
column of the Vote Book should be entered, and the balance column entered with the correct
balance, having adjusted for liabilities discharged.
Each Vote Controller shall ensure that the vote book is promptly posted
The Local Governments Financial and Accounting Manual 2007
89
Form EX 18: Vote Book
VOTE BOOK
Budget Adjustments
Department …………………………………..
Division/Section ……………………………..
Item ………………………………………….
Approved Estimates (Shs.) ………………….
(1)
Date
(2)
Reference
Voucher
(3)
Payee/
Details
Code:…………….
Code:…………….
Code:…………….
(4)
Commitment
Limit
(5)
Cash
Release
(Cumulati
ve)
(Cumulati
ve)
Workplan
(6)
Commitm
ents
Date
(7)
Balance
on
Commitment
Limit
(4 – 6)
(8)
Commitm
ent
Balance
on Cash
Release
(5 - 6)
Reference
(9)
Payments
(10)
Cash
Balance
Amount
New
+/-
Budget
Shs.
Shs.
(11)
Unpaid
Commitments
(12)
Vote
Controller
(12)
Remarks
Initials +
Date
(5-9)
(6-9)
Note: The entries for commitments shall be derived from the approved commitment requisition form.
At least one of (7) or (8) must remain positive at all times
The Local Governments Financial and Accounting Manual 2007
90
5.3.1
Reconciliation of Vote Book
The Head of Finance will supply monthly extracts from the main ledger to each Vote
Controller who must then compare and reconcile the details with the other Vote Book.
Having made any necessary adjustments and corrections, the Vote Controller must certify
to the Head of Finance that the Vote Book agrees with the main ledger. Such
reconciliations and certifications must be completed within thirty days of the receipt of the
monthly information from the Head of Finance.
It is the duty of each Vote Controller to liase with the Chief Executive and the Head of
Finance to initiate necessary virements, reallocations and supplementary provisions as a
result of overspending and under-provisions discovered in the reconciliation process.
5.4
PROCUREMENT OF SUPPLIES, SERVICES OR WORKS
The Councils Procurement plan shall be approved by the Council at the time of approval of
the budget of the Council. The Council’s Committee responsible for procurement shall on
request of user department authorise procurement, provided that such procurement is within
the budget of that Council.
5.4.1
Initiation of Purchases
When there is need for goods or services in department, the Vote Controller shall raise a
written request to the Chief Executive. The Requisition shall be produced as in Form EX
19 shown below.
Form EX 19: Requisition Form for Goods and Services
XXXX COUNCIL
XXXX DEPARTMENT
REQUISITION FORM
No…………………..
Date………………...
Department………………….
From: Vote Controller
To: Chief Executive
Item
REQUISITION FOR GOODS AND SERVICES
This is to request for authority to obtain or purchase the following:
Particulars
Vote
Unit
Quantity
Rate
Shs
Total
Requisitioning officer:
Names………………………
Amounts
Shs
Shs
Recommended/not
recommended………………
Signature……………………
Title (HoF)…………………
Approved/Not approved
Signature……………………
Title (Chief Executive)….
Date…………………………
Date…………………………
Signature……………………
(1) The requisition shall be written in duplicate.
(2) The original is sent to the Authorising Officer; and
(3) The duplicate is retained in the book.
The Local Governments Financial and Accounting Manual 2007
91
Illustration EX 3: Completing the Requisition Form
Assume the District or Town Engineer requires the following items for the Works
Department:
(a)
5000 litres of diesel at Shs 950 per litre;
(b)
1 spare tyre for tractor at Shs 1,500,000;
(c)
4 reams of duplicating paper at Shs 7,000 each;
(d)
30 uniforms for road maintenance workers at Shs 40,000 each.
The Local Governments Financial and Accounting Manual 2007
92
These particulars shall be recorded in the Requisition Form as follows:
Illustration EX3: Completing the Requisition Form
XXXX COUNCIL
XXXX DEPARTMENT
REQUISITION FORM
No…………………
Date……………….
From: Vote Controller. Chief Engineer
To: Chief Executive
Department Works
REQUISITION FOR GOODS AND SERVICES
Subject:………………….
This is to request for authority to obtain or purchase the following:
Item
Particulars
Vote /Item
Unit
Quantity
1
Diesel
07-223007
Litres
5000
2
Tyre
07-228002
Piece
3
Stationery
07-221011
4
Uniform
07-224002
Rate
Shs
950
Amounts
Shs
4,750,000
1
1,500,000
1,500,000
Reams
40
7,000
280,000
Pieces
30
40,000
1,200,000
Total
Requisitioning Officer:
Recommended/Not recommended
Approved/Not Approved
7,730,000
Names…………………………….
Signature………………………….
Signature…………………………..
Signature………………………….
Title……………………… (HoF)
Title (Chief Executive)
Date……………………………….
(1)
The request shall be accompanied by the Vote Controller’s Vote Book to ensure that
on approval postings are made therein immediately.
(2)
On satisfaction of availability of funds and the need for goods/services the Head of
Finance may recommend the request or modify it accordingly, for approval by the
Chief Executive.
(3)
The approved requisition shall be returned to the Vote Controller to raise a Local
Purchase Order
5.4.2
Local Purchase Order
All goods and services procured in Uganda must be ordered by means of a Local Purchase
Order, prepared in triplicate and signed by the Head of Department or Vote Controller. The
original and duplicate shall be sent to the supplier. The triplicate shall remain in the book.
However as a means of strengthening internal control the LPO may be prepared in
quadruplicate, whereby the original and duplicate will be sent to the supplier, the triplicate
The Local Governments Financial and Accounting Manual 2007
93
sent to Accounts and the quadruplicate that remains in the book being used by the Vote
Controller to update and record the vote book for the commitment.
Given the approved requisition above, the Local Purchase Order shall be completed as
follows:
Illustration EX 4: Completing the LPO
XXXX COUNCIL
LOCAL PURCHASE ORDER
From:……………………….
Department Works
Please supply goods or services as detailed below:
Description of Goods/Services
Unit
of
measure e.g.
Litres, kg.
Litres
Diesel
Piece
Tyre: Size 1800 x 7 ply 25
Litres
Lubricants
Pieces
Overalls
Total
Vote to charge
07
Date:………………………
LPO………….. No……….
Requisition Ref..…. No…..
To: General Merchants (Supplier)
Address: P. O. Box 41, Soroti
Quantity
Value
Shs
4,750,000
1,500,000
280,000
1,200,000
------------7,730,000
========
I certify that these goods/services are ordered in accordance with the
Local Governments (Public Procurement and Disposal of Public Assets)
Regulations 2006 and that funds are available per authority quoted:
5000
1
40
30
Date:…………………
Authority
Approved by Contracts
Committee (if applicable, quote
reference)
Rate per unit
Shs
Verified by
HoF………………………
Date……………………….
Department Stamp
950
1,500,000
7,000
40,000
Signature:……………………
Vote Controller
Name/Rank: District Engineer.
Approved by:
CE…………………………
Stamp
(1)
All Local purchase Orders shall be signed by the HoD as vote controller to show
confirmation for request and availability of funds
(2)
All Local Purchase Orders shall be counter signed by the Chief Executive and the
Head of Finance.
(3)
Before dispatch to the supplier, each Local Purchase Order shall be entered in the
department Vote Book as a commitment.
The Local Governments Financial and Accounting Manual 2007
94
5.4.3
Service Contracts
Specialized Service Contracts shall be drafted by the Council’s Legal Officer or Technical
Expert as the case may be or adopt the format referred to in the Local Governments (Public
Procurements and Disposal of Public Assets) Regulations, 2006.
(1) Names, Signatures, and titles of the requisitioning Vote Controllers.
(2) Approval by the CE and verification by the HoF.
(3) Names, signature and address of supplier of services; and
(4)
Reference to Contracts Committee Authority should be shown.
5.4.4
5.4.4.1
Acquisition of Goods
Delivery of Goods
When the supplier delivers goods to the Council stores or to any other location as may be
directed by Council, the goods shall be accompanied b the Delivery Note prepared in
duplicate by the supplier specifying the quantities, quality, units and other details about the
goods being supplied. On receipt of the goods the storekeeper shall count them and check
their conformity with the LPO, and then raise a Goods Received Note for
acknowledgement. The GRN shall be produced as shown in Form EX 20 below:
Form EX 20 Goods Received Note
XXXX COUNCIL
GOODS RECEIVED NOTE
No…………………
Department:
Date……………...
Stores: Stores
No…………..
Stores : Number
We acknowledge receipt of the following goods from:
Item
Particulars
1
Diesel
2
Tyre: 1800 x 70 ply 25
3
Lubricants
Overalls
Receiving Officer/Storekeeper……………
Names: Okello Amos
Signature:…………………………………
Works
LPO
General Merchants.
Unit
Litres
Piece
Litres
Pieces
Quantity
5000
1
40
30
Remarks
Department: Works
Date…………………
INSPECTION REPORT
Vote Controller…………………………………………………………………………………
…………………………………………………………………………………………………..
Signed by (Names)……………………………….. Date………………………………………
Title……………………………………………………………………………………………...
Internal Auditor…………………………………………………………………………………
…………………………………………………………………………………………………..
Names…………………………………………………………………………………………..
Signature:…………………………………………. Date……………………………………..
The GRN shall be filled in triplicate.
The Local Governments Financial and Accounting Manual 2007
95
(1)
The original copy shall be sent to the Accounts Department, together with the
duplicate copy of the LPO, and the original of the Delivery Note to enable the HoF to
process the payment.
(2)
The duplicate copy shall be sent to the Vote Controller (as notification for goods
received).
(3)
The triplicate copy shall be retained in the book.
5.4.4.2
Contract Agreements
In case of payment for a full or partial contract for services, a certificate in the format
below shall be completed by a Technical Expert of the Council indicating the level of work
completed so as to confirm whether payment to the contactor should be made, withheld, or
amended according to the quality and defects of the work so far executed.
The Technical Experts’ certificate as presented in Form EX 21: below shall be the final
evidence for payment.
Form EX 21: Final/ Interim Certificate
XXXX COUNCIL
FINAL/INTERIM CERTIFICATE No…………
Date………………..
Contract No………………………… Procurement Committee Sanction/Ref…………………………...
Project…………………………………………………………………………………………...
Contractor……………………………………………………………………………………….
Address…………………………………………………………………………………………..
Commencement Date……………………………… Completion Date………………………..
Contract Value Shs……………………………….. Maximum Retention Shs………………..
(A) VALUE OF WORK EXECUTED TO DATE
(i) By main contractor……………………………..
(ii) By nominated sub-contractor…………………..
(iii) Materials on site……………………………….
(iv) Direct labour/works……………………………
(v) Others (Specify):………………………………
Shs
Shs
……………..
……………..
Gross Total
(B) DEDUCT:
(i) Retention fee (%)……………………………..
(ii) Damages………………………………………
(iii) Value of Stores Issued by Council:……………
(iv) Value of Direct Labour by Council:…………
……………..
Total Deductions
(C) DETAILS OF PREVIOUS PAYMENTS
Cert. No.
Shs.
1. …………………………………..
2. …………………………………..
3. …………………………………..
……………..
4. …………………………………..
5. …………………………………..
6. …………………………………..
The Local Governments Financial and Accounting Manual 2007
96
XXXX COUNCIL
FINAL/INTERIM CERTIFICATE No…………
Date………………..
Contract No………………………… Procurement Committee Sanction/Ref…………………………...
Project…………………………………………………………………………………………...
Contractor……………………………………………………………………………………….
Address…………………………………………………………………………………………..
Commencement Date……………………………… Completion Date………………………..
Contract Value Shs……………………………….. Maximum Retention Shs………………..
7. …………………………………..
8. …………………………………..
9. …………………………………..
10. …………………………………..
Total Previous Payments
(D) AMOUNT NOW DUE TO CONTRACTORS
Certifying Officer……………………….
Title……………………………………..
Recommended by…………..
Technical Officer…………...
Date………………………...
Head of Works Department………..
Date…………………………
Approved by CEO ………………..
Note: A – (B + C) = D.
5.4.5
Supplier’s Invoice or Contractor’s Certificate Payment Procedures
(1) On receipt of the supplier’s invoice or contractor’s certificate together with the duplicate
LPO contract the Accounts Department, various officers will check the documents to
confirm actions taken at different stages of initiation, acquisition of goods, and/or services
pertaining to the said invoice.
The Local Governments Financial and Accounting Manual 2007
97
Form EX 22 below shows a payment voucher .
Form EX 22: Payment Voucher Form
XXXX COUNCIL
PAYMENT VOUCHER
Department/Section: ………..
Dr. To. ………..
Date
Detailed description of service or article
Voucher No. …………
Address:…………….
Taken on charge expenditure
………..
Ledger Folio
…………………
………………………..
…………………………………………
…………………………………………
…………………………………………
…………………………………………
Date
…………………….
Authority.
Total
Approved Vote:…………………...
Account No. …………..
Approved Estimates……………….
Cheque/Payment Instruction No.……………….
I HEREBY CERTIFY that the above amount is correct and was incurred under the authority quoted, that the
above service has been duly and properly performed/supplies have been received in good condition, that the
payment/price charged is in accordance with regulations, the terms of the contract or agreement which are
fair
and
reasonable,
and
that
the
above
expenditure
of
Shs
(in
words)
……………………………………………………………………………………………………………….wil
l not cause an excess over the provision made under the authority quoted on this voucher, or under the
programme/ sub-programme shown below.
Amount
Shs.
……………
………….
I FURTHER CERTIFY that the stores have been taken on charge, or are expendable, as indicated above.
Signature [Chief Engineer]
Vote Controller
Signature………………
Chief Executive
Received/Paid this……………….. day of ……………… 200x in payment of the above account the sum of
shillings…………….(in words)
Passed for payment
Verified by
Entered in Vote Book
(HoF)
(To be completed by Office origin)
(To be completed by
Date……………………….
Date…………………..
passing officer) For
Signature [Engineer]
Shs ………….
Signature………………….
Depart – Clerk
Date…………………
………
Signature……………
………
………………………………..
………………………………..……..
Signature of payee
Signature of paying Officer (Cashier)
Signature of witness to payment………………………………..
Inter-departmental clearance…………………….
Total
Programme of estimate:
Shs………………
Sub-programme:
Item:
Original:
Accounts
Duplicate:
Payee
Triplicate:
Remains in book.
(2)
On payment for goods the following documents shall be verified, matched with each
other and attached to the payment voucher:
(a) Duplicate copy of requisition for goods from the user department;
(b) Duplicate cop of the Local Purchase Order (LPO);
The Local Governments Financial and Accounting Manual 2007
98
(c) Delivery Note from supplier;
(d) Goods Received Note (GRN) from stores;
(e) Supplier’s Invoice; and
(f) Contracts Committee Authority.
(3)
On payment for services the following documents shall be verified, matched with
each other and attached to the payment voucher:
(a) Copy of Contract/Agreement for the service;
(b) Invoices from contractor;
(c) Certificate of performance, or Inspection Report, approved by a Technical
Expert recognized by the Council, and
(d) Minutes of Contracts Committee Authority.
(4)
Payment vouchers shall be prepared in the original names of the payee. Where the
payment voucher covers more than one payee, such as group of employees, the
voucher shall be prepared in the names of the Vote Controller, indicating a certified
list of payees with amounts due to each one attached. All paid vouchers and
attached documents, supporting accountability shall be stamped “Paid”
5.4.6
Examination of Vouchers
(1)
Before any voucher is passed for payment the Head of Finance shall ensure that the
voucher and any supporting documents, invoices or musters-rolls are correct in all
relevant particulars, and that each voucher has been entered in the vote book, and
that sufficient provision is available in the relevant item to meet the expenditure.
(2)
If, on such examination the voucher is in order the Head of Finance as the case may
be, shall fill in, date and certify the voucher for payment. Such certification shall be
that the payment is in order and that sufficient provision is available in the relevant
item in the estimates to meet expenditure.
5.4.7
Contracts Payments (Commitments)
(1)
Before any payment is made on a works contract, the Head of Finance shall obtain a
certificate from the technical officer supervising the contract that the payment is in
order and is in accordance with the contract. The format of the interim contract
certificate is shown as Form EX 21.
(2)
Details of payment shall be entered in the contract register in accordance with Local
Government Financial and Accounting Regulations 2007.
On completion of the contract, details of retention money and penalties, if any, shall
be entered in the contract register.
(3)
The Local Governments Financial and Accounting Manual 2007
99
5.4.8
Payments
(1)
All payment vouchers and cheques or EFT instructions for signing shall be
accompanied by a Vote Book to ensure that the voucher is correctly made and paid from
the correct program and sub-program. All paid vouchers and attached documents,
supporting accountability shall be stamped “Paid”
(2)
The Vote Book shall be adjusted for the paid transaction.
(3)
All payments shall be by crossed cheques or EFT instructions. Should it be
necessary to open a cheque, this should be done by a “Crossing Cancelled” rubber stamp
on the cheque, and fully signed by the authorised bank signatories.
(4) Open cheques may only be issued in respect of the following:
(a) To designated Vote Controllers for encashment and payment of salaries,
wages, allowances and pensions of personnel;
(b) To imprest holders for replenishment of their imprest;
(c) To individual employees and Councillors in respect of their allowances,
emoluments, pensions and other authorised expenses
(5)
All cheques, promissory notes or any other financial document shall be signed by
the CE, HoF and a Head of a Department (where applicable).
(6)
A member of the Executive Committee or any councillor shall not be a signatory to
any Local Government Council’s financial document including cheques, Promisory Notes,
Electronic Funds Transfer instructions or any other financing document.
(7)
Using the data in illustration EX 5 a payment cheque shall be completed as shown
below:
The Local Governments Financial and Accounting Manual 2007
100
Illustration EX 5(a): Specimen of a Cheque
Notes
(1) The title of account must be stamped on all cheques using an official stamp.
(2) The names of the payee shall be written starting immediately after the word: “Pay”
(3) Avoid leaving any blank spaces between the amount in words, or in figures, which
could easily be manipulated.
(4) The cheque stubs shall be completed with the same particulars as the main cheque,
and must be referenced to the relevant payment documents.
(5) All signed payment instructions shall be entered into a payment register.
The Local Governments Financial and Accounting Manual 2007
101
Illustration EX 5(b): Specimen of a EFT Bank Instructions
Name of Bank
Branch: ……………………………….
To:
Funds Transfer
Request Form
The Manager
Please effect transfer of funds on my/our behalf by use of (tick desired option)
Date……………………………………………….…………
Electronic Funds Transfer (EFT)
Customer Instruction
Real Time Gross Settlement (RTGS)
(Please write in block letter)
Telegraphic Transfer (TT)
In Payment of the Total cost
32A
Currency and amount of transfer
I/We shall pay cash I.D. No.
50
Name and Address of Applicant
_______________________
I/We enclose cheque No.
_______________________
57
Name and Address of Beneficiary Banker
Debit my/our Account No.
______________________________________
UID No. (For transfer via New York Clearing House Interbank Payment System only)
______________________________________
Bank sorting (for UK Transfers only)
For Bank Use Only
59
Beneficiary’s information
20
Bank Ref No.
Rate
Account Number
Contract No.
Name
Cost in
Address
Commission
Telex Cost
70
Message (if any) Maximum 140 characters
71
Banks Charges
Total Cost
Clerk Init.
Official Init
Officer Init
Charge to my/our account
Charge to beneficiary’s account
Temporary Receipt:
Bank)
(This receipt is only valid with the validation by the
Condition of transfer:
Please transmit the above instructions at my/our risk and cost in cipher or
otherwise it being understood that at your discretion you may use the
Telex system or other telegraph service of any country or any other
recognized telegraph or transmission system.
I/We do hereby
unconditionally undertake to indemnify you and keep you fully indemnified
together with your correspondents from and against any losses or
damages which may be incurred by you or your correspondents arising out
of failure to receive the message and of any irregularity, delay, mistake,
telegraphic error, omission, misinterpretation or for any other reason.
I/We understand and agree that any risks including all exchange risks
arising out of or consequent upon this transfer are to be borne by me/us
alone.
I/We authorize you to debit me/our account/s with all the charges.
I/We have read the conditions and agree to be bounded by them
………………………………..
Applicant’s Signature
……………………………………
Telephone No.
Sig. Ver.
………………………………..
Applicant’s Signature
…………………………………..
Telephone No.
………………………………………
Manager’s Signature
NB: If the instructions cover several lines these can be attached and only
totals shown on this sheet.
The Local Governments Financial and Accounting Manual 2007
102
Using Illustration 5(a) Exp as an example, the Paid Cheques Register shall be completed as
in illustration EX 6 below:
Illustration EX 6: Payments Register
XXXX COUNCIL
Payments REGISTER
Bank………………………..
Account…………………….
PAYEE
Date
Vr.
No.
Names
Identity
Address
Chq/EFT.
No.
Amount
Shs.
Issued by
25.4.2000
0006
ABC
General
Merchants
Box 41
Soroti
000123
7,730,000
XXX
(Cashier)
Collected by
(Name)
Signature
of Payee
and Date
ABC
General
(1)
Each payment bank account maintained by the Council shall have a separate
Payment Register.
(2)
All and each of the support documentation and the payment voucher it-self shall be
stamped “PAID” to avoid using them again. A “PAID” stamp with date and space
for initiating may be made by the Council to be used for the purpose.
5.4.9
Payments by Cash
When the Chief Executive deems it necessary, she/he may permit a Vote Controller to
operate a cash payment system. If cash requirements are of a regular nature, it is advisable
for the Vote Controller to operate an imprest cash system. In this case the Chief Executive
in conjunction with the Vote Controller will determine the maximum cash limit that should
not be exceeded at any one time. Imprest Warrant shall be produced as in Form EX 23
below.
The Local Governments Financial and Accounting Manual 2007
103
Form EX 23: Imprest Warrant
XXXXXX COUNCIL
IMPREST WARRANT NO…..
TO BE SUBMITTED TO THE APPROPRIATE VOTE CONTROLLER
Department/Station……………………………
Signature of the Officer
Submitting the warrant……………...
Date…………………………..200X…………….. ...……………………………….Title
SCHEDULE
Name and designation of
person to whom the amount
is to be issued
Purpose for which issued
Amount
Dates for
repayment
accounting
and
Shs
Total
THIS WARRANT EXPIRES ON………………………………………………….
To:………………………………………………
CODE
IMPREST A/C
Station:…………………………………………
You are hereby authorised to issue the amount (s) shown to the person described above, to
be accounted to
……………………………………………………………………..………………………
In the manner and at the date(s) specified above.
Date ………………………….
Chief Executive ……………………………. HoF…………………………….
Original
Duplicate
Triplicate
5.4.9.1
.. To person to whom amount is to be issued
To Sub-Accountant/Vote Controller on whom it is drawn
.. To file for Audit purposes
Imprest or Advances
The Council should not use cash from collections for all payments including imprest and
advances.
The procedure to be followed on payment by cash is similar and related to that of payments
by cheque or Electronic Funds Transfer.
The Local Governments Financial and Accounting Manual 2007
104
Illustration EX 7: Use of Imprest or Advance
Assuming Shs 500,000 is advanced to an officer, Mr Juma to organize Independence Day
Celebrations. The money is released on basis of approved budget for the celebrations. The
money will be released to the officer as an advance to be accounted for and the following
entry shall be passed:
Date
Code
Particulars
Code
321504
321103
Other advances account (Juma)
Administration Dept Expenditure Bank
Account
Advance to Juma to organize independence
day celebrations
Folio
Dr.
Shs
500,000
Cr.
Shs
500,000
Special imprest advances of this nature shall be retired on or before the date specified on
imprest warrant.
Illustration EX 8:
Establishing the Imprest
Assuming an agreed and approved cash float for the Internal Audit Department is 500,000,
a payment voucher shall be raised and the amount withdrawn from the bank. The entries to
record the transactions will be:
Date
Code
Particulars
321108
Cash at hand – imprest (Head of Internal
Audit Department )
Internal Audit Dept Expenditure Bank
Account
Cash drawn to establish petty cash float for
the Internal Audit Department
321103
Code
Folio
Dr.
Shs
500,000
Cr.
Shs
500,000
(1)
The payment procedures from the main bank account to establish a petty cash float
shall be the same as those outlined for other payments.
(2)
Before payment is effected from the float, a payment voucher must be raised and
authorised, by the Vote Controller.
(3)
The Payee must sign the petty cash voucher to acknowledge receipt.
(4)
All relevant claims/requests documentary evidence must be attached thereto.
(5)
All paid imprest cash vouchers and attached documents, supporting the
accountability shall be stamped “Paid” to prevent the same documents from being
re-used for further payments. A paid stamp with date may be used.
5.4.9.2
Petty Cash Voucher
Petty cash payment shall be made on petty cash vouchers.
The Local Governments Financial and Accounting Manual 2007
105
5.4.9.3 Petty/Imprest Cashbook
All imprest holders should maintain petty/ imprest cashbook as presented in
illustration EX 10 below.
Illustration EX 9: Payments out of Imprest.
Assume voucher number 007 was used to pay the following expenditure for the week ending
15th April 2000:
1.
Milk
Shs. 10,000
2.
Photocopying
Shs. 25,000
3.
News papers
Shs. 15,000
4.
Mobile telephone cards
Shs. 120,000
This expenditure would be recorded in the petty cash voucher as follows:
Illustration EX 9: Payments Out of Imprest
XXXX COUNCIL
IMPREST CASH PAYMENT
Name of PAYE: VMMS General Merchants
Code
Particulars
Unit
VOUCHER NO. 007
Date: 15-4-2000
P. O. Box 41 Soroti
Quantity Rate
Amount
Shs.
Shs.
221007
Newspaper
221011
Printing & Stationery
221010
Break Teas
222001
Telephone Cards
Total
Authorised by: Head of Department
Paid by: Cashier
Received by: VMMS General Merchants
-
15,000
25,000
10,000
120,000
170,000
Signature……………………..
Signature……………………..
Signature………………………
5.4.9.4 Posting to the Petty Cashbook
Using example of Shs. 500,000 advanced to the Internal Auditor as Vote Controller and the
payments there from of Shs. 170,000 effected on petty cash voucher number 007. The
petty cashbook shall be posted in the following manner:
(1)
On receipt of the imprest payment, the imprest holder shall cash it at the bank and
enter the proceeds into the receipts column of the analysis petty cashbook.
Expenditure shall be recorded on the payments side under the respective account
codes. Recording shall be as follows:
The Local Governments Financial and Accounting Manual 2007
106
Illustration EX 10: Posting to the Petty/ Imprest Cashbook
Date
10.4.00
Receipts
Payments
Amount
Ref.
Particulars
Vr.
No.
500,000
Cheque/payment
XXX
VMMS
Gen.
Merch.
007
Total
Shs
170,000
Code
221007
Shs
10,000
Code
221011
Shs
25,000
Code
221009
Shs
120,000
Code
222001
Shs
15,000
Code
Code
Code
Code
Shs
Shs
Shs
Shs
Totals
(2)
The petty cashbook shall be completed by the Vote Controller other than the main
cashier and shall be filled in duplicate with a detachable original copy.
5.4.9.5 Replenishing the Imprest
(1)
In order to replenish the imprest float, the imprest holder shall submit to the Chief
Executive the duly paid imprest cash vouchers together with the petty cashbook, a
payment voucher summarizing all transactions and the Vote Codes, updated vote
book, and a requisition for replenishment;
(2)
After approval, the requisition shall be sent to the main cashier to process the
replenishment cheque/payment instruction, while;
(3)
The paid vouchers and the detached copy of the petty cashbook shall be attached to
the bank payment voucher as supporting documents that shall later be classified
for posting to the general ledger through the abstract;
(4) The vouchers shall be cross-referenced to the General Ledger.
5.4.9.6 Retirement of imprest
There are limited situations where payments may be met out of cash, such as advance
payments to officers going out of station, or cash to meet day to day expenditure of a petty
nature by Vote Controller whereby payment by cheques/EFT would not be possible.
When an imprest is retired, as at the end of the financial year, or earlier if the imprest
holder is required to do so, the Head of Finance or any other authorised officer, as the case
may be, shall receive from the imprest-holder duly completed expenditure vouchers,
together with the balance of cash in hand making up the original authorised figure. A
receipt voucher shall be issued for the full total of the imprest accounts, which will then be
cleared. The receipt voucher shall show:
(1) the balance of cash returned
(2) the reference numbers and amounts of the expenditure vouchers submitted; and
(3) the reference number and date of the relevant imprest warrant.
The Local Governments Financial and Accounting Manual 2007
107
5.5
PURCHASES AND PAYMENTS OUTSIDE UGANDA
(1)
Where a payment has to be effected outside Uganda in foreign currency, the Vote
Controller shall prepare a payment voucher in the usual way except that the amount
in Uganda shillings shall be left out and temporality replaced by the amount
expressed in foreign currency and written in red ink. This amount shall also be
noted in the Vote Book.
(2)
The payment Voucher and supporting documents shall be sent to the Head of
Finance with a memorandum signed by the Vote Controller outlining the reasons for
the payment and stating whether payment is to be made by draft or transfer. In the
latter case the payee’s bank and account number shall be supplied.
(3)
The Head of Finance shall arrange with the Council’s bank for the payment to be
made and ascertain the total cost of the transaction in Uganda shillings; this sum
shall then be entered on the Payment Voucher, below the foreign currency figure, as
the amount of the transaction and shall be communicated to the Vote Controller for
entry on his/her copy of the voucher and in his or her Vote Book.
5.6
PAYMENT OF SALARIES AND OTHER EMPLOYEES COSTS
Employees’ salaries shall be as per proposed and approved salary structure and paid at end
of every month or at an earlier date in case of holidays.
5.6.1
Preparation of Payroll
A payroll for computation of salaries and allowances shall be prepared as per illustration
below (Note: Since Local Government payrolls are currently being prepared by Uganda
Computer Services, this illustration is for purposes of indicating what information should
be included in the payroll and how to calculate that information so that local government
staff can be able to crosscheck the payroll once it is received from Uganda Computer
Services)
The payroll shall be arranged according to departments.
Illustration EX 11: Preparing the Payroll
Assume for the month of January 200X, summarized information for staff employed in
Works Department for the District was as follows:
Employee
Mujuzi .R.
R. Nakazibwe
Maria
Basic Pay
200,000
180,000
45,000
Overtime
25,000
10,000
Housing
allowance
50,000
-
Advances
70,000
10,000
Maria is employed by the Council on a special contract of 2 years. This information to be
entered in the pay-roll is as follows:
The Local Governments Financial and Accounting Manual 2007
108
THE PAYROLL
XXXX COUNCIL
EMPLOYEES PAYROLL
Month: January……Year
Department/Station: 07 Works
Item Code: 21 - Employee Costs
Additions
Name
Scale
General
staff
salaries
211101
Shs.
Programme: 3 Water & Sanitation
Sub-programme: Water
Deductions
Allowances
Contract
Staff
salaries
211102
Gross pay
211103
-
Shs.
NSSF
5%(sundry
creditors- social
benefits)
415002
Shs.
Item
Code
Other
Total
deduct.
Taxable
Income
PAYE
Staff
Advance
Net Pay
321501
Shs.
Shs.
Shs.
Shs.
Shs.
Received
by
signature
& ID
Shs.
Shs.
Maria
45,000
10,000
55,000
2,750
-
2,750
52,250
-
10,000
42,250
Nakazibwe
180,000
25,000
205,000
10,250
-
10,250
194,750
6,475
-
188,275
Mujuzi
200,000
50,000
250,000
12,500
-
12,500
237,500
10,750
70,000
156,750
Total
380,000
85,000
510,000
25,500
-
25,500
437,000
17,225
80,000
387,275
45,000
Prepared by……………………………Salary Section
Certified by……………………………(Personnel Officer)
Passed for payment by…………………………..(Head of Finance)
Approved by…………………………(Chief Executive )
.
The Local Governments Financial and Accounting Manual 2007
109
5.6.2
Employment Costs
All payments of salaries and wages shall be made monthly.
Salaries of delegated staff are made at District or Municipal Council headquarters and will
be handled in accordance with the instructions of the line ministries.
5.6.3
Preparation and Payment of Salaries
(1) The preparation of the monthly payroll is currently being done by Uganda Computer
Services on behalf of the Local Governments until a later stage when this process will
hopefully be decentralised.
(2) Staff in the salaries subsection of each Local Governments together with the personnel
officer should however, crosscheck the payroll once it is received from Uganda Computer
services to determine its accuracy and ensure that all facts are correct. In particular, the
personnel officer should ensure that staff that have left the service of the local government
are removed immediately from the payroll and that pay change sheets are immediately
prepared and remitted to Uganda Computer Services to effect future changes. Other issues
to be checked include:
(a) Names of employees
(b) Employee’s identify number/code
(c) Salary grade/scales
(d) Allowances including overtime
(e) Any changes duly communicated to the Salaries Sub-section in writing
(3) Staff in the salaries sub-section must ensure that staff advances and other deductions are
deducted before the payment is made.
(4) Staff salaries should be paid through the individual bank accounts of staff. Therefore,
once the payroll has been checked, bank payment schedules consisting of staff that hold
accounts in specific commercial bank branches should be prepared. For each commercial
bank branch, one bank payment schedule should be prepared indicating the names on the
individuals to be paid, their account numbers and amount payable. A voucher should then
be prepared to cover each individual payment schedule; the totals of gross pay, deductions
and net pay will be extracted and entered on a Payment Voucher with the correct
expenditure and Below- the-line codes. A Certified copy of the Payroll(s) will form the
supporting document. The Head of Finance Department will draw cheque/EFT payments to
cover the total amount on each individual bank payment schedule/voucher which the Chief
Executive will endorse.
Payments of employees costs shall, as far as possible, be made by direct bank transfer
or cheque payments but where this is not possible, payments in cash shall be made and in
case of cash, payments shall be made in the presence of a witness authorized by the head of
the department or Head of Finance for this purpose and if no officer can identify him or
her, a recipient shall be required to produce proof of identity.
The Local Governments Financial and Accounting Manual 2007
110
Cash payments of personal emoluments shall, wherever possible, be made to each
employee in person; only in exceptional cases shall cash payments be made to a third party
and then only on production of an authority signed by the employee and confirmed by a
senior officer of his or her department; identification of the delegate shall be required.
(5) According to illustration 11 Exp. of the payroll, the cheque/EFT payments from the
Salaries Bank Account will be made as follows:
(a)
NSSF Contribution
The Council shall contribute an additional 10% on each employee’s Gross Pay and a
cheque/EFT payment shall be made for the entire 15% payable to National Social
Security Fund, together with schedules and account numbers of the subscribers, not
later than the 15thday of the following month. According to illustration 11 Exp, the
amount is Shs. 25,500 + 510,000* 10% = 76,500.
(b)
PAYE
A cheque/EFT payment for PAYE (Shs 17,225 as per illustration 11 Exp) will be
drawn in favour of Uganda Revenue Authority and submitted with schedules of
payers not later than the 15th day of the following month.
(c)
Recovery of Advances
Since cash was already paid out, a journal entry will be passed to record the
recovery from the beneficiaries.
(6) The journal entry to record the recovery of advances shall be as follows:
Page 20
Date
Particulars
Code
31/8/0X
General Staff Salaries
Contract staff salaries
Staff Advances Account
Being recovery of salary advances
from Maria Shs 10,000 and Mujuzi
Shs 70,000
211101
211102
321501
Folio
Dr.
Shs
70,000
10,000
Cr.
Shs
80,000
(7) Signed cheque/EFT payment instructions together with the accompanying payment
schedules will be delivered directly to each commercial bank branch involved; a copy of
the payment schedule should be endorsed by the bank by signing and stamping. The
endorsed copy must be returned to the Head of Finance and filed.
(8) Unclaimed salaries are dealt with in accordance with Financial Regulation 54(5). These
details are conditions and procedures for recording unclaimed salaries in an “Unclaimed
Salaries Register” produced as shown in Form 24 below.
The Local Governments Financial and Accounting Manual 2007
111
Form EX 24: Register of Unclaimed Salaries
XXXXX COUNCIL
REGISTER OF UNCLAIMED SALARIES
Programs
SubProgrammes
Item Code
Record of Unclaimed Salaries (Per
Payroll(s)
Date
Employee
Amount
Shs
Number
Name
Record of Collection
Date
Signature/Mark
Unclaimed Salaries Banked
Witness
Date
Receipt
No.
Amount
Shs
Total
Note: Unclaimed Salaries must be banked on the Salaries Account, if not paid within 10
working days
5.6.4
Employment Income
The details given below are extracts from the Income Tax Act, 1997. Every financial year
the Minister responsible for Finance presents a budget where some pertinent issues may be
raised affecting some of the facts stated below. The Chief Executive shall analyse the
National Budget and advise in writing the Accounts Staff on any issues in the National
Budget concerning Employee costs, benefits and any other relevant benefits, and
deductions are:
5.6.4.1 Direct Monetary Income
Valuation of Benefits in kind and taxable income
Employee’s direct monetary income will generally comprise:
(1)
Wages, salary, leave pay, payment in lieu of leave, overtime pay, fees, commission,
gratuity, and bonus, any allowances (entertainment, utilities, and welfare, housing,
medical or otherwise) as advised by the relevant authorities from time to time.
The Local Governments Financial and Accounting Manual 2007
112
(2)
Amount of discharge or reimbursement by an employer of the private/personal
expenditure to an employee.
(3)
Amount derived as compensation for termination of employment contract.
(4)
Any amount paid to an employee in respect of an agreement to conditions or
changes in the terms of employment.
(5)
A combination of all or any of the above categories comprises one’s employment
income from any one-employment source.
5.6.4.2 Definition of a Benefit in kind
(1) A benefit provided directly by the employer or indirectly through a third party under
special arrangement;
(2) A benefit provided to the employee or the employee’s associate; and
(3) A benefit provided for past, present or future employment with the employer;
An employee may earn some income in kind, in form of benefits accruing to the terms of
service; these are:
(a)
Motor Vehicles
Where a motor vehicle is provided by the employer for use by the employee wholly or
partly for both official and private purposes, the value of the benefit included in taxable
income is the private component.
(b)
Domestic Servants
Domestic servants ordinarily include housekeepers, drivers, security guards, gardeners, etc
Where the employer provides such benefits; the value of the benefit is the aggregate
amount of remunerations paid by the employer on behalf of the employee.
(c)
Meals, Refreshment and Entertainment
Where an employer provides meals, refreshment, and entertainment, to an employee, the
cost to the employer is the value of the benefit, reduced by the employee’s contribution.
The cost to the employer that is the total benefit minus employees’ own contribution is part
of taxable income of the employee.
(d) Utilities
These include facilities such as water, sanitation, telephones, electricity, etc. The value of
the benefit is the cost to the employer for each facility provided minus whatever amount the
employee contributes. The benefit is Revenue income of the employee.
The Local Governments Financial and Accounting Manual 2007
113
(e)
In a case where an employer or his agent charges interest on an employment loan at
a rate lower than the statutory rate, the value of the benefit is the relief attributed to
such reduction. The bank of Uganda provides the interest rates from time to time.
(f)
Where an employer decides to waive a debt to an employee wholly or partly, the
actual relief granted is the value of the benefit. It is Revenue income of the
employee.
(g)
Transfer of property
Where an employer transfers a property to the ownership of an employee e.g. motor
vehicle, land, plant building etc. The value of the benefit is the market value of the
property, reduced by the employee’s contribution to the cost. This benefit is Revenue
income.
(h)
Provision of Residential Accommodation (Quarters). Quarters may be provided in
kind in three main forms:
(i) House directly owned by the employer;
(ii)
House rented by the employer on behalf of the employees;
(iii)
Reimbursement of rental expenses.
In the case of category (iii), the amount of the reimbursement is the value of the benefit.
In the case of (i) and (ii), the value of the benefit is ascertained with reference to the
formula below:
(a)
The rent market value of the accommodation reduced by any payment
made by the employee or,
(b)
Fifteen percent of the employment income for the year, which includes
the market rent of the accommodation;
The value of the benefit is the lower of the above two values.
(i)
Any other benefit.
It is provided in the Income Tax Act 1997, that the value of any other benefit will be the
cost to the employer reduced by any employee’s contribution to the cost/value of the
benefit.
5.6.4.3
Employment earnings excluded from taxable employment income
The following gains/benefits are not regarded as taxable employment income:
(1)
Passage Monies on first appointment and termination of appointment. This applies
to an employee recruited from outside Uganda who is not a citizen of Uganda and is
in Uganda solely to serve the employer. Passage monies are restricted to first
appointment or termination of employment only.
The Local Governments Financial and Accounting Manual 2007
114
(2)
Discharge or reimbursement of medical expenses (this excludes medical allowance).
(3)
Life Insurance premiums paid by a tax employer.
(4)
Allowances, discharge, or reimbursement of expenses met by an employee while on
official travel.
(5)
The value of meals or refreshments provided to all employees on equal terms.
(6)
Any benefits granted by an employer to any employee whose total value is less that
Shs 10,000 in any month.
(7)
Employer’s contribution to retirement fund NSSF.
5.6.4.4
Rates of Tax: PAYE
The rates shall be determined by the Minister responsible for Finance in his/her budget
speech pronounced every financial year in the month of June. PAYE is calculated as
follows
Illustration EX 12: Calculating PAYE
Shs
Mujuzi
Gross pay
Less
NSSF 5%
Shs
250,000
12,500
Revenue income
12,500
237,500
REVENUE:
PAYE
Shs.
130,000
0%
0
The balance
107,500
10%
10,750
237,500
5.6.5
Revenue Rate
10,750
Filing the Payrolls for Custody
After posting the vouchers together with their supporting documents shall be filed
according to their numbers, dates, cheque/EFT payment instruction numbers and
departments and shall be cross-referenced to the cashbook.
When personnel records (including the payroll) have been audited, they shall be properly
stored for custody for a period of at least thirty (30) years.
The Local Governments Financial and Accounting Manual 2007
115
5.6.6
Effecting & Recording Payments for Salaries
The various payments in respect of employee costs shall be effected from the salaries and
wages (Bank) account maintained by the Council. The following bookkeeping entries shall
be effected on releasing the cheques/EFT payment Instructions.
(1)
Net Pay
Date
Particulars
Code
31/8/200X
General Staff Salaries Account
Contract staff salaries
Allowances Account
Salaries Bank Account (net total)
Being net salary paid to staff for
August
211101
211102
211103
321103
Folio
Dr.
Cr.
Shs
Shs
277,525*
32,250*
77,500*
387,275
*The PAYE paid on allowance was Shs 7,500 (75,000 X 10%); so the net pay for allowances is 85,000 –
7,500 =77,500. The contract staff salary is for Maria (42,250 – 10,000 allowances). The Net pay for general
staff salaries is then 387,275 – 32,250 – 77,500.
(2) PAYE
On payment of PAYE, a cheque/EFT payment shall be prepared in favour of Uganda
Revenue Authority.
Date
Particulars
Code
13/8/0X
General Staff Salaries Account
Allowances
Salaries Bank Account
Being PAYE recovered from
employees and paid to URA
211101
211102
321103
(3)
Folio
Dr.
Shs
9,725
7,500
Cr.
Shs
17,225
NSSF and other Pension Schemes
A cheque/EFT payment combining the amounts of 5% and 10% due to the scheme(s)
(NSSF in this case) shall be written in their favour.
Page 22
Date
Particulars
Code
31/8/0X
General staff salaries
Contract staff salaries
Social Security Contributions
Salaries Bank Account
Being 5% NSSF employee
contribution and 10% employer
contribution to NSSF
211101
211102
212101
321103
Folio
Dr.
Shs
22,750
2,750
51,000
Cr.
Shs
76,500
Notice that the employee contribution for Mujuzi and Nakazibwe is debited to the general staff salaries; that
of Maria to the contract staff salaries account while the employer’s contribution goes to the social security
contributions account (See explanation in section 15; GOU Chart of Accounts)
The Local Governments Financial and Accounting Manual 2007
116
(4)
Advances
Journal Entry to be made and to close the Advances Account shall be made. No other entry
should be made.
The Local Governments Financial and Accounting Manual 2007
117
6.0
ACCOUNTING AND CONTROL
6.1
BASIS OF ACCOUNTING
6.1.1 District and Urban Councils
As stated in the background, Districts have been preparing their financial statements on a
cash basis while the urban local governments have been using accrual concept.
The two systems have been incorporated in this Accounting Manual particularly in the
preparation of the monthly and annual financial statements. It is anticipated that the rural
local governments will gradually adopt the accrual concept for their accounting. However,
any modification as a result of gradual adoption of Accrual accounting must be
appropriately disclosed in the Notes to the Financial Statements.
Each Local Government should prescribe in detail the accounting policies used in the
preparation of the financial statements.
6.1.2
Cash Basis Accounting
Under cash basis accounting, revenues are recognized and recorded when cash is received,
and expenditure is recorded when cash is paid. Consequently the revenues not received at
the end of the financial year are treated as arrears of revenue in the following year.
Likewise the outstanding bills at the end of the financial year are not taken into the
accounts. The fixed assets purchased during the financial year are treated as revenue
expenditure and written off in the year of purchase.
6.1.3
Accrual Basis Accounting
In contrast to the cash basis of accounting, the accrual basis recognizes revenue and costs
accrued, that is as they are earned or incurred (and not as money is received or paid), and
records them in the financial statements of the periods to which they relate. In the accrual
basis of accounting fixed assets are depreciated over their useful lives, applying
depreciation rates as decided by the Council on the advice of the Chief Executive.
6.1.4
Revenue
(1)
Cash Accounting Basis
Revenue is realized, recorded in the accounting records, and reported in the financial
statements in the period when cash or equivalents have been received.
(2)
Accrual Accounting Basis
Revenue is realized when a transaction or event occurs (and not when cash or its
equivalents are received). Revenue is recorded in the accounting records and reported in
the financial statements of the period to which it relates.
The Local Governments Financial and Accounting Manual 2007
118
6.1.5
Expenditure
(1)
Cash Accounting Basis
Expenditure is recognized and recorded in the accounting records and reported in the
financial statements of the period in which cash or cash equivalents have been paid.
(2)
Accrual Accounting
Expenditure is recognized when a transaction or event occurs (and not when cash or its cash
equivalents are paid out). It is recorded in the accounting records and reported in the
financial statements of the period to which it relates.
6.1.6
Accrued Assets
These include, among others, expected revenue from billed services from which cash or
cash equivalents remain uncollected at the time of closing the financial period. The
accounting treatment for accrued assets is as follows:
(1)
Cash Accounting Basis
The accrued assets will be maintained in registers for record purposes but will neither be
recorded in the accounts nor be included in the financial statements for the period. Accrued
assets for previous years that are collected in cash in subsequent periods are recognized and
recorded in the period when cash is collected. They are reported in the financial statements
during the period in which cash or cash equivalents will have been received.
(2)
Accrual Accounting Basis
The accrued assets are recognized and recorded at the time when a transaction or event
occurs regardless of whether cash or cash equivalents have been received or not.
If cash has not been received by the end of the accounting period the balances on such
accounts are reported in the financial statements as current assets, for that period.
6.1.7
Accrued Liabilities
These include expenses such as electricity, water, telephone bills or salaries and wages that
are due but which remain unpaid as at the close of the financial period. They are treated as
follows:
(1)
Cash Accounting Basis
The unpaid expenses are recognized by listing them in memorandum registers as
commitments. They are not recorded in the books of account. However, for information
and planning purposes the schedules of the commitments and their values shall be noted
and appended to the financial statements.
(2)
Accrual Accounting Basis
The unpaid bills as at the end of the period are recognized and recorded in books of account
by means of adjustment journal entries. They are reported in the financial statements for the
The Local Governments Financial and Accounting Manual 2007
119
accounting period in which the transaction or event occurred regardless of whether cash has
been received or not.
6.1.8
Non- produced and Fixed Assets
Non-produced assets and fixed Assets are separate account classifications in the chart of
accounts. Both represent those assets which yield benefit to the Council for more than one
accounting period. Non-produced assets are natural resource assets such as land and forests
owned by the local government. Fixed assets on the other hand are produced assets and are
generally broken down into three categories:
(a) Buildings and structures (Non-residential buildings, residential buildings, roads and
bridges, other structures).
(b) Machinery, furniture and vehicles (transport equipment, machinery and equipment,
furniture and fixtures, aircrafts).
(c) Other fixed assets
(1)
Cash Accounting Basis
Under the cash accounting basis, expenditure incurred in acquiring assets is written off to
the revenue account of the particular financial period. However, for their day-to-day
management, a fixed assets register shall be maintained as required under regulation 81-88.
(2)
Accrual Accounting Basis
The assets are not fully charged to revenue in the period of acquisition but are carried in the
books of account over their useful economic lives. A depreciation charge is computed
annually over the assets’ economic useful life and offset against the revenue of that period.
A fixed assets register shall be maintained as required under regulation 81-88.
6.2
DOCUMENTARY EVIDENCE IN ACCOUNTING
Every accounting transaction regardless of the amount of money involved must be executed
in writing. The documents used in accounting must be processed through various levels of
established authority. Each level signifies consent and approval that the transaction was
genuine and may be subject to independent verification at a later date.
There are two types of accounting documents:
(1)
Unused documents
Unused documents must always be recorded in respective registers, and kept under safe
custody. They are issued on approved requisition, and signed for by both the requisitioning
and issuing officers.
The Local Governments Financial and Accounting Manual 2007
120
(2)
Used documents
All used documents should be properly numbered, cross-referenced to each other and to the
account where the entry has been posted. Those relating to the same transaction must be
batched together, filed in chronological order, and kept in safe and secure place for future
reference. Used accounting documents must not be removed from their files or shifted to
other locations without written authority of the Chief Executive or his representative.
Where this is done, evidence of authority must be filed for future reference.
6.3
AN ACCOUNT
An Account is a record in a ledger form summarizing all the transactions that have taken
place to a particular event or activity or asset to which that ledger record relates. It can be
specified as John’s Account, Debtors’ Account, Wages Account, Salaries Account,
Furniture Account etc.
6.3.1
Types of Accounts
There are three types of Accounts:
(1)
Personal Accounts; these comprise of both debtors and creditors. Debtors are
people who owe the organization (Council) money e.g. a person to whom the
Council has sold goods or extended services on credit.
(2)
Real or property Accounts; are those that refer to assets such as plants, machinery,
stores, stationary, furniture and cash.
(3)
Nominal Accounts; are those that relate to incomes (or revenues) and expenditure
such as fees, revenue, wages, salaries, procurement, rates, rent, electricity charges,
etc.
6.3.2
Bookkeeping
It is the systematic recording of all monetary and/or money-worth transactions pertaining to
a named organization (council) or to a project or activity of an organization as and when
they (transactions) take place.
“Systematic” implies that the recording follows a recognised format e.g. as prescribed in
the Financial and Accounting Regulations or any other relevant regulations.
6.3.3
Double Entry Bookkeeping System
Double entry is a system of book-keeping applicable to both personal and impersonal
accounts. Every transaction that results in a transfer of money or monies worth involves a
two-fold aspect;
(1)
The giving of a benefit;
(2)
The receiving of that benefit.
The Local Governments Financial and Accounting Manual 2007
121
It is imperative to handle both of them simultaneously as a giver’s action leads to a receiver
and a receiver creates a giver. The giving and receiving, in this case, take place between
two accounts and in the same set of books of a given organization (local government in this
case).
For example, if John purchases furniture from the Council, the Furniture account has to
reflect the parting of the benefit (the actual furniture) and John’s Account has to reflect the
gaining of that furniture. Hence to have a complete record of the transaction there must be
two entries to the concerned accounts. The transaction has therefore to be booked up twice,
one entry being posted in the receiving account (John’s) and another entry of a similar
amount posted in the giving Account (furniture). Thus, every debit entry is accompanied
by a corresponding credit entry.
6.3.4
The Financial Transaction
They are the monetary or money-worth events which are of relevance to the organization
(the council) or to a project of the Council or activity of the Council for which books of
account are kept. They are identified, journalised and later posted to the books of account
(ledgers) by the person doing book keeping (the book-keeper). The money-worth events
have to be translated into monetary values before they are journalised and posted.
6.4
LOCAL GOVERNMENT BOOKS OF ACCOUNT/ RECORDS
Local Government Councils will maintain the following books of account/records.
(1)
Journal
(2)
Cash books
(3)
Vote books
(4)
Abstracts
(5)
General Ledger and Subsidiary ledgers
(6)
Registers: for example Assets, Contracts, Revenue etc.
6.4.1
The Journal
A journal is one of the books of primary entry. The journal keeps a record of unusual
movement between accounts. It is used to record any double entries made which do not
arise from other books of prime entry. It can be used to record the following:
Opening of the accounts at the beginning of the financial year, closing of the accounts at the
year end, Supplementary provisions, Reallocations, Correction of errors, Transfer between
accounts.
All journal vouchers should be checked, before authorisation, by Head of Finance or an
Officer authorised by him.
The Local Governments Financial and Accounting Manual 2007
122
6.4.1.1 Journal Voucher
(1)
Whenever it is necessary to make journal entries in the accounts that does not entail
the receipts or payment of cash, a journal voucher shall be prepared in a format
shown in 24 Acc.
The voucher shall show the reason for the adjustment.
(1)
Journal vouchers shall be numbered serially.
(2)
A copy of the journal voucher shall be passed to the officer controlling the votes to
be debited and credited.
(3)
The transactions shown on journal voucher (Form AC 25)shall be entered in the
vote book and after being passed for inclusion in accounts shall be passed to the
abstracts and to the subsidiary ledgers where appropriate.
The Local Governments Financial and Accounting Manual 2007
123
Form AC 25: Journal Voucher
XXXX COUNCIL
JOURNAL VOUCHER
Date ………………
Department……….
JV Number………………………..
Account Code
Account Name
Debit
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
TOTAL
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
……………………
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……………………
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……………………
Credit
……………………
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……………………
……………………
……………………
……………………
……………………
……………………
……………………
Narrations
CHECKED BY:…………………………
STAMP
DATE……………………………………
AUTHORISED BY:……………………….
6.4.1.2 Journalising the Payroll
The procedures of preparing the payroll are similar under both bases, differences arise in
recording. Starting with the payroll in the last example, the procedures are given below:
The approved payroll shall be journalised to record the employees’ costs as follows:
Illustration AC 13: Journalising the Payroll
Date
Particulars
Code
Dr.
Shs
31/7/0X
General staff salaries ( Gross)
211101
380,,000
Contract staff salaries (Gross)
211102
45,000
Allowances (gross)
211103
85,000
Social security contributions
212101
51,000
Cr.
Shs
Salaries Bank Account (PAYE)
321103
17,225
Salaries Account (NSSF)
321103
76,500
Advances Account-(Deductions)
321501
80,000
Salaries Bank Account (Net pay)
321103
387,275
Totals
561,000
561,000
Narration: To record salaries and salaries & wages for the month of April,
2000 as per payroll.
These entries recognize the salaries and wages as an expense and the various
payee/beneficiaries as creditors of the Council. The journal(s) shall be posted to the
The Local Governments Financial and Accounting Manual 2007
124
General Ledger as per illustration 1.37 and cross-referenced. The account General Staff
Salaries (211101) , contract staff salaries (211102) and Allowances (211103) are sub-subsub items of the sub item Wages and Salaries (code 211). Therefore, at the time of
summarising the accounts, these accounts will be consolidated into one account with the
following entry
Particulars
Code
DR
Wages and Salaries
211
510,000
General Staff Salaries
211101
Contract staff salaries
211102
Allowances
211103
Totals
510,000
Narration: To consolidate the various components of Wages and Salaries into one
account.
6.4.2
CR
380,000
45,000
85,000
510,000
Bank Accounts, Cashbooks, Abstracts and Ledger Accounts
(1) A separate cashbook is maintained for each bank account opened. Local councils shall
maintain bank accounts as follows;
(2) A Collection Bank Account (Code 321106) This is where funds for all council’s revenue
sources are banked before being transferred to the various department expenditure bank
accounts i.e. local revenue plus all Central Government grants.
(3) One bank account for all salaries.(This is an expenditure bank account that shares the
same code with the other expenditure accounts of the local government – code 321103 –
expenditure accounts) However for each sector/department ledger accounts will be
maintained for salaries.
(4) One bank account for each department. (Each department expenditure bank account
uses the code 321103- expenditure account) Ledger accounts should be maintained for
Recurrent and Development transfers .. It may not be necessary for Local Governments to
have many bank accounts after introducing strong commitment controls and maintaining
ledger accounts.
(5) For purposes of producing financial statements, the various expenditure bank accounts
should be consolidated into account code 321103 – Expenditure Accounts
(6) A Donor account, where a Donor makes a request to open a separate bank account, then
such an account may be opened.
The Local Governments Financial and Accounting Manual 2007
125
A Summary of proposed bank accounts to be maintained by local governments;
Local Revenues
Central Government
Transfers
Donors and
NGO funds
GENERAL
FUND
ACCOUNT
Operational/Sector (Department)
Accounts-As per cost centres in CoA
1. Administration
2. Finance
3. Statutory Bodies
4. Production
5. Health
6. Education
7. Works
8. Natural Resources
9. Community Based Services
Salaries
Account
Property Rates
Donor Accounts
Funds Inflow
Funds Outflow
6.4.2.0 Banking and Bank Accounts
(1) Council bank accounts may only be opened in the official designation of the local
government council on the authority of the Chief Executive.
(2) Council bank accounts shall be operated by the Chief Executive and the Head of
Finance of the respective councils.
(3) Agency and projects accounts shall have the Head of Department appointed as a vote
controller and third signatory to the accounts.
(4) The Chief Executive at district and municipal council level shall appoint signatories
from council employees in respect of all levels of council bank accounts, and a
councillor, chairperson, deputy chairperson, the speaker or deputy speaker shall not be
a signatory. The Chief Executive at the District shall appoint signatories at the Town
Councils within his/her area of jurisdiction.
(5) The Council Executive at village level shall authorize the opening of the bank accounts
and the signatories shall be the village chairperson and the parish chief.
The Local Governments Financial and Accounting Manual 2007
126
The signatories that may be appointed by the Chief Executives at the various council levels
are given below:
(i)
(ii)
Bank Account
General Fund Account
Operational/Sector A/Cs
CE & HoF
CE + HoF + HoD
Signatories
(iii)
Salaries Account
CE & HoF
(iv)
(v)
(vi)
Property Rates Fund A/C
Agency/Projects Accounts
Sub Counties
CE & HoF
CE + HoF + HoD
CE(S/County Chief) & HoF (Sub Accountant)
(vii)
Town Councils
CE(TC) & HoF (SFO)
(viii)
Divisions
Asst. TC & Sub Accountant
(ix)
Counties
Asst. CAO & HoF (Sub-Accountant of the S/C )
(x) Parishes
Asst. CAO & Parish Chief
(xi) Villages
Village Chairperson & Parish Chief
(xii) Urban Wards
Deputy TC + Town Agent
Note: Deputy TC refers to the Assistant to the TC at the Headquarters
6.4.2.1 Cashbook, Abstract and Ledger Accounts posting
The Cashbook and the Abstract are the main books of prime entry. Both books are posted
directly from the receipts and expenditure vouchers. They complement each other in such a
way that where for example a debit entry is posted to the cashbook, the corresponding
credit entry is processed through the Abstract for posting to the General Ledger.
6.4.2.2 The Cashbook
Local Councils shall maintain a separate cashbook for each bank account they operate. The
cashbook comprises two major parts, the debit side for receipts; and the credit side for
expenditure.
6.4.2.3 Opening the Cashbook
(1) At the beginning of each financial year, the cashbook(s) shall be opened with the
previous year’s balances of cash at hand or at bank.
(2) Each bank account shall be maintained in its own cashbook. The balance on each bank
account shall be entered individually. The following is an illustration on opening a
cashbook
The Local Governments Financial and Accounting Manual 2007
127
Illustration AC 14:
Opening the Cashbook
The details of the Councils collections bank account in Stanbic are as given below for the
year beginning 1 July, 2000. On the same date the Council had Shs. 300,000 as cash on
hand.
Account title
Bank
Bank Account
Code
Current Account
Stanbic
01-6756
321106
Shillings
Remarks
50,000,000
Cash on hand
300,000
The balances on each account will be posted in the respective cash or bank column of the
Cashbook.
Opening the Cashbook
XXXX COUNCIL
COLLECTIONS CASHBOOK
Code……….321106
Folio……………
Dr. Receipts
Date
Particulars
July 1-00
Bal. B/F
Payments Cr.
Folio
Cash
A/C
300,000
Current
A/C UCB
01-6576
50,000,000
Total
July
Particulars
Cheque/
EFT A/C
Cash
A/C
Bal b/F
-
-
Current
UCB 016756
6.4.2.4 Recording the Cashbook
(1)
Cash Receipts and Banking
(a)
All amounts received, whether in form of cash, cheques or EFT instructions, shall
be entered on the
receipts side of the Cashbook i.e. Debited.
(b)
When cash is banked, the entry that removes cash from the cash account to bank
account is entered in the credit side of the cash column. The reference is given as
“C”, contra.
(c)
When banking has been made, the entry to record the banking is entered on the
debit side within the bank column. The reference is “C” contra.
(d)
Some monies may be deposited by the payer directly into the bank account to the
credit of the Council. On production of the bank pay-in-slip(s), the payer will be
issued with an acknowledgment receipt by the main cashier after confirming the
credit on the account. Using the acknowledgement receipt issued and the bank payin-slip(s) the amount shall be cross-referenced like any other entry. The amount
shall be classified through the Revenue Abstract for the credit of the appropriate
account in the General Ledger.
(e)
Other monies may be received by direct credit to the bank account without interest
received. In this case, on checking the bank statement or obtaining a credit advice
from the bank an acknowledgement receipt shall be made as a basis of recording the
amount into the cashbook and to the respective ledger account. The amount shall be
entered on the debit side of the cashbook, within the respective bank account
The Local Governments Financial and Accounting Manual 2007
128
column, and cross-referenced. The receipt shall also be classified through the
Revenue Abstract for credit of the appropriate account in the General Ledger.
(f)
The cashbook should be adjusted for interest, bank charges and other direct charges
or credits to the bank after the bank reconciliation.
(2)
Cheque Payments
When a cheque is issued the cheque number shall be entered in the Cashbook in sequential
numerical order.
Illustration AC 15: Posting of a Cashbook
Assume the following transactions for the Council are posted to the cashbook for bank A/C
01-656 maintained in STANBIC BANK.
Date
Receipt No.
3/7/00
007
Amount
Shs
200,000
10/7/00
008
14/7/00
24/7/00
Date
Vr. No.
Payee
Cheque No.
Amount
4/7/00
001
ABC Co.
0026
2,500,000
700,000
4/7/00
002
Imprest
0027
500,000
009
500,000
5/7/00
003
CBS
0028
1,500,000
010
2,800,000
26/7/00
004
Juma
0029
8,000,000
The Local Governments Financial and Accounting Manual 2007
129
The Cashbook shall be posted as shown below:
XXXX COUNCIL
CASH BOOK
Dr.
Date
Cr.
Particulars
Folio
Rct.
No.
July
1
Opening balance b/f
July
2
Receipts
007
Banking
Receipts
009
Banking
Receipts
008
July
3
July
14
July
10
July
24
July
31
Bank
Shs A/C
01/6756
50,000,000
200,000
“C”
Total
Shs
Date
Particulars
Folio
Vr.
No.
Chq.
No.
July 3
Banking
“C”
July 3
July 4
Banking
ABC Co.
‘C”
July 4
Imprest
July 4
July 5
Banking
Banking
July 5
CBS
003
0028
July
26
Juma
004
0029
Cash
Shs
Bank
Shs A/C 01-6756
Total
300,000
200,000
001
0026
2,500,000
002
0027
500,000
300,000
500,000
“C”
200,000
700,000
‘C”
“C”
010
Banking
Direct Transfer
Cash
Shs
300,000
Banking
Banking
Receipts
Chq.
No.
700,000
500,000
‘C”
‘C”
500,000
700,000
1,500,000
2,800,000
‘C”
2,800,000
011
1,000,000
Banking
Bank charges
Balance c/f
“C”
------------4,500,000
========
2,800,000
-----------4,500,000
=======
The Local Governments Financial and Accounting Manual 2007
8,000,000
30,000
42,970,000
--------------55,500,000
=========
130
6.4.2.5 Checking of Cash Book
(1)
At the close of business every cash book shall be ruled off and balanced and the
cash and
bank balances carried forward.
(2)
and
The Head of Finance or an officer other than the cashier shall check the cash book
balance it daily.
(3)
The cashier shall check his cash with the cash balance shown in his cash book at the
close of each day’s business.
6.4.2.6 Bank Reconciliation
(1) At the end of each month a statement of the current account of the administration shall
be obtained from the bank. The statement shall be checked with entries appearing in the
bank column of the cash book. Expenditures vouchers shall be prepared to cover bank
charges such as cheque books and commission, and receipt vouchers to cover credits such
as interests on fixed deposits. The expenditure/receipt vouchers shall be posted in the cash
book before bank reconciliation is prepared.
(2) The bank reconciliation shall be prepared by an officer of the Local Government
Council appointed by the Head of Finance who shall not be the cashier and shall be entered
into the cash book not later than fifteen days after the end of each month. The statement
shall be certified as correct by the Head of Finance.
(3) The cashbook entries for Current Account 01-6756 under accounting code 06 is
compared with the specimen of the bank statement below, for purposes of preparing a bank
reconciliation.
Illustration AC 16: Cashbook (Bank Column only)
XXXX COUNCIL
CASH BOOK
Dr.
Cr.
Receipts
Shs.
Payments
July:
Shs.
July:
1
Balance b/f
2,500,000
3
Cheque 0022
375,000
8
Deposit
875,000
8
Cheque 0023
563,000
15
Deposit
500,000
14
Cheque 0024
188,000
22
Deposit
1,187,000
21
Cheque 0025
1,112,000
29
Deposit
*375,000
29
Cheque 0026
*400,000
30
Cheque 0027
*825,000
31
Balance c/f
1,974,000
5,437,000
5,437,000
The Local Governments Financial and Accounting Manual 2007
131
XXXX COUNCIL
COMPLETED CASHBOOK
Dr.
Cr.
Receipts
Shs.
Payments
July:
Shs.
July:
31
Balance b/f
31
Direct credit
1,974,000
31
Standing Order (Rent)
125,000
31
Bank Charges
31
Balance c/f
150,000
80,000
1,869,000
2,099,000
2,099,000
(a)
All debits in the bank statement shall be ticked (√) against credits in the cashbook
(b)
Credits in the bank statement shall be ticked (√) against the debits in the cashbook
(c)
The outstanding items on both the cashbook and bank statement may be identified
by (*)
(d)
The asterisked items in the bank statement are then incorporated in the cashbook
(see
Illustration Ac 18 below)
(e)
The asterisked items in the cashbook will now appear in the bank reconciliation
statement (see Illustration Ac 19 below).
Illustration AC 17: Bank Statement
XYZ BANK LTD
Bank Statement
XXXX DISTRICT
Current Account 10.6776
31.07.2000
Dr.
Cr.
Balance
July:
1
Balance
5
Cheque 0022
10
Deposit
2,500,000 Cr
√375,000
2,125,000
√875,000
3,000,000
Cheque 0023
√563,000
2,437,000
16
Cheque 0024
√188,000
2,249,000
17
Deposit
23
Cheque 0025
24
Deposit
Standing Order
25
Direct Credit
30
Bank Charges
√500,000
√1,112,000
1,637,000
√1,18,000
*150,000
2,824,000
2,674,000
*125,000
*80,000
2,749,000
2,799,000
2,719,000
The Local Governments Financial and Accounting Manual 2007
132
END OF STATEMENT
Per Pro XYZ BANK LTD
(f)
Using the illustrations above and asterisks to denote the out-standing items in both
records, the reconciliation statement for July 2000 shall be as follows:
(g)
Bank reconciliation statements shall be checked and initialled by the Head of
Finance
within fifteen days, after the month end.
Illustration AC 18: Bank Reconciliation Statement
XXXX COUNCIL
Bank Reconciliation Statement as at 31.7.2000
Bank Account 10-6776
Shs
Balance per bank statement
Add: Deposit not yet credited
Subtract:
Unpresented Cheques:
Cheque 0026
Cheque 0027
Balance per completed Cashbook
Prepared by:……………. Date………………..
Checked by:…………….
Date………………..
Shs
2,719,000
375,000
3,094,000
400,000
825,000
1,225,000
1,869,000
Approved by:………………..
…………………………(HoF)
Date…………………..
6.4.2.7 The Abstract and Ledger Accounts
(1)
Abstract
The abstract shall be used as a medium of classifying data for purposes of posting to the
General Ledger accounts. Under a manual accounting system it will consists of two types:
(a)
The Revenue Abstract that classifies receipts of revenue per programme, subprogramme and account codes.
(b)
The Expenditure Abstract, which classifies expenditure items per programme, subprogramme and account code.
(c)
Posting to the Abstract is made from source documents, such as receipts for the
Revenue
Abstract, and payment vouchers for the Expenditure Abstract.
(2)
Ledger Accounts
A Council shall maintain ledgers in accordance with the provision of the Chart of Accounts.
The Local Governments Financial and Accounting Manual 2007
133
(3)
Subsidiary Ledger
Subsidiary ledgers shall be maintained to cover particular categories or groups of individual
accounts. For example a Council maintaining its books of account on accrual basis may
maintain a subsidiary ledger for fixed assets, debtors, creditors etc. Tewhe accounts in the
subsidiary ledger shall be balanced monthly and the balances agreed with the relevant
control accounts in the General Ledger. For example if a subsidiary ledger is maintained
for debtors, there will be a Debtors control account in the general ledger. When preparing
the financial statements at the end of the year, the general ledger balances will be used.
(4)
General Ledgers
(a)
A General Ledger shall be a binder, file book or computer printouts that contain
several
ledger accounts for recording financial transactions.
(b)
General Ledger Accounts comprise two major parts; the debit and the credit sides.
(c)
The debit side of an account normally records increases in assets, expenditure, and
losses. It also records reduction in liabilities, revenue, and reserves.
(d)
also
The credit records increases liabilities, income, revenue, and gains and reserves. It
records reduction in assets, losses, and expenditure.
(e)
Each entry posted to the ledger is given a brief description under the “Particulars
Column”
(f)
for
The posting is cross-referenced under the folio column to the source document used
posting.
6.4.2.8 Posting of Abstract
(1)
There are neither opening nor closing balances in the Abstract, except the balances
carried from one page to another during the month.
(2)
At the end of each month the Abstract shall be totalled according to the
classifications made, and posted to the relevant programmes, sub-programmes, and account
codes in
the General Ledger.
(3)
Each entry posted from the Abstract to the General Ledger Account shall be
referenced
to the supporting voucher, receipts, and or any other documentation.
6.4.2.9 Monthly Proof of Abstract
(1) Since the Abstract(s) and Cashbook(s) are each posted directly from the same voucher
or receipt as the source documents and with the same information, reconciliation shall be
prepared to ascertain the accuracy of their recording.
(2) The procedures to prepare the monthly proof of Abstract are as follows:
(a)
List down all the reconciled opening bank and cash balances at the beginning of the
month.
The Local Governments Financial and Accounting Manual 2007
134
(b)
Obtain their totals.
(c)
cash
Deduct the credits (overdrawn accounts) from the debits to obtain the net opening
and bank balances.
(d)
Add total revenue received as per revenue abstract to the net cash and bank
balances.
This gives total cash available for the month.
(e)
Add any advances recovered and deposits received.
(f)
The total is overall cash receipts for the month.
(g)
Subtract the following from the total cash receipt:
a. Total expenditure as per expenditure abstract(s)
b. Advances given in the month
c. Deposits given.
The difference should be the closing cash and bank balances.
(h)
List down the cash, and bank balances at the end of the month. The result should be
equal to the difference obtained in (g) above.
Illustration AC 19: Proof of Monthly Abstract
XXXX COUNCIL
PROOF OF MONTHLY ABSTRACTS AS A T 31st JULY 200
Balance of cash and bank at the beginning of the month
Shs
Shs
Shs
A/C No.
“ Cash
“XXX2
1,072,005
“XXX3
“XXX4
744,385
“XXX5
17,268,325
Overdraft “XXX6
122,000
Overdraft “XXX7
5,852,006
24,631,450
“XXX8
Fixed Deposit “XXX9
(266,828,214)
135,794,080
Sub Total
7,000,000
ADD: Revenue for month Per Abstract
ADVANCE-Recovered
DEPOSIT-Received
11,782,000
(74,420,421)
90,344,286
1,227,706,244
DEDUCT: Payments
EXPENDITURE per Abstracts
102,126,286
1,255,412,109
ADVANCE-Given out
DEPOSIT-Given out
5,446,700
1,040,481,983
90,494,286
Balance of cash & bank at end of month
Analysis of cash and bank balances
95,940,986
(1,136,422,969)
-------------------
A/C No. Cash
118,989,140
“
XXX2
“
XXX3
585,994
“
XXX4
4,351,323
“
XXX5
122,000
“
XXX6
201,000
===========
The Local Governments Financial and Accounting Manual 2007
135
“
XXX7
5,513,171
“
XXX8
11,346,225
60,967,481
Fixed Deposit XXX9
28,901,946
7,000,000
-------------------118,989,140
===========
6.4.2.10
Recording Employee Costs to the Abstract
The paid salaries voucher supported by payrolls shall be posted to the abstract. Using
illustration 1.30 above posting to the abstract shall be as follows:
Illustration AC 20: Posting the Payroll to the Expenditure Abstract
XXXX COUNCIL
EXPENDITURE ABSTRACT SALARIES AND WAGES
Sheet No. ABS 03
Month of……………….
Date: 31-8-
2000
Department 07-Works
Programme:
3 Water & Sanitation
Station………….
Code 211101
Vr.
Shs.
009
387,275
Code 211103
……….
Vr.
Vr.
Shs.
Shs.
Vr.
Shs.
Code 212201
………….
Totals
Vr.
Vr.
Vr.
Shs.
Shs.
387,275
010
80,000
013
51,000
131,000
J/E
Total
011
17,225
17,225
013
25,500
25,500
430,000
80,000
51,000
561,000
Note: The total for employee costs exceeds gross pay by Shs. 51,000 which is the
employers’ contribution to NSSF. i.e. 10% of 510,000, the amount of gross pay in
illustration 11Exp.
The Local Governments Financial and Accounting Manual 2007
136
6.4.2.11 Posting employee costs to the General Ledger
Illustration AC 21: Posting Employee costs to the General Ledger
Entries in the ledgers will appear as follows
(1)
General Ledger
Account Name: General Staff Salaries
Number: 211101
Account
Ledger sheet No.
52
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
Staff advances
Salaries Bank Account (net pay)
Salaries Bank Account (PAYE)
Salaries Bank Account (NSSF)
FOLIO
JV 1
JV1
DEBITS
CREDITS
BALANCE
DR
70,000
347,525
357,250
380,000
70,000
277,525
9,725
22,750
Account Name: Contract Staff Salaries
Number: 211102
CR
-
Account
Ledger sheet No.
53
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
Staff advances
Salaries Bank Account (net pay)
Salaries Bank Account (NSSF)
FOLIO
JV1
DEBITS
CREDITS
BALANCE
DR
10,000
42,250
45,000
10,000
32,250
2,750
Account Name: Allowances
Number: 211103
CR
-
Account
Ledger Sheet No.
54
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
Salaries Bank Account (net pay)
Salaries Bank Account (PAYE)
FOLIO
DEBITS
CREDITS
BALANCE
DR
77,500
85,000
77,500
7,500
CR
-
Notes
(2) The total of balances on the three accounts above is Shs 510,000 which is the total wage bill
before the employer’s NSSF contributions are added on.
(3) The Salaries Account which the local council maintains for the purpose of paying salaries is one
of several expenditure Bank accounts maintained by the council
(4) The Allowances Account should be used for posting all personal lump sum cash payments such
as for overtime, honoraria, bonuses, duty& responsibility, leave, housing etc (See Section 15 –
GOU Chart of Accounts)
Account Name: Social Security Contributions *
212101
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
Salaries Bank Account (Employer
contributions)
FOLIO
Account Number
DEBITS
51,000
CREDITS
-
BALANCE
DR
51,000
CR
-
The Local Governments Financial and Accounting Manual 2007
137
* This account should only be debited with the employer’s social security contributions. The
contributions of employees are debited to the general and contract staff salaries respectively (See
Section 15- explanations – GOU Chart of Accounts)
Account Name: Staff Advances
Account
Number 321501
DATE
DESCRIPTION
FOLIO
DEBITS
CREDITS
BALANCE
DR
1/7/0X
Balance b/f
195,000*
195,000
31/08/0X
General staff salaries
70,000
125,000
Contract staff salaries
10,000
115,000
* Assume the opening balance on this account was Shs 195,000. The staff advances account is a control
account for the individual advances account in the advances ledger
CR
-
The Journal Voucher, Abstract and the Cashbook shall be cross-referenced to the respective
General Ledger Accounts.
(2) In the Staff Advances Subsidiary Ledger
This ledger should be used to keep the personal accounts of the individual staff members
who have received salary advances from the Council. The total balances on these individual
accounts should equal to the balance on the staff advances account 321501 above.
Account Name: Maria
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
Contract
staff
(deduction)
FOLIO
DEBITS
CREDITS
10,000
salaries
10,000
BALANCE
DR
10,000
0
CR
Account Name: Mujuzi
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
General
staff
(deduction)
FOLIO
DEBITS
CREDITS
70,000
salaries
20
70,000
BALANCE
DR
70,000
0
CR
Account Name: Oluka Peter*
DATE
DESCRIPTION
1/7/0X
31/08/0X
Balance b/f
General
staff
(deduction)
FOLIO
DEBITS
CREDITS
115,000
salaries
0
BALANCE
DR
115,000
115,000
CR
*This account has been included to ensure that the Staff advances account balances with the individual
balances in the staff advances subsidiary ledger.
The Local Governments Financial and Accounting Manual 2007
138
6.4.2.12
Posting Employee Costs to the Cashbook
The paid salaries vouchers shall be posted to the cashbook as follows:
Illustration AC 22: Posting the Salaries and Wages to the Cashbook
XXXX COUNCIL
SALARIES BANK ACCOUNT (SALARIES AND WAGES) CASHBOOK
Code: 321103
DATE
DESCRIPTION
1/7/0X
Balance b/f
28/07/0X
Collection
FOLIO
accounts
(General
DEBITS
CREDITS
400,000*
BALANCE
DR
400,000*
500,000*
900,000
CR
-
Fund)
31/08/0X
General staff salaries (net salary)
JV 1
277,525
622,475
General staff salaries (PAYE)
9,725
612750
General staff salaries (NSSF)
22,750
590,000
Contract staff salaries (net)
32,250
557,750
2,750
555,000
77,500
477,500
7,500
470,000
51,000
419,000
Contract staff salaries (NSSF)
Allowances (net)
Allowances(PAYE)
Social
security
contributions
(Employer)
Totals
900,000
481,000
*Shs 400,000 is assumed to have been the opening balance and a further Shs 500,000 was transferred to the
salaries account from the collections bank account
Note: Although total expenditure is Shs 561,000, the amount posted in the Cashbook is Shs
481,000. Shs 80,000 for advances was already posted to the cashbook when the advances
were paid.
6.4.2.13
Posting Imprest Vouchers to the Abstract
(1) At the end of the financial year, the Vote Controller shall account for the imprest and
refund any outstanding cash.
(2) The cash shall be handed over to the main cashier and receipted, the names of the
imprest holder and re-banked. The paid vouchers shall be processed and classified
through the abstract.
(3) Assume cheque No. 0002 of Stanbic Bank was paid by voucher 45 for Shs. 170,000
to replenish the imprest of the internal auditor this will be posted to the abstract of the
month as follows:
The Local Governments Financial and Accounting Manual 2007
139
Illustration AC 23: Posting Imprest Expenditure to the Abstract
XXXX COUNCIL
EXPENDITURE ABSTRACT
Folio No. ABS2
Abstract of expenditure for the Months of April
Date………………..
Department 11 : Internal Audit
Sub-programme: Internal Audit
Station: Head
Office
Code
221007
221011
221009
222001
Vr.
Shs.
Vr.
Shs.
Vr.
Shs.
Vr.
Shs.
45
15,000
45
25,000
45
10,000
45
120,000
Total
15,000
25,000
10,000
………..
Vr.
Shs.
………..
Vr.
Shs.
………..
Vr.
Shs.
120,000
(4) The abstract will be posted to the General Ledger as follows:
Illustration AC 25(a): Posting Imprest Expenditure to the General Ledger
XXXX COUNCIL
Ledger Sheet No. 0005
Department: 11 Internal Audit
Sub-Programme: Internal Audit
Item:
Books, Periodicals & Newspapers -
221007
Date
Particulars
Folio
30.4.00
April
abstract
ABS2
6.4.2.14
Dr.
Shs
15,000
Cr.
Shs
Balance
Shs.
15,000
Posting Stamp
For purposes of authenticating the postings to various books a posting stamp may be
designed by the Council to be affixed on the documents that have posted. The stamp may
be as follows:
The Local Governments Financial and Accounting Manual 2007
140
Form AC 26: Posting Stamp
XXX COUNCIL
POSTING STAMP
Initial
Date
1. Posting to Abstract by…………………………………
2. Posting to Cashbook by………………………………
3. Posting to General Ledger by………………………….
4. Posting to Subsidiary Ledger by………………………
6.4.2.15
Posting the Paid Cheque to the Expenditure Abstract
(1)
All paid cheque vouchers supported by their attachments shall be classified in the
expenditure abstract.
(2)
The amounts shall be charged to the correct account codes.
(3)
Using the information in a table bellow and assuming there were other cheque
payments in the month, the posting to the expenditure abstract is as demonstrated in
Illustration Ac 26: below.
Illustration AC 25(b): Posting of Expenditure Abstract
Assume a council had the following transactions
Date
Vr.
Chq.
Bank
To whom paid
No
No.
16.04.00 010
145
Stanbic Shell oils
20.04.00 021
180
Bank
28.04.00 029
191
Stanbic Stationers
Code
Purpose
Amount
Shs
Susan
Shell Ntinda
030
Bank
031
Stanbic MTN Uganda
032
Bank
Mukasa Deo
UEDCL
227004 Lubricants
300,000
221011 File covers
250,000
227004 Petrol
1,6000,000
222001 Phone bills
5,400,000
227001 Night
1,500,000
223005 allowance
7,000,000
Power Bill
The Local Governments Financial and Accounting Manual 2007
141
The expenditure abstracts of the above transactions is shown bellow
XXXX COUNCIL
EXPENDITURE ABSTRACT
Folio No: ABS 1
Abstract of expenditure for the month of April – 2000
Department 07: Works
Code
Vr.
Shs.
Date 30-4-2000
Programme: 3 Water
Station………………..
221011
222001
223005
227001
227004
………
Total
Vr.
Shs.
Vr.
Vr.
Shs.
Vr.
Shs.
Vr.
Vr.
Totals
006
4,750,000
009
280,000
014
1,200,000
006
1,500,000
021
250,000
030
5,400,000
032
7,000,000
031
1,500,000
Total
5,000,000
Shs.
5,680,000
8,200,000
Shs.
Shs.
7,730,000
010
300,000
14,450,000
029
1,600,000
1,600,000
1,900,000
23,780,000
3,000,000
Prepared by……………………………………………………
Date………………………………………………………………….
Checked by……………………………………………………
Date………………………………………………………………….
Approved by…………………………………………………..
Date………………………………………………………………….
(4) The abstract page or folio number shall be cross-referenced to the payment voucher.
(5) The information posted in the abstract shall be cast and cross-cast.
(6) After posting to the abstract, the same vouchers shall be posted to the Cashbook.
6.4.2.16
Posting to the General Ledger
(1) At the end of each month, the total of each item code that has been classified in the
expenditure abstract shall be posted in the General Ledger.
(2) As the abstract is prepared up to the end of the month, the date of posting to the General
Ledger is the last day of the month.
(3) Using Illustration 27 Acc data, the classified accounts shall be debited to the General
Ledger Accounts as follows:
Illustration AC 26: Posting to the General Ledger
XXXX COUNCIL
WORKS DEP’T GENERAL LEDGER
Department: Works 07
Ledger Sheet No. 0001
Item: Fuel, Lubricants & Oils 227004
Section: 3 Water
Date
Details
Folio
30-4-00
April Abstract
ABS 1
Debit
Credit
Shs
Shs
1,900,000
Balance
Shs
1,,900,000
The Local Governments Financial and Accounting Manual 2007
142
XXXX COUNCIL
WORKS DEP’T GENERAL LEDGER
Department: Works 07
221011
Ledger Sheet No. 0002
Item: Printing, Stationery & Photocopying -
Section: 3 Water
Date
Details
Folio
30-4-00
April Abstract
ABS 1
Debit
Credit
Shs
Shs
5,000,000
Balance
Shs
5,000,000
XXXX COUNCIL
GENERAL LEDGER
Department: Works 07
223005
Ledger Sheet No. 0003
Item: Electricity –
Section: 3 Water
Date
Details
Folio
30-4-00
April Abstract
ABS 1
Debit
Credit
Shs
Shs
8,200,000
Balance
Shs
8,200,000
XXXX COUNCIL
GENERAL LEDGER
Department: Works 07
Ledger Sheet No. 0004:
Item: Telecommunications - 222001
Section: 3 Water
Date
Details
Folio
30-4-00
April Abstract
ABS 1
Debit
Credit
Shs
Shs
5,680,000
Balance
Shs
5,680,000
XXXX COUNCIL
WORKS DEP’T GENERAL LEDGER
Department: Works 07
227001
Ledger Sheet No. 0009
Item: Electricity –
Section: 3 Water
Date
Details
Folio
30-4-00
April Abstract
ABS 1
Debit
Credit
Shs
Shs
3,000,000
Balance
Shs
3,000,000
The Local Governments Financial and Accounting Manual 2007
143
6.4.2.17
Final Ledger Postings
At the end of any accounting period there will be adjustments to be incorporated into the
ledger by the Councils applying accrual basis of accounting. The adjustments shall be
incorporated before the trial balance is extracted and will be effected by raising journal
entries.
Ledger adjustments may be required for the following:
(1) Bad debts written off
(2) Provision for bad and doubtful debts
(3) Lost stock
(4) Obsolete stock
(5) Accrued expenses
(6) Accrued revenue
(7) Depreciation
6.4.2.18
Bad debt written off
(1) The Executive Committee in consultation with Auditor General is empowered to
authorise the writing off of bad debts not exceeding one million shillings when it is
satisfied that the bad debt is not recoverable. Where the bad debt exceeds one million
shillings the council shall take a decision.
(2) The total of the debtors list must agree with debtors control account in the general
ledger. At the end of financial year a list of debtors shall be extracted from the debtor’s
ledger.
(3) The list of debtors shall be scrutinized to identify bad debtors (i.e. the debtors who are
unlikely to pay). The bad debtors identified will be submitted to the Executive Committee
for approval before they are written off in the income and expenditure account. If a
decision is taken to write off some of the debtors as bad debtors the following ledger entries
will be effected.
DR
Bad debts (Code 221013)
CR
Other Account receivable (Select from code 321601 to 321603)
(4) The bad debtors written off shall be removed from the debtor’s ledger and the debit
balance on the Bad debts account shall be transferred to the debit of the income and
expenditure account.
(5) When a bad debt written off is subsequently paid the amount received is debited in the
cash book and credited to the revenue account.
The Local Governments Financial and Accounting Manual 2007
144
6.4.2.19
Lost Stock
(1)At the end of financial year the stocktaking exercise shall be organized, the physical
stock count will be compared with balances shown on the stock cards. There may be stock
shortage or surpluses.
The stock shortage shall be investigated and then listed for the approval of the Council
before they are written off. The book entries for lost stock will be:
DR
Extra-Ordinary Items (Losses/Gains) -Code 282181
CR
Materials & Supplies (Code 314201)
The stock items with surpluses will be adjusted in the stores ledger with the approval of the
Council.
6.4.2.20
Obsolete and expired stock
The end year stocking exercise, if organized and carried out properly, will identify obsolete
stock. Before obsolete stock can be written off, the approval of the Council shall be
required and if obtained the book entries will be;
DR
Extra-Ordinary Items (Losses/Gains) -Code 282181
CR
Materials & Supplies (Code 314201)
6.4.2.21
Accrued Expenses
At the end of any accounting period there will be expenses incurred but not yet billed by the
suppliers e.g. Telephone, Water and Rent bills and fees for services provided etc. Under
the accrual basis accounting such outstanding obligations must be brought in the books of
account by the following entries:
DR
The respective expense accounts in the ledger
CR
Accrued expenses accounts (select from class 4 accounts codes – liabilities)
6.4.2.22
Accrued Revenue
If the Council is applying accrual basis accounting all revenue which is outstanding at the
end of an accounting period must be taken into account before the Income and Expenditure
statement is prepared. The relevant books entries shall be as follows:
DR
Other Accounts Receivable (Codes 321601 to 321603)
CR
Revenue account
The accrued revenue should be carefully reviewed to establish the doubtful debtors which
should be written off as bad debts.
The Local Governments Financial and Accounting Manual 2007
145
6.4.2.23
Special Ledger Accounts
There will be some special ledger accounts in the General ledger which call for special
mention. These are:
(1)
Fixed Assets
(2)
Investments
(3)
Fixed bank deposits
(4)
Loans
6.4.2.24
Fixed Assets
Fixed assets are those assets which yield benefit to the Council for more than one
accounting period. They are shown in the balance sheet as a separate category.
Fixed assets are not charged directly to the Income and Expenditure statement in the year of
purchase because they bring benefits to users over a number of accounting periods.
Revenue charges of fixed assets should be a reflection of the consumption of the asset. A
fixed asset is normally written off over its estimated useful life by applying depreciation
rates.
The methods of depreciating Fixed assets are provided below. The two generally used
depreciation methods are straight line and reducing balance methods.
(1)
Straight line method
Under this method the annual charge for depreciation is ascertained by dividing the cost of
the asset less the residue value by the number of years estimated to be the life of the asset.
Thus an equal amount is provided each year and the following are book entries:
DR
Depreciation (Select from code 231001 to 231007)
CR
Accumulated Depreciation (select from codes 428101 to428203)
The depreciation accounts should then be written off to the Income and Expenditure
statement just like other expense accounts. The accumulated depreciation account
represents capital discharged (Capital value written down) and should be subtracted from
the value of the fixed assets to get a net value that will be included in the balance sheet.
(2)
Reducing balance method
Under this method the total depreciation is spread over the anticipated useful life of the
asset by annual instalments of diminishing amount computed by taking a fixed percentage
of the book value of the asset as reduced by the previous provisions for depreciation.
If the asset is financed by borrowing, it may be written off in parallel with the repayment of
capital on the loan.
The Local Governments Financial and Accounting Manual 2007
146
Revenue charge per year is ascertained by dividing the value of the loan by the estimated
useful life of the asset.
Each Council should be consistent with the method chosen to write off its fixed assets.
The Depreciation of assets are classified into four classes as set out in the Figure below,
with depreciation rates applicable for each class as specified in part.
The Council’s depreciable assets shall be placed into separate pools for each class of asset,
and the depreciation deduction for each pool is calculated using rates shown in table Ac 2
bellow.
Table Ac 2 : Depreciation Rates of Local Government Assets
Part 1: Reducing balance depreciation rates for depreciable assets
Class
Assets included
1.
Computers and data handling equipment
2.
Automobiles; buses and minibuses with a seating capacity of
less than 30 passengers, goods vehicle with a load capacity of
less than 7 tonnes; construction and earth moving equipment
Buses with a seating capacity of 30 or more passengers; goods
vehicles designed to carry or pull loads of more than 7 tonnes;
specialised trucks; tractors; trailers and trailer mounted
containers, plant and machinery used in farming,
manufacturing or mining operations
Motor vehicles (Saloon cars, Pick Ups etc), locomotives and
equipment; vessels, barges, tugs and similar water
transportation equipment; aircraft; specialised public utility
plant; equipment and machinery; office furniture; fixtures and
equipment; any depreciable asset not included in other class
3.
4.
Depreciation
Rate
40%
35%
30%
20%
Part II: Straight-line depreciation rates for buildings
The depreciation rate for buildings is 5 percent
Note: The depreciation rates and ceilings are in conformity with those in the Income Tax
Act, Cap 340.
6.4.2.25
Investments
(1) In accordance with Financial Regulation 168 a Council may invest its surplus funds in
various securities. Separate ledger accounts will be opened for each type of investment.
The ledger should be in columnar form so as to show clearly the following:
(a)
Nominal amount of investment;
(b)
Income received;
(c)
Actual cash paid representing the capital invested.
The Local Governments Financial and Accounting Manual 2007
147
(2) The format for the investment ledger account is shown below..
Form AC27 : Investment ledger account
XXXX COUNCIL
INVESTMENT LEDGER FORMAT
Dr.
Date
CR
Particulars
Folio
Normal
Amounts
Shs.
Income
Shs
Capital
Shs.
Date
Particulars
Folio
Normal
Amounts
Shs.
Income
Shs
Capital
Shs.
(3) When securities are purchased the Securities other than equity accounts (select from
code 321201 to 321205 and codes 322201 to 322203) shall be debited with the investment
cost and cash book credited.
(4) The individual ledger account shall be adjusted annually in accordance with the
following procedure, to reflect the current market value of the investment:
(a)
A valuation of the investment, at middle market value, shall be made annually.
(b)
Where the value of an investment has depreciated since the previous valuation, the
depreciation shall be credited to the relevant securities other than equity account.
(c) Where the value of an investment has appreciated since the previous valuation, the
appreciation shall be credited to the relevant Reserve account (either 512101 capital
reserve) and debited to the relevant securities other than equity account.
(d)
When an investment is realized, the proceeds of sale shall appear as a receipt in the
Cash Book and a credit in the relevant securities other than equity account.
(e)
shall
Where proceeds of the sale are less than the value of the investment, depreciation
be written off by adjustment to the relevant Reserve account.
6.4.2.26
Interest on Investment
Interest on investment shall be credited to the relevant Investment Income or dividends
Account (select from codes 141101 to 141161 or 141201) and debited in the Cash book. At
the end of the financial year the total income shall be transferred to revenue accounts.
6.4.2.27
Fixed Bank Deposits
The Head of Finance may with the approval of the Chief Executive invest cash surplus to
normal requirements, for short term periods, in a fixed bank deposits. A separate ledger
account shall be opened for each such deposit. The total of such deposits shall balance with
the control account in the Main ledger. Interest earned on a fixed deposit shall be credited
to the relevant investment income account (either code 141101 0r code 141141). On
receipt of the Bank statement recording such interest, it shall be debited to the cash book
and credited to the interest account.
The Local Governments Financial and Accounting Manual 2007
148
6.4.2.28
Loans
Any unspent balance remaining on a loan account after completion of the project shall be
declared to the Executive Committee for further instructions. Any Loan instalments paid
shall be debited to the respective loan account (codes 413001 to 413003) and the cash book
credited. Interest charged on the loan shall be credited on the interest payable account
(code 413002) loan account and debited to interest account.
6.4.2.29
Trading Accounts
The Local Government Council’s shall open Trading accounts in the Ledger, for each of its
trading activities approved by the Council. Each Trading account shall show the results of
the operations of the undertaking to which it relates. Each month, the trading profit
reflected on the trading account shall be credited to the Revenue Account. Trading losses
shall be debited to this same account.
The format of a Trading account shall be as follows:
Form AC 28: Trading Accounts Format
Trading Account for the Month/Year
Shs
Sales
Less:
Shs
xxxx
Cost of Sales
Opening Stock
xxxx
Purchases
xxxx
Other Direct costs
xxxx
Xxxx
Closing Stock
Less:
Cost of goods sold
xxxx
Gross Profit
xxxx
Other expenses
xxxx
Net Profit
6.4.2.30
(xxxx)
xxxx
Revaluation Surplus/deficit
When a decision is taken by the Council to revalue its Fixed Assets, the excess between the
cost of the assets and the valuation amount will be credited to the Capital Reserves Account
(code 512101) in the General Ledger while deficits will be debited to this same account.
Future depreciation of the fixed assets will be based on the new valuation and not on
historical cost.
The Local Governments Financial and Accounting Manual 2007
149
6.4.2.31
Verification of Accounts
The Head of Finance will verify the accuracy of the accounting records at the end of each
month by comparing the balances of the Control or Main accounts in the general ledger
with the total balances of the relevant subsidiary accounts in the subsidiary ledgers at the
close of each month’s account
6.4.2.32
Posting the opening balances to the General Ledger
Opening balance on all ledger accounts and cashbooks must be brought forward in the
accounts. All assets accounts are brought forward as debits, liabilities as credits and equity
accounts as credits.
6.5
REVENUE RECORDING UNDER ACCRUAL ACCOUNTING
(1) Under Accrual Accounting the revenue for the period is recognized at the time of
assessment, the journal entry to record the revenue assessment is shown in illustration Ac
27 below
Illustration AC 27: Journal Entry to record revenue assessment.
Date Particulars
Other
Accounts
Code
Receivable
Ref
321600
Dr.
Cr.
Shs
Shs
300,000
(Revenue)
Land Fees (Premium Revenue)
113101
50,000
Park Fees Revenue
142201
190,000
Animal & crop husbandry related
142206
levies
Narration: Being accrued revenue
Totals
assessed for the period as per
registers
Prepared by:…………….
Approved by: HoF
60,000
300,000
300,000
Checked by:……………..
(2)
The approved journal shall be posted and cross-referenced to the General Ledger.
Each form of revenue shall be credited on the appropriate revenue account that
corresponds to
the revenue code. The total amount as classified in the abstract shall
be debited on a
control account known as Revenue Receivable Control Account.
This account controls the total amount assessed and receivable from the Councils sundry
debtors. All postings shall be done immediately
The Local Governments Financial and Accounting Manual 2007
150
Illustration AC 28: Posting Assessment and Receipts to the General Ledger
XXXX COUNCIL
“GENERAL LEDGER”
Ledger Sheet No………………
Funding Source: Local Revenue 003
(revenue)
Date
Particulars
Folio
1.7.2000
1.7.2000
1.8.2000
Item: 3216 Other Accounts Receivable
Debit
Shs
B/F
Assessments JV001
Receipts
CB01
Credit
Shs
178,000
300,000
Balance
Shs
178,000
478,000
328,000
150,000
(3)
In order to monitor the payments and movements in the account of each individual
payer a personal account of each individual is maintained in the subsidiary ledger.
(4)
Therefore, duplicate copies of the assessments shall be sent to the accounts staff
Illustration AC 29: Reconciliation of Revenue Receivable Control Accounts
XXXX COUNCIL
RECONCILIATION OF OTHER ACCOUNTS (REVENUE) RECEIVABLE CONTROL A/C AND
SUNDRY DEBTORS ACCOUNTS AS ON………
Date
Account Name
Account Code
Dr.
Cr.
Revenue receivable
control balance
Shs
31.08.2000
Revenue receivable
3216
3216-01*
3216-02*
3216-03*
31.08.2000
D. Wanyana
J. Bbaale
ABC Butchers
Totals
Sundry
ledger
balances
Shs
debtors
account
150,000
150,000
82,000
50,000
18,000
150,000
* These codes are note part of the official GOU Chart of accounts and should only be used for internal use
for the purpose of keeping personal accounts of debtors. The balances on such accounts should be
consolidated under the relevant other accounts receivable account code (321601 to 321603) for
financial reporting purposes
(a)
If the accounts do not agree the error should be traced from all possible causes down
to the records used for posting the prime entries. When discovered an adjustment
journal entry should be made to correct the accounts accordingly. However, if the
error persists the total of the balances on combined subsidiary ledger accounts
should be taken as the correct amount demanded on the Revenue Receivable
Control Account. A journal entry should be made to adjust the Revenue Receivable
Control Account with the appropriate revenue account code.
The Local Governments Financial and Accounting Manual 2007
151
(b)
All journal entries regardless of the purpose, and conditions under which they are
raised, must first be approved by Head of Finance before being posted to any
account. They must be supported and cross-referenced to all underling primary
documentary evidence.
Form AC 29: Revenue Distribution Return
XXXX COUNCIL REVENUE DISTRIBUTION RETURN FOR MONTH OF………..
Collection
Revenue
Revenue
Source
Code
Budgeted
during the
collected to collected for
Revenue for
month
previous
date
year
month
Land Fees
113101
Other taxes on 114402
specific services
Business licences
114505
Liquor licences
114506
Park fees
142201
Property
related 142204
duties/fees
Advertisement/bill 142205
boards
Animal
related 142206
charges
Market charges
142214
Other fees and 142219
charges
Miscellaneous
145003
receipt
Total
*Since beginning of year.
Amount banked on Sub-County/Division Revenue Collection Account……..during the month:
Shs……….
DISTRIBUTION
Payee
Cheque No.
Shs
District Council (35% of total collection
………Sub-county Council (LC 65% of 65%)
………County Council (5% of 65%)
………Parish Councils (5% of 65%)
………Village Councils (25% of 65%)
REVENUE FORM TENDERS
Remarks
Tenderer
Tender sum Amount
Market/Park/BB
Received
per month
…………………………….
during
the
…………………………….
month
…………………………….
Shs
Shs
…………………………….
…………………………….
Prepared by:………………………………
Approved
by:……………………………….
Chief Executive
The Local Governments Financial and Accounting Manual 2007
152
6.6
ANNUAL CLOSURE OF ACCOUNT
The procedures for the annual closure of accounts shall include the following:
(1)
Boards of survey for stores and cash shall be convened.
(2)
Any late submitted accounting entries must be journalised.
(3)
Below-the line ledgers and control accounts must be balanced including those
summarizing the general and capital funds, stores control accounts etc, and balances
carried forward.
(4)
Imprests must be fully retired and closed.
(5)
Accounts for projects must be reconciled and unspent balances explained.
Explanatory reports of work done, level of performance and materials on site
must be given
(6)
All books including Vote Controllers’ vote books and cashbooks, revenue and
expenditure accounts shall be reconciled and closed.
6.6.1 Boards of Survey
Boards of Survey should be convened by the CE in accordance with Financial and
Accounting Regulation 102 to examine the cash, Stores and bank balances in the hands of
HoF, HoDs, Revenue Collectors, Cashiers and Imprest holders, after the close of business
on the last business day of each financial year, or before the commencement of business of
the following financial year.
6.6.2 Duties of Boards of Surveys
The following are the duties of Boards of Surveys on Cash and Bank Balances, Stores and
Securities, Annual Board
(1) Reports will be prepared in triplicate on a Form presented below in Form AC 30 and
AC 31. The Chairman will forward a copy of report to the CE ,the Auditor-General,
the third copy will remain with the officer whose cash, etc, is surveyed who, if any
discrepancy is revealed, will forward his or her explanation to the CE and the
Auditor General.
(2) Boards may consist of any number of persons, their composition being determined
according to the circumstances in which they are assembled; ordinarily three will be
sufficient. The senior officer will be the Chairman.
(3) The survey must be held after the close of business on the last business day of the
financial year, or before the commencement of business of the following financial
year.
(4) In the case of cash balances, the Board:
The Local Governments Financial and Accounting Manual 2007
153
(a) Must count all notes and coin found in unsealed packages;
(b) Must check the numbers of sealed packages of notes and coin of several
denominations and verify that the seals are either original seals on unopened
packages as received from the Mint, or seals of the Bank or seals of previous
Boards of Surveys.
(c )Must inspect every seal;
(d) Must make test checks of the contents of sealed boxes of scaled packets of
notes and boxes and bags of silver coin (other than those in original
unopened packages from the Mint) to see that they actually contain notes or
coin of the denomination and to the amount sealed;
(e) Must, when packages are opened for the purposes of making such test
checks, or for any other reason; (i) affix to each package a label signed y the
Board specifying the date, the denomination and the amount contained in the
package; and (ii) reseal the package with a seal other than that of the office
at which the survey is taking place, the form of the reseal being decided by
the Chairman.
(f) May, in the case of subsidiary coins (100 cents and five hundred cents
pieces), other than those in original unopened packages adopt any method of
verification which they consider satisfactory. A sufficient and ordinary
procedure would be to examine such proportion, taken at random, as may be
necessary to verify the whole;
(g) Must see that any excess found is entered in the respective account book,
and
sign their names against any such entry and report the matter;
(h) Must endorse the strong-room cash register to the effect that the balance was
checked and found correct or not, as the case may be.
(5) Where a bank account is operated the Board must check the cash book balance at the
time of the survey. The method of reconciling the Bank Certificate of Balance
against the cash book balance is detailed below in figure XXX
(6) Where stock certificates or other securities are held the Board will ensure that an
adequate description and the nominal value of each is shown on or is attached to the
report form.
(7) If it is necessary to list securities on an attachment to the report form, the items in the
list will be serially numbered and a line will be drawn beneath the last item. All
members of the Board will sign beneath the line.
(8) Surprise Boards: Boards which may be appointed by CE from time to time to hold
surprise surveys of cash and stamps, etc, should adopt a similar procedure. The
Board on arrival at the office concerned will request the officer-in-charge of the
cash, etc, to rule-off the books and balance them.
The Local Governments Financial and Accounting Manual 2007
154
Form AC 30: Report of a Board of Survey on Stores
XXXX COUNCIL
I. REPORT OF A BOARD OF SURVEY ON STORES
Original
To: ……………………………………………………. (Original and 3 copies)
Duplicate
(Head of Department)
Triplicate
Quadruplicate
On the instructions of:…..………………………………………………………………………………………………..…..
We, the undersigned, have inspected the stores on charge at………………………………………………………………
We certify that we have a * complete / % test check of the stores, that where the balance agreed, they have been initiated
in the stores ledger and that stores on hand agreed with the ledger balance except as shown on the schedule on Page 3.
We certify that in our opinion, a continuous department check on the stock balances* has/has not been carried out during
the ear other than by the offices immediately in charge of the stores.
In our opinion, the store accommodation* is / is not adequate. The condition of the store is * good/bad. The articles*
are/are not excessive or obsolete stocks (*See list attached.
* A list of unserviceable stores is shown on Page 4 together with our recommendation as to their condition and disposal.
We certify that the articles so indicated on Page have been destroyed by
of………………….. member.
*in our presence/in the presence
(Space for any further comments)
………………………………………Chairman
……………………………………..Member
Date……………………………………
II. CHIEF EXECUTIVE (Original and 2copies)
(or other Authority, as in Sec. III overleaf & Forwarded with comments as follows:
Date……………………………………
…………………………………………
(Head of a Department)
* Delete as necessary. State method of destruction. Insert title of officer convening the Board. If the Board has recommended the
dismantling or disposal by sale of a Government vehicle, the Head of Department ma anticipate approval of the Boards
recommendation in this respect. In this case, he should state in Part II what action has been taken and send the fourth copy of
this Form to the Chief Mechanical Engineer.
III.
IV.
DECISION OF Chief Executive
To ……………………………………………………………………………….. ……….(Original and 1Copy)
(Head of Department)
The above decision is forwarded to you for information and necessary action.
Date………………………………………………………
…………………………………………
CE
…………………………….District
The Local Governments Financial and Accounting Manual 2007
155
V.
CHIEF EXECUTIVE (1 Copy (Original to be retained in support of Stores
Ledger)
I certify that necessary action has been taken to implement the decision at Part III regarding the discrepancies listed on
Page 3. The surplus have been taken on charge and deficiencies paid for under the receipt numbers quoted. The
recommendations mentioned on Page 4 have been carried out ,
I also certify that eh articles enumerated as deficient or unserviceable have been written off the store accounts.
I further certify that one copy of this Form has been sent to the District/Urban Engineer.
Date……………………………………………………….
…………………………………………
(Head of Department)
VI.
THE AUDITOR GENERAL (1 copy)
Noted and forwarded
Date………………………………………………………
…………………………………………
CE
VII.
All the above adjustments have been verified.
Date……………………………………………………….
…………………………………………
(Auditor General)
*Delete as necessary
Delete as necessary; see note to Part II.
Form AC 31: Statement of Discrepancies
XXXXXX COUNCIL
If no discrepancies, insert “Nil”. The Members of the Board must sign this statement immediately below that last
entry).
Article
Book
Balance
Actual
Balance
Surplus
Deficit
Book Value
(or cost)
Remarks
The Local Governments Financial and Accounting Manual 2007
156
NOTE - If more than one sheet is required, supplementary rages must be attached securely to this form.
LIST OF STORES, ETC., AWAITING INSPECTION BY BOARD OF SURVEY
NOTE - If no unserviceable articles submitted, insert “Nil”. The members of the Board must sign this statement
immediately below the last entry. If a vehicle is shown on this page, the registration number must be given.
No.
Article
Book Value (or cost
Recommendation of the Board
Note – If more than one sheet is required, supplementary pages must be attached securely to this form.
The Local Governments Financial and Accounting Manual 2007
157
Form AC 32: Report of Annual/ Surprise Board of Survey
XXXXXX COUNCIL
ORIGINAL
DUPLICATE
TRIPLICATE
REPORT OF ANNUAL/ SURPRISE BOARD OF SURVEY ON CASH, CASH BOOK, BANK BALANCE AND
Councils REVENUE
NOTES
(a)
In the case of the Annual Board, the Survey MUST be held after the close of business on the last business day of
the year, or before the commencement of business on the first business day of the New Year.
(b)
One copy of the Report must be forwarded to the Chief Executive, copy to the Auditor General.
(c)
Attention is directed to Local Governments Financial and Accounting 102.
(d)
In all cases where the Council money are kept in the same strong-room, safe, etc.; as Government money for
delegated services, the Board must, at the time, also survey such moneys, following the same procedure as laid
down in the case of Government moneys, and report accordingly.
(e)
Any securities (e.g. bank Fixed Deposits) must be examined and recorded.
Date…………………………………………
To
*THE AUDITOR GENERAL
*CHIEF Executive
Report of the Annual/Surprise Board of Survey on the Cash, Cash Book, Bank Balance*, held by …………………….as
at the close of business on the ……………………………… in accordance with your instructions the Board, consisting
of:
……………………………………………
Chairman
……………………………………………
Member
……………………………………………
Member
……………………………………………
Member
assembled at the office of …………………………………………………………………………. at …………………
a.m./ p.m. on the ……………………, Year ……………..
Delete as necessary.
BOARD OF SURVEY CASH
2.
The following cash was produced:
Note
..
..
..
Shs
Cheque
..
..
..
………………………
The Local Governments Financial and Accounting Manual 2007
158
Total….
CASH BOOK
3.
The Cash Book, duly ruled and balanced, and signed by us, reflected the following balance as at the close of
business on the ………………………………..
Shs
Cash on hand
………………………………
Bank balance (8)
………………………………
Total….
BANK
4.
(a)
The Bank Certificate of Balance showed a sum of Shs……………………………………………….
Sending to the credit of the account on the……………………………………………………………
(b)
The difference between this figure and the Bank Balance as shown by the Cash Book is accounted
for thus:
Shs
Balance at bank per Bank Statement………………………………………………………..
Add:
Deduct
(i)
Receipts in the cash book not yet credited
xxxxx
(ii)
Bank charges not yet posted in cash book
xxxxx
(i)
Un-presented cheques
Date
Amount
Drawn
Shs
……………….
…………………..
………………………..
……………….
…………………..
………………………..
……………….
…………………..
………………………..
……………….
…………………..
………………………..
……………….
…………………..
………………………..
……………….
…………………..
………………………..
Shs………………
……………………….
(ii)
Balance per cash book
6.6.3
xxxxx
Credits in the bank statement not posted in cash book
xxxxx
Adjusting Entries
6.6.3.1
Cash on Hand
At the end of the financial year, the Boards of Survey shall do physical cash counts to
verify and ascertain that the cash agrees with the records.
The Local Governments Financial and Accounting Manual 2007
159
6.6.3.2
Cash Surpluses
Assume the Board of Survey’s cash count confirms that there is a cash surplus of Shs
50,000. This surplus shall be recorded as miscellaneous income to the Council. The entry
shall be:
Illustration AC 30: Journal to Record Cash Surplus
Date
August 31.2000
Particulars
Code
Cash at hand Account
321108
Revenue Account
512201
Folio
Dr.
Cr.
Shs
Shs
50,000
50,000
Being cash surplus on vote
6.6.3.3
Cash Deficit
Assume there was a deficit of Shs. 20,000 the entry would be as follows:
Illustration AC 31: Journal to Record Cash Deficit
Date
August 31.2000
Particulars
Code
Revenue Account
512201
Cash at Hand Account
321108
Folio
Dr.
Cr.
Shs
Shs
20,000
20,000
Being cash shortage on vote
Both surplus and deficits must be investigated to establish when they occurred.
6.6.3.4
Irrecoverable Advances
Where an advance was given but its chances of recovery are remote, the Head of Finance
shall explain to Council and request for authority to write it off.
Illustration AC 32: Recording of Irrecoverable Advances
Assume an advance of Shs. 1,000,000 was given to Mr. Kasozi (Transport Officer) to buy
fuel for road construction, but he died in a road accident before accounting for the funds.
However it is independently confirmed that the work was not yet done. On receipt of
approval from Council the entry would be passed to write off the advance and extend it on
the vote for which it was originally intended as follows:
In the other advances subsidiary ledger and entry will be made to Kasozi’s personal
account to reflect this (Note: This kind of advance is not a staff advance; staff advances are
short term loans advanced to staff again their salary).
The Local Governments Financial and Accounting Manual 2007
160
Kasozi’s Account
Date
Particulars
August 31
Balance b/f
Folio
Dr.
Cr.
Shs
Shs.
1,000,000
Balance
1,000,000
2000
Loss
1,000,000
0
To write off the advance to Mr Kasozi
that was not accounted for at time of his
death as per Council Resolution No…..
The following entry will be made in the General Journal
Date
Particulars
August
31 Bad debts
Code
221013
Folio
Dr.
Cr.
Shs
Shs.
1,000,000
2000
Other Advances-Mr Kasozi
321501
1,000,000
To write off the advance to Mr
Kasozi that was not accounted for at
time of his death as per Council
Resolution No…..
6.6.3.5
Investments and Related Income
(1) A Council may invest some of its excess funds into various securities.
Illustration AC 33: Recording of short term investments and their income
A Council may buy 91-day Treasury Bills worth Shs. 10,000,000 from Bank of Uganda.
Since TB’s are issued at a discount the Council may pay Shs 9,800,000. The Council will
receive full value at maturity. Under cash accounting the Council should record the actual
amount paid out as purchase price.
(2) The entry will be recorded in the cashbook as credit and classified in the abstract for
posting to the General Ledger under code 321202 – Promissory Notes).
(3) On maturity after 91-days Bank of Uganda will pay the full amount of the face value of
Shs. 10,000,000 this would realize an investment income of Shs 200,000.
The Council will issue a receipt as follows;
Shs
The Local Governments Financial and Accounting Manual 2007
161
Proceeds of Treasury Bills (Principal)
9,800,000
Investment Income
Total
200,000
10,000,000
(4) The amount shall be recorded in the cashbook and the credit classified in the abstract for
posting to the General Ledger.
(5) The HoF shall maintain a register of such investments detailing the date of purchase,
the issuer, volume bought, purchase price, expected income and date of maturity.
6.6.3.6
Investment and related losses
(1) The Council may incur some expenses while purchasing investments e.g. broker’s fees.
These should be off set from the income, but not added to the actual cost of the investment.
(2) Sometimes the Council may wish to dispose all or some of its short-term investments
before they mature (re-discount) so as to raise immediate cash.
Illustration AC 35: Recording of expenses and losses on short-term investment
Assume the TBs above were sold to a bank for Shs 9,876,950 after holding them for 35
days, assume brokerage fees were Shs 15,000.
The Council shall recognize and record only the income of Shs. 76,950 received within the
holding period. This shall be reduced by the brokerage fees (if any) during the re-discount
process.
The cheque of Shs 9,876,000 will be receipted, banked on the General Fund Account, and
recorded in the cashbook. The Abstract shall classify the expenditure of Shs. 15,000 and
credits of Shs 9,800,000 and Revenue of Shs 76,950.
6.6.4
Accrual Accounting Basis
Under the Accrual Accounting Basis, the effects of transactions and other events are
recognized as and when they occur (and not as cash or cash equivalents are received or
paid. The effects are recorded in the accounting records and reported in the Financial
Statements of the period to which they relate.
6.6.4.1
Accrued Revenue
On issue of an assessment, revenue is immediately recognized for the period.
The Local Governments Financial and Accounting Manual 2007
162
When cash is received, the cash account is debited, and the Other Accounts Receivable
Account (either code 321601 Taxes Receivable Account or code 321603 Sundry Debtors
Account) is credited.
6.6.4.2
Bad debts (Direct write-off)
Sundry Debtors Accounts at the end of the year shall be carefully scrutinised to ensure that
the accounts reported in the financial statements are recoverable. As per regulation 100(1)
of the Local Government Financial and Accounting Regulations 2007, Any Bad Debts
identified will be reported and recommended to Council with reasons for approval to be
waived/written off. Every effort for recovery should have been taken and failed.
6.6.4.3
Doubtful Debts
As per regulation 100 (2) of the Local Governments Financial and Accounting Regulations
2007, it may be necessary to set up a provision for doubtful accounts receivable. This
provision is intended to be applied in writing off accounts that have been confirmed as uncollectable in the future.
Illustration AC 36: Recording of debts and provision for doubtful accounts
Assume on 30th June 2000, CFO received arrears of Revenue Return from a Division for
the period indicating the following information:
1. That Mukasa who owed the Council Shs 300,000 for Property Rates had his property
demolished due to road extension. He was compensated and left the Council’s area
of
jurisdiction.
2.
The traders went on strike resisting an increase in the Assessment of Shs 2,500 per
person which had been accrued in the books of Accrued Revenue totalling Shs
2,000,000.
3.
Then the following journal entries would be passed, after approval by Council.
Bad debts written off
Date Particulars
Folio
Dr.
Shs
Bad debts
Cr.
Shs
300,000
Sundry Debtors
300,000
Narration: Being amounts due from
Mukasa not recoverable
Provision for doubtful debts
Date Particulars
Folio
Dr.
Cr.
The Local Governments Financial and Accounting Manual 2007
163
Shs
Bad debts
Shs
2,000,000
Sundry debtors
2,000,000
Narration: Being doubtful debts for the
year in respect to resisted increases
6.6.4.5
Stock
(1) Stock Valuation
At the end of the financial year, the Board of Survey shall make a physical count of stock to
verity the quality and quantity of the existing items.
Using the stock sheets and recorded rates of items the Head of Finance, shall carryout a
valuation of the available items, to confirm that the monetary value computed on the stock
sheets agree with the value recorded on the General Ledger Account.
(2)
Methods of Stock Valuation
There are various methods of stock valuation such as First In First Out (FIFO), Last In First
Out (LIFO), Average Cost method etc… stock will be valued according to the most
appropriate method in the circumstances, as approved by the Council on the written
recommendation of CFO.
(3) Reconciliation of Stocks
After valuation, the value of the physical stock count shall be reconciled with the value in
the General Ledger. If the value of the physical stock that has been counted and valued that
the value recorded on the general ledger, the difference shall be realized as a gain. If the
valuation gives a less figure than that on the General Ledger, a loss shall be recognized.
HoF shall investigate the discrepancies and their causes.
The journal entry for gain is:
Date Particulars
Dr.
Shs
Cr.
Shs
Materials & supplies(314201)
Revenue Account
Narration: To record undervalued stock
The journal for the loss is:
The Local Governments Financial and Accounting Manual 2007
164
Date Particulars
Dr.
Cr.
Shs
Shs
Revenue Account
Materials and Supplies Account
Narration: To adjust overvalued stock
(4)
Obsolete Stock
These include items, which have been confirmed by the Boards of Survey as existing
without economic value e.g. old items, spoilt goods, items destroyed through storage and
handling or wasted away by termites.
The Head of Internal Audit s is required to obtain the value of the obsolete stock and pass it
over to the CFO who shall report it to the Council through Executive Committee for
consideration and action.
The obsolete stock shall be written off in compliance with the LGFAR’s
The entries to recognise the loss are:
DR
Revenue Account
CR
Materials and Supplies
Narration: To write off obsolete Stock from the Materials and Supplies Account.
(5)
Surplus Stock
If the Boards of Survey confirm that there are items of stock that have not been recorded,
the entry to record such items in the General Ledger shall be:
DR
Materials and Supplies Account
CR
Revenue Account
Narration: Being stock items not previously recorded in the General Ledger now
recorded
6.6.4.6
Fixed Assets
These assets are entered in the General Ledger, and presented in the Balance Sheet at the
end of the financial year.
The assets shall be classified in the Fixed Assets Register according to their categories.
The Local Governments Financial and Accounting Manual 2007
165
(1)
Acquisition of Fixed Assets
Fixed Assets may be acquired either by purchase, construction, grant or donation. The
methods are illustrated as follows:
Illustration AC 36: Recording of Purchased Fixed Assets on Cash Terms
Assume in October 2000 the Council purchased 5 pick-ups from Spear Motors for Shs
200,000,000. This transaction could have been executed in any of the following methods
and would be recorded as indicated in the journals.
(a) Outright cash purchase: This occurs when the assets are paid for in cash or on credit,
and acquired for immediate use.
Date
Particulars
Oct 1
Transport Equipment
Bank account
Dr.
Cr.
Shs
Shs
200,000,000
200,000,000
Narration: To record purchases of 5 pick-ups
from Spear Motors on cash terms as per
cheque/EFT Payment instruction No….
(b) Loan Purchases
Under this arrangement an agreement is reached with the seller of the assets for postponed
cash payments. The asset will be obtained and put to use while the payments continue to
flow much later, according to the terms of the agreement. The vehicles will be entered in
the Motor Vehicles Register.
(c) Sinking Fund
Other than being a purchasing method, it is a way of setting aside annually amounts of
money estimated to be equal to the cost of a new asset for future replacement of the asset
currently in use.
The amounts set aside may be determined as equal to the depreciation charge per annum
plus a factor equivalent to inflation rates in the economy.
(d) Donations/Grants
The Council may obtain assets either by way of Donation or Grant from Government or any
other Donor. These assets shall be classified as Capital Grants. The Council should
endeavour to obtain prices for those assets at an arms length transaction as would have been
determined by a willing buyer and a seller.
The Local Governments Financial and Accounting Manual 2007
166
The journal to record the donation under cash accounting basis would be:
Date
Particulars
Oct 1, 20XX
Transport Equipment
Dr.
Shs
X
Cr.
Shs
Grants and donations
X
Narration: Being donation in kind to Council of……
vehicles by---- which have been valued by the
Councils Technical Experts as Shs………. as per
attached report
Under cash basis of accounting, assets are written down in full upon acquisition. The
following entry is required:
Date
Particulars
Oct 1, 20XX
Depreciation expense – Transport Equipment
Dr.
Shs
X
Cr.
Shs
Transport Equipment
X
Narration: Being full write down of the asset donated
But under accrual and capital accounting the journal will be:
Date
Particulars
Oct 1, 20XX
Asset donated e.g. Transport Equipment
Dr.
Shs
X
Capital grants and donations
Cr.
Shs
X
Narration: Being donation in kind to Council
of----- vehicles by---- which have been valued
by the Council’s Technical Experts at Shs-----as per attached report.
The capital grant is amortised over the useful life of the asset and credited to Income and
Expenditure statement on an annual basis.
(2)
Fixed Assets Register
Fixed Assets shall be recorded in the Fixed Assets Register, each asset, for instance a
vehicle taking its own page. But identical assets for homogeneous use such as tables,
chairs, desks may be grouped under one category for example furniture and report on one
page.
Form AC 33(a): Register of Fixed Assets - General
XXX COUNCIL
REGISTER OF …………………………………
Folio……………..
The Local Governments Financial and Accounting Manual 2007
167
Make/Model……………………………..
Reference No……………..
Original Cost…………………………….
Date acquired……………………………
Description………………………………
Location………………………………..
Date
Additions
Disposals
Cost
Shs
Remarks
In case of Motor Vehicles and Heavy Plants, the register shall be as per the form below:
Form AC 33(b): Register of Fixed Assets - Motor Vehicles and Heavy Plants
XXX COUNCIL
REGISTER OF MOTOR VEHICLES AND HEAVY PLANTS
Folio……………..
Make/Model……………………………..
Registration No……………..
Original Cost…………………………….
Capacity…………………….
Date acquired……………………………
Engine No…………………..
Description………………………………
Chassis No…………………...
Tyre Size………………………………..
Fuel Type……………………
Date
Cost
Shs
Mls/Kms
Repair and maintenance
Remarks
Particulars
In case of Land and Buildings, the register shall be as per the form below:
Form AC 33(c): Register of Fixed Assets - Land and Buildings
xxxxx
COUNCIL
REGISTER OF LAND AND BUILDINGS
Location / Address
Land Title
Reference
Description
Purchase Price Or
Valuation
Shs.
Remarks
The Local Governments Financial and Accounting Manual 2007
168
NOTES:
(1) State whether
Agricultural Land
Residential
Commercial
(2) State whether lease hold or
Milo land. If lease hold state
expiry date
(3 ) Give name of valuer and date of
valuation
(3)
Depreciation of Fixed Assets
(a) Fixed assets are not charged directly to Income and Expenditure account in the
year of purchase because they bring benefit to users over a number of
accounting periods.
(b) A fixed asset is normally written off over its estimated useful life. Two
generally used depreciation methods are straight line and reducing balance
methods.
(c) The Council shall on the written recommendation of the Head of Finance
approve the most appropriate method and rate of depreciation for the Council
use.
(d) Each Council should be consistent with the method chosen to depreciate its
fixed assets.
(4) Methods of depreciation
(a)
Straight Line Method: Under this method the annual charge for depreciation is
ascertained by this formula: Cost of the asset minus the residual value divided by the
number of years estimated to be the useful economic life of the asset for the Council. Thus
an equal amount is provided each year.
This method recognizes the expected salvage value at the end of the asset’s useful
economic life.
Illustration AC 37: Journal Entry to record Annual Depreciation Charge Straight-line
Basis
Assume the expected useful economic life of the pick-ups to the Council is 4 years and the
anticipated salvage value is Shs 20,000,000. The depreciation charge per annum would
be:
The Local Governments Financial and Accounting Manual 2007
169
Annual charge of depreciation = 200,000,000 - 20,000,000 = Shs. 45,000,000 P.A
4
Date Particulars
Depreciation (231004)
Dr.
Shs
45,000,000
Accumulated depreciation (428201)
Cr.
Shs
45,000,000
Narration: Being depreciation charge of the pick-ups
for the year at straight-line method.
(b)
Reducing Balance Method: Under this method the total depreciation is spread over
the anticipated useful economic life of the asset by annual instalments of diminishing
amounts. The annual depreciation charge is determined by computing a fixed percentage
on the un-depreciated book value of the asset. There is no salvage value.
Assume the approved depreciation rate is 20% the charge in year 1 would be 20% of the
200m which is equal to 40m and the accounting entries to be passed would be as follows:
Date
Particulars
Depreciation
Dr.
Shs
40,000,000
Accumulated depreciation
Cr.
Shs
40,000,000
Narration: Being depreciation charge of the pickups at reducing balance method.
In year two and three the depreciation charge would be reduced to Shs. 32,000,000 thus
20% of 160m (200m-40m) and Shs 25,6000,000 thus 20% of 128m (160m-32m) per year
respectively, i.e. un-depreciated balance multiplied with the rate.
(5)
Recognising Financing of Assets using Reserves (formerly referred to as Capital
Discharge)
In cases where the acquisition of assets have been financed from the revenue reserves of the
Council there is need to offset the amount equal to actual cash spent to acquire the asset
against the revenue reserves. The corresponding entry for the capital discharged is made as
a credit to the capital reserves account (512101).
The Local Governments which have been maintaining Capital Discharged account
should transfer any balances on this account to the Capital Reserves account (512101).
The journal entry to be made to effect this transfer is as follows:
Date
Particulars
Capital Discharge Account
Dr.
Shs
XXX
Cr.
Shs
The Local Governments Financial and Accounting Manual 2007
170
Capital Reserves
XXX
Narration: Being transfer of balance from the
capital discharge account to the Capital
Reserves Account
After this transfer has been made the treatment will be as shown in this section. The
capital discharged account will no longer be maintained in the books of accounts.
Recording of the expenditure in respect of internally financed assets in the year, using the
example above:
Date
Particulars
Revenue reserves
Dr.
Cr.
Shs
Shs
200,000,000
Capital Reserves
200,000,000
Narration: Being recognition of reduction in the
revenue reserves arising from financing assets
internally.
(6)
Amortisation /writing down of the Capital Reserves
An amount equal to the depreciation charge of the year on those assets which were financed
by reserves shall be transferred from the capital reserves account to the Income and
Expenditure statement.
Illustration AC 38: Amortisation of Capital Reserves
Assume the depreciation charge for the year, on the Councils internally financed assets was
Shs 40,000,000.
The entry to record the annual amortisation to the Capital Reserves account shall be:
Date
Particulars
Capital Reserves
Income and Expenditure account
Dr.
Shs
40,000,000
Cr.
Shs
40,000,000
Narration: Being annual amortisation of the capital
reserves to Income and Expenditure
Statement
(7)
Donations to Council
The Local Governments Financial and Accounting Manual 2007
171
Illustration AC 39: Recording Capital Donations to Council
Assume the British High Commission donates 30 computers to the Council worth Shs.
60,000,000 as per delivery note, the entry shall be:
Date
Particulars
Machinery & equipment (Computers) account
Dr.
Shs
60,000,000
Capital Reserves – Foreign Governments (512101)
Cr.
Shs
60,000000
Narration: Being donations of 30 computers to the
Council
The computers will be recorded in the Fixed Assets Register. At the end of the financial
year they will be depreciated as follows:
Assume the depreciation rate will be 50% on straight line basis
Year 1 60,000,000 x 50%
=
Shs 30,000,000
The journal entry to record depreciation for the first year shall be:
Date
Particulars
Depreciation – machinery and equipment (231005)
Dr.
Shs
30,000,000
Accumulated depreciation (428202)
Cr.
Shs
30,000,000
Narration: To record depreciation charge for the
year.
(8)
Transfers from Capital Grants Account
An amount equal to the depreciation charge for the year shall be transferred from the
Capital Grants Account to the Income and Expenditure Account, each year to ensure that
when the asset is fully depreciated the balance on Capital Grants Account should also be
nil.
Date
Particulars
Dr.
Shs
Capital Donor Funds – Foreign Governments 30,000,000
Cr.
Shs
(512101)
Revenue Grants (e.g. 131101)
30,000,000
Narration: To write down the Capital Grant of the
computers and transfer of the charge to the
Revenue Account
The Local Governments Financial and Accounting Manual 2007
172
(9)
Revaluation of Fixed Assets
Revaluation of fixed assets shall be done by a qualified Valuer, on request by the Council.
Illustration AC 40: Recording Revalued Assets
Assume a lorry whose value as per the books of account is:
Shs
Original cost
70,000,000
Accumulated depreciation
40,000,000
Revaluated cost
60,000,000
Calculation and Recording of Revaluation Surplus/Loss
Shs.
Motor Vehicle Account (cost)
70,000,000
Less: Accumulated Depreciation
(40,000,000)
Written down Book Value
30,000,000
Revaluation per Report
60,000,000
Revaluation surplus (Excess of report over book value)
30,000,000
=========
The entries to record the revaluation surplus shall be:
Date Particulars
Transport Equipment (Lorry) Account
Revaluation Reserve (512102)
Dr.
Shs
30,000,000
Cr.
Shs
30,000,000
Narration: To record revaluation surplus on lorry No..
Note:
The revaluation surplus is not realized revenue and shall not be recorded in the Income and
Expenditure statement for the period except on sale of the assets.
(10)
Disposal of Fixed Assets
Disposal of fixed assets shall take place only on approval by the Council.
The Local Governments Financial and Accounting Manual 2007
173
Assuming the lorry that was re valued at Shs. 60,000,000 was immediately sold for Shs
50,000,000 the entries to record the above transaction shall be:
Date
Particulars
Dr.
Shs
50,000,000
Bank
Sale of produced government assets
Cr.
Shs
50,000,000
Narration: Being sale of lorry No……..
The lorry account shall be closed against the Fixed Asset Disposal Account as per the
following journal entry.
Date
Particulars
Dr.
Shs
100,000,000
Sale of produced government assets
Transport equipment account
Cr.
Shs
100,000,000
Narration: To close the account of lorry……. to the Fixed assets
disposal account
Closing Accumulated Depreciation Account to the Fixed Assets Disposal Account. The
balance on the Accumulated Depreciation shall be transferred to the Fixed Assets Disposal
Account, by the following journal entry:
Date
Particulars
Dr.
Shs
40,000,000
Accumulated depreciation
Sale of produced government assets account
Cr.
Shs
40,000,000
Narration: To close the Accumulated Depreciation Account to
the Fixed Assets Disposal Account
The above entries would appear in the General Ledger as follows:
XXXX COUNCIL
SALE OF PRODUCED GOVERNMENT ASSETS ACCOUNT
Date
Particulars
Folio
Dr.
Shs
Cr.
Shs
Balance
The Local Governments Financial and Accounting Manual 2007
174
Cost revaluation
100,000,000
Accumulated depreciation
Sale of a Lorry – Cash/Bank
CB
Revaluation Surplus
100,000,000
40,000,000
60,000,000
50,000,000
10,000,000
30,000,000
(20,000,000)
Narration: To close the Capital
At the end of the financial year, the gain or loss on the Assets Disposal Account shall be
transferred to the Income and Expenditure Account by the following entry assume it was a
surplus as per above examples. The journal shall be as follows:
Date Particulars
Sale of produced government asset account
Income and Expenditure Statement
Dr.
Cr.
Shs
Shs
20,000,000
20,000,000
Narration: Being surplus on the sale of produced
government assets account
The Local Governments Financial and Accounting Manual 2007
175
6.6.5
Treatment of Unexpended Balances
6.6.5.1 The Meaning of Unexpended Balances
Unexpended Balances, in accordance with the Public Finance and Accountability Act,
2003, is any moneys appropriated by parliament in any financial year which has actually
not been spent or paid out for the service of that financial year by the end of the financial
year. The same must be repaid to the consolidated fund.
6.6.5.2 Legal Background
Section 19 (1) of the Public Finance and Accountability Act, 2003 (PFAA) provides that all
unexpended balance of moneys withdrawn from the consolidated fund shall be repaid back
to the same account at the closure of the financial year. Further, Section 19(2) of the PFAA
exempts local governments from returning the consolidated fund unconditional and
equalization grants as defined under article 193 of the Constitution.
6.6.5.3 Unexpended Balances and Committed Balances
All the unexpended balances out of the release from the consolidated fund (i.e all releases
other than the unconditional grants and equalisation grants) irrespective of the availability
of commitments must be returned to the consolidated fund. All bank account balances in
respect of conditional or other grants from the central government should be returned
immediately after year end , and in any case not later than 25th of September following the
end of the financial year. However, where commitments can be ascertained to have been
entered into by the local government in time, an appropriate amount shall be reclaimed and
on verificaion may be re-allocated to the local government.
6.6.5.4 Procedure for claiming committed balances at year end
The Accounting Officer shall apply to the Permanent Secretary/Secretary to Treasury for a
non-resource allocation for the committed but unpaid amounts attaching the following:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Bank reconciliation statements for the month of June.
Cashbook extracts for the month of June.
Certificates of bank account balances as at 30th June issued by the bank
Intreme Certificates of completion for the works constituting the commitment.
Contract agreements, LPOs and invoices where applicable.
List of contractors constituting the obligations (with status of payments)
Procurement report for the month of May and June.
Any other relevant supporting documents for commitments made prior to 30th June.
Note: All documets must be certified copies.
All applications for the retantion of commited funds will be verified by the Accountant
General’s Office. The applications for retention of funds must reach the Permanent
Secretary/Secretary to Treasury by 25th of July following the end of the financial year to
which they relate.
The Local Governments Financial and Accounting Manual 2007
176
6.6.5.5 Procedure for Verification and Authority
(1) Verification shall be carried out by Accountant General’s Office of the Ministry of
Finance, Planning and Economic Development.
(2) Upon approval by Parliament of the special provisions constituting committed balances,
the Accounting Officer shall be advised of the amounts approved.
(3) The Accounting Officer shall ensure that the Local Government Council approves the
special budget for the commitments
(4) All commitments must be settled within six months following the end of the financial
year and in any case not later than by 31st December following the end of the financial
year.
(5) All funds unpaid, thereafter, shall be returned to Treasury by 1st January following the
end of the financial year.
6.6.5.6 Accounting for Committed funds at year end
(1) At the end of the year, a memorandum statement of outstanding commitments shall be
prepared and included in the final accounts.
(2) In the subsequent years, a Statement of movement in outstanding commitments shall be
shown in the notes to the accounts.
The Local Governments Financial and Accounting Manual 2007
177
7.0
FINANCIAL REPORTING
7.1
INTRODUCTION
The objective of financial record keeping is to be able to provide financial accountability
for the actions of the different managers and staff within a local government. Financial
accounting systems must ultimately end with relevant and reliable information in the form
of financial reports. The reports will be read and used by the different stakeholders to make
decisions. This chapter deals with the financial statements (reports) which are prepared by
Local Governments for use by stakeholders. Given the stewardship role, whereby the Local
Government Council is entrusted with public funds the financial reports should be simple,
comprehensive, and standardized for purposes of comparability and for ease of
understanding by the reader.
7.1.1
Legal Reporting Requirements
All local government councils and administrative units are required to produce financial
statements (Section 86 LGA, and Regulation 68, LGFAR 2007). Local governments are
required to produce monthly, quarterly and annual financial statements. The reporting
requirements are mandatory and are intended to enforce accountability of the local
government to the relevant stakeholders including the Public, Central Government,
Parliament, etc.
7.1.2
Monthly Financial Statements/Reports
1)
The Head of Finance shall produce the following financial statements at the end of
each month and forward them to the Executive Committee through the Chief
Executive not later than 15th of the following month:
(a) A Trial balance. This is a statement showing in separate columns the totals of
all debit and credit entries in the General ledger.
(b) A consolidated statement of income and expenditure for all recurrent and
development revenues and expenditures of the Council. This statement should
include year to date performance in comparison to the Budget.
(c) A Balance Sheet at the end of the month.
2)
The Head of a department shall produce the following financial statements at the
end of each month and forward them to Head of Finance not later than 7th of the
following month
(a) Financial statement for all recurrent and development revenues and expenditures
of the departments.
(b) Bank reconciliation statements and supporting copies of bank statements for the
department.
(c) Descriptive monthly progress report and key departmental output performance
report.
The Local Governments Financial and Accounting Manual 2007
178
7.1.3 Quarterly Financial Statements/Reports
(1) The Head of Finance shall produce the following financial statements at the end
of each Quarter and forward them to the Executive Committee through the Chief
Executive not later than 15th of the month following the end of the Quarter:
(a) A Year to Date Trial balance. This is a statement showing in separate columns
the totals of all debit and credit entries in the General ledger.
(b) A consolidated statement of income and expenditure for all recurrent and
development revenues and expenditures of the Council for the year to date. This
statement should include the current Quarter’s performance in comparison to the
Budget.
(c) A Balance Sheet at the end of the Quarter.
(2) The Head of a department shall produce the following financial statements at the
end of each Quarter and forward them to Head of Finance not later than 7th of the
month following the Quarter.
(a) Financial statement for all recurrent and development revenues and expenditures
of the departments.
(b) Bank reconciliation statements and supporting copies of bank statements for the
department.
(c) Descriptive Quarterly progress report and key departmental output performance
report.
7.1.4
Annual Financial Statements/Reports
Every Local Government Council Chief Executive is required to produce statements
of Financial Statements within three months after the end of each accounting period
in accordance with section 86 of the Local Government Act, for submission to the
Auditor General and must include the following:
(1) Trial Balance
(2) Income and expenditure statement
(3) Balance Sheet
(4) Cash Flow Statement
The financial statement should be accompanied by the following notes and
schedules:
(1) Accounting Policies followed in the preparation of Financial Statements
(2) Details of Income
(3) Details of Expenditure
(4) Bank reconciliation statements
(5) Certificates of balances of all Council accounts from the Bank(s)
(6) Schedules of imprests and advances
(7) Schedule of debtors and creditors
(8) Schedules of fixed assets
The Local Governments Financial and Accounting Manual 2007
179
7.2. FORMATS OF FINANCIAL STATEMENTS UNDER CASH ACCOUNTING:
The revenue and expenditure codes provided in following forms are not compressive, local
governments must follow and apply the codes in accordance with the Charts of Accounts.
7.2.1
Form FR 34: Trial Balance
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
CREDITS
REVENUE
113101
114504
114505
114506
114508
114509
141501
141541
142201
142206
142207
142208
142212
142214
142219
145003
133311
133312
133313
133314
133318
133320
133322
133327
133328
133329
133330
133332
133334
133335
133336
133337
133341
133343
132101
132201
Local Revenue
Land Fees
Application Fees
Business licenses
Liquor licenses
Other licenses
Stamp Duty
Rent and Rates - Non-Produced Assets
Rent and Rates - Non-Produced Assets
Park Fees (incl. Street Parking)
Animal and Crop Husbandry related Le
Registration (e.g. Births, Deaths, M
Registration of Businesses
Agency Fees
Market /Gate Charges
Other Fees and Charges
Miscellaneous Receipts / Incomes
Government Grants
Conditional transfers to Primary Edu
Conditional transfers to Road Mainte
Conditional transfers to PHC- Non wa
Conditional transfers to Agric Exten
Conditional transfers to NGO Hospita
Conditional transfers to Functional
Conditional transfers to DTB/DSC/PAC
Conditional transfers to PAF monitor
Conditional transfers to Rural water
NAADS
Conditional transfers to Public Libr
Conditional transfers to Health Trai
Conditional transfers to community d
Start-up costs
Conditional transfers to environment
Conditional transfers to women, yout
Compansation for Graduated Tax ( Dis
Conditional Transfers to CAO/DCAO &
Donor Funds
Current Multilateral Development partners
Capital Multilateral Development partners
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
EXPENSES
The Local Governments Financial and Accounting Manual 2007
180
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
CREDITS
CAO's Office
211101
211102
211103
213001
213002
221001
221002
221003
221007
221008
221009
221011
222001
223005
223006
224002
225002
227004
228002
228003
228004
General Staff Salaries
Contract Staff Salaries (Incl. Casua
Allowances
Medical Expenses(To Employees)
Incapacity, death benefits and funer
Advertising and Public Relations
Workshops and Seminars
Staff Training
Books, Periodicals and Newspapers
Computer Supplies and IT Services
Welfare and Entertainment
Printing, Stationery, Photocopying a
Telecommunications
Electricity
Water
General Supply of Goods and Services
Consultancy Services- Long-term
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Machinery, Equipment and
Maintenance Other
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Human Resource Management
211103 Allowances
221001 Advertising and Public Relations
221003 Staff Training
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
225001 Consultancy Services- Short Term
225002 Consultancy Services- Long-term
227001 Travel Inland
x
x
x
x
x
x
x
x
County Administration
211103 Allowances
227004 Fuel, Lubricants and Oils
x
x
Information and Public Administration
211103 Allowances
221001 Advertising and Public Relations
221011 Printing, Stationery, Photocopying a
x
x
x
Office Support Services
221016 IFMS Recurrent Costs
x
Police
211103
Allowances
x
Records Management
The Local Governments Financial and Accounting Manual 2007
181
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
211103
221008
221011
223003
Allowances
Computer Supplies and IT Services
Printing, Stationery, Photocopying a
Rent - Produced Assets to private en
DEBITS
x
x
x
x
CREDITS
FINANCE
Administration Office
211101 General Staff Salaries
211103 Allowances
212105 Pension for Local Governmants
213001 Medical Expenses(To Employees)
213003 Retrenchment costs
221001 Advertising and Public Relations
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Services
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying a
221012 Small Office Equipment
221016 IFMS Recurrent Costs
222001 Telecommunications
223001 Property Expenses
223005 Electricity
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
263204 Transfers to other gov't units(capit
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Revenue
211103
221011
222001
224002
227004
Allowances
Printing, Stationery, Photocopying a
Telecommunications
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
Budgeting
211103
221011
227004
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
Expenditure
221011
227004
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
Accounting
211103
221008
221011
222001
Allowances
Computer Supplies and IT Services
Printing, Stationery, Photocopying a
Telecommunications
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
182
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
CREDITS
STATUTORY BODIES
Clerk to Council
211101
211103
221001
221007
221009
221011
223005
227004
228002
General Staff Salaries
Allowances
Advertising and Public Relations
Books, Periodicals and Newspapers
Welfare and Entertainment
Printing, Stationery, Photocopying a
Electricity
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
District Contracts Committee
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221008 Computer Supplies and IT Services
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying a
x
x
x
x
x
x
District Service Commission
211101 General Staff Salaries
211103 Allowances
221001 Advertising and Public Relations
221004 Recruitment Expenses
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
x
x
x
District Land Board
211103 Allowances
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
x
x
x
x
LG Public Accounts Committee
211103 Allowances
221008 Computer Supplies and IT Services
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
x
Council
211103
221009
221011
227004
228002
Allowances
Welfare and Entertainment
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
Standing Committee
The Local Governments Financial and Accounting Manual 2007
183
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
211101
211103
221007
221009
221011
227004
228002
228004
General Staff Salaries
Allowances
Books, Periodicals and Newspapers
Welfare and Entertainment
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Other
DEBITS
x
x
x
x
x
x
x
x
CREDITS
PRODUCTION
Agricultural Production Office
211101 General Staff Salaries
211103 Allowances
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Services
221011 Printing, Stationery, Photocopying a
222001 Telecommunications
223005 Electricity
223006 Water
224002 General Supply of Goods and Services
225001 Consultancy Services- Short Term
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
x
Crops
211103
221002
221005
221008
221010
221011
224002
227001
227004
228002
Allowances
Workshops and Seminars
Hire of Venue (chairs, projector, et
Computer Supplies and IT Services
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Travel Inland
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
Veterinary
211103
221001
221002
221005
221011
223006
224002
227004
Allowances
Advertising and Public Relations
Workshops and Seminars
Hire of Venue (chairs, projector, et
Printing, Stationery, Photocopying a
Water
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
x
x
x
Fisheries
211101
211103
General Staff Salaries
Allowances
x
x
The Local Governments Financial and Accounting Manual 2007
184
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
221011
224002
227004
228002
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
DEBITS
x
x
x
x
Vermin Control
221011
Printing, Stationery, Photocopying a
x
Entomology
221011
Printing, Stationery, Photocopying a
x
Commercial Services and Trade
211103 Allowances
221011 Printing, Stationery, Photocopying a
222002 Postage and Courier
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
CREDITS
HEALTH
District Health Officer
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221007 Books, Periodicals and Newspapers
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying a
222001 Telecommunications
223001 Property Expenses
223005 Electricity
223006 Water
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equipment and
228004 Maintenance Other
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Primary Health Care
211101 General Staff Salaries
211103 Allowances
224001 Medical and Veterinary supplies
224002 General Supply of Goods and Services
x
x
x
x
EDUCATION
District Education Office
211101 General Staff Salaries
211103 Allowances
221011 Printing, Stationery, Photocopying a
223005 Electricity
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
185
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
227004
228002
Inspection
211103
221001
221002
221011
227004
228002
Fuel, Lubricants and Oils
Maintenance - Vehicles
DEBITS
x
x
Allowances
Advertising and Public Relations
Workshops and Seminars
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
CREDITS
Sports
211103
221011
227004
228002
Special Education
211103 Allowances
x
Uganda Primary Education
211101 General Staff Salaries
211103 Allowances
221003 Staff Training
221007 Books, Periodicals and Newspapers
224002 General Supply of Goods and Services
x
x
x
x
x
Secondary Education
211101 General Staff Salaries
x
Tertiary Education
211101 General Staff Salaries
224002 General Supply of Goods and Services
x
x
Public Libraries
211102
211103
221001
221008
221009
221010
221011
222001
224002
227004
228002
x
x
x
x
x
x
x
x
x
x
x
Contract Staff Salaries (Incl. Casua
Allowances
Advertising and Public Relations
Computer Supplies and IT Services
Welfare and Entertainment
Special Meals and Drinks
Printing, Stationery, Photocopying a
Telecommunications
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
WORKS
Works Office
The Local Governments Financial and Accounting Manual 2007
186
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
x
x
x
x
x
x
x
211101
211103
221011
223006
227004
228002
228003
General Staff Salaries
Allowances
Printing, Stationery, Photocopying a
Water
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Machinery, Equipment and
211103
221001
221002
221011
221012
222001
223005
223006
227001
227004
228002
Allowances
Advertising and Public Relations
Workshops and Seminars
Printing, Stationery, Photocopying a
Small Office Equipment
Telecommunications
Electricity
Water
Travel Inland
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
211101
211103
221008
221010
221011
223001
223005
223006
224002
227004
228002
General Staff Salaries
Allowances
Computer Supplies and IT Services
Special Meals and Drinks
Printing, Stationery, Photocopying a
Property Expenses
Electricity
Water
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
CREDITS
Civil
Water
NATURAL RESOURCES
Administrative Office
211101 General Staff Salaries
211103 Allowances
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
x
x
x
x
x
Forests
211103
221011
224002
227004
Allowances
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
Wetlands
The Local Governments Financial and Accounting Manual 2007
187
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
211103
221005
221010
221011
227004
Environment
211103
221010
221011
224002
227004
Allowances
Hire of Venue (chairs, projector, et
Special Meals and Drinks
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
DEBITS
x
x
x
x
x
Allowances
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
Land Management
211103 Allowances
221008 Computer Supplies and IT Services
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
x
x
x
x
x
x
CREDITS
COMMUNITY BASED SERVICES
Administrative Office
211101 General Staff Salaries
211103 Allowances
221001 Advertising and Public Relations
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying a
222001 Telecommunications
227004 Fuel, Lubricants and Oils
x
x
x
x
x
x
x
Probation and Social Welfare
211103 Allowances
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
Community Development
211103 Allowances
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
Gender
211103
Allowances
Children and Youth
211103 Allowances
221009 Welfare and Entertainment
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying a
x
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
188
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
227004
Fuel, Lubricants and Oils
Disability and Elderly
211103 Allowances
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
DEBITS
x
CREDITS
x
x
x
x
x
Culture
211103
221011
227004
Women Councils
211103
221002
221010
221011
227004
228002
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
Allowances
Workshops and Seminars
Special Meals and Drinks
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
Functional Adult Literacy
211103 Allowances
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
PLANNING UNIT
Planning Office
211101
221002
221008
221009
221010
221011
221012
223005
223006
224002
227001
227004
General Staff Salaries
Workshops and Seminars
Computer Supplies and IT Services
Welfare and Entertainment
Special Meals and Drinks
Printing, Stationery, Photocopying a
Small Office Equipment
Electricity
Water
General Supply of Goods and Services
Travel Inland
Fuel, Lubricants and Oils
x
x
x
x
x
x
x
x
x
x
x
x
Statistics
221011
227004
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
Population
The Local Governments Financial and Accounting Manual 2007
189
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
227004
Fuel, Lubricants and Oils
DEBITS
x
CREDITS
INTERNAL AUDIT
Internal Audit Office
211101 General Staff Salaries
211103 Allowances
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
x
ASSETS
321102
321103
321104
Revenue accounts
Expenditure accounts
Project accounts
x
x
x
LIABILITIES
415005
415006
With-holding Tax Payable
Deposits Received
x
x
LG Revenue reserves
x
RESERVES
512201
GRAND TOTAL
XXX
XXX
The Local Governments Financial and Accounting Manual 2007
190
7.2.2
Form FR 35 Statement of Income and Expenditure:
XXX LOCAL GOVERNMENT
Income and Expenditure Statement
For the Period: _______
JUN XX
JUN XX
JUN XX-1
BUDGET
(shs)
ACTUAL
REVENUE
Local Revenue
Government Grants
Donor Funds
TOTAL REVENUE
EXPENDITURE
Administration
Finance
Statutory Bodies
Production
Health
Education
Works
Natural Resources
Community Based Services
Planning Unit
Internal Audit
The Local Governments Financial and Accounting Manual 2007
191
TOTAL EXPENDITURE
SURPLUS/<DEFICIT> OF REVENUE OVER
EXPENDITURE
7.2.3 Balance Sheet
XXX LOCAL GOVERNMENT
Notes
Balance Sheet as at ------------
Current YTDActual
JUN XX
Shs
Prior YTD-Actual
JUN XX-1
Shs
ASSETS
Current Assets
Cash and Cash Equivalents
Advances
Investments (Short term)
2
3
4
Total Assets
LIABILITIES
Current Liabilities
Short Term Borrowings
Non-Current Liabilities
Borrowings/Loans
5a
5b
Total Liabilities
NET ASSETS
Represented by:
Capital Reserves
Revenue Reserves
NET WORTH
Reviewed and signed by:
--------------------------------------Head of Finance
--------------------------------------Chief Executive
The Local Governments Financial and Accounting Manual 2007
192
7.2.4
Form FR 36 Cash Flow Statement:
XXX LOCAL GOVERNMENT
Cash Flow Statement for the year ended 30 June 200X [Direct Method]
30 June 200X
Notes
30 June 200X-1
Shs
Shs
CASH FLOWS FROM OPERATING ACTIVITIES
Taxation
Sales of goods and services
Monthly Grants Releases (RTS)
Quarterly Grant Releases (DTS)
Donor Funds
Interest received
Sale of assets
Other receipts
Total receipts from operating revenues
PAYMENTS FOR OPERATING EXPENSES:
Employee costs
Goods and services consumed
Interest expense
Subsidies
The Local Governments Financial and Accounting Manual 2007
193
30 June 200X
Notes
30 June 200X-1
Shs
Shs
CASH FLOWS FROM OPERATING ACTIVITIES
Grants paid
Social benefits
Other expenses
Net Advances paid
Domestic arrears paid during the year
Pension Arrears paid during the Year
Extraordinary items
Total payments for operating activities
Net cash inflows/(outflows) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipments
Proceeds from sale of property, plant and equipments
Purchase of investments
Proceeds from sale of investments
Purchase of investment properties
Proceeds from sale of investment properties
Net cash inflows/(outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from external borrowings
Repayments of external borrowings
Proceeds from other domestic borrowings
Repayments of other domestic borrowings
Net cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
The Local Governments Financial and Accounting Manual 2007
194
The Local Governments Financial and Accounting Manual 2007
195
7.3 FORMATS OF FINANCIAL STATEMENTS UNDER ACCRUAL
ACCOUNTING:
Form FR 37 Trial Balance (Accrual Accounting):
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
CREDITS
REVENUE
113101
114504
114505
114506
114508
114509
141501
141541
142201
142206
142207
142208
142212
142214
142219
145003
132101
132201
133103
133104
133203
133204
133304
133305
133306
133307
133308
133310
133311
133312
133313
133314
133318
133320
133322
133327
133328
Local Revenue
Land Fees
Application Fees
Business licenses
Liquor licenses
Other licenses
Stamp Duty
Rent and Rates - Non-Produced Assets
Rent and Rates - Non-Produced Assets
Park Fees (incl. Street Parking)
Animal and Crop Husbandry related Le
Registration (e.g. Births, Deaths, M
Registration of Businesses
Agency Fees
Market /Gate Charges
Other Fees and Charges
Miscellaneous Receipts / Incomes
Donor Funds
Current Multilateral Development partners
Capital Multilateral Development partners
Government Grants
LG Conditional Grants(current)
LG Unconditional Grants(current)
LG Conditional Grants(capital)
LG Unconditional Grants(capital)
Conditional transfers to Tertiary Sa
Conditional transfers to Primary Sal
Conditional transfers to Secondary S
Conditional transfers to PHC Salaries
Conditional transfers to Agric. Ext
Conditional transfers to DSC Chairs
Conditional transfers to Primary Education
Conditional transfers to Road Maintenance
Conditional transfers to PHC- Non wage
Conditional transfers to Agric Extension
Conditional transfers to NGO Hospital
Conditional transfers to Functional
Conditional transfers to DTB/DSC/PAC
Conditional transfers to PAF monitor
Conditional transfers to Rural water
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
The Local Governments Financial and Accounting Manual 2007
196
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
133329
133330
133332
133334
133335
133336
133337
133341
133343
NAADS
Conditional transfers to Public Library
Conditional transfers to Health Traing
Conditional transfers to community d
Start-up costs
Conditional transfers to environment
Conditional transfers to women, youth
Compensation for Graduated Tax ( Dist
Conditional Transfers to CAO/DCAO &
211101
211102
211103
213001
213002
221001
221002
221003
221007
221008
221009
221011
222001
223005
223006
224002
225002
227004
228002
228003
228004
General Staff Salaries
Contract Staff Salaries (Incl. Casual
Allowances
Medical Expenses(To Employees)
Incapacity, death benefits and funeral
Advertising and Public Relations
Workshops and Seminars
Staff Training
Books, Periodicals and Newspapers
Computer Supplies and IT Services
Welfare and Entertainment
Printing, Stationery, Photocopying a
Telecommunications
Electricity
Water
General Supply of Goods and Services
Consultancy Services- Long-term
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Machinery, Equipment and
Maintenance Other
CREDITS
X
X
X
X
X
X
X
X
X
EXPENSES
CAO's Office
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Human Resource Management
211103 Allowances
221001 Advertising and Public Relations
221003 Staff Training
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
225001 Consultancy Services- Short Term
225002 Consultancy Services- Long-term
227001 Travel Inland
x
x
x
x
x
x
x
x
County Administration
211103 Allowances
227004 Fuel, Lubricants and Oils
x
x
Information and Public Administration
211103 Allowances
x
The Local Governments Financial and Accounting Manual 2007
197
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
221001
221011
Advertising and Public Relations
Printing, Stationery, Photocopying a
Office Support Services
221016 IFMS Recurrent Costs
DEBITS
x
x
CREDITS
x
Police
211103
Allowances
x
Allowances
Computer Supplies and IT Services
Printing, Stationery, Photocopying a
Rent - Produced Assets to private en
x
x
x
x
General Staff Salaries
Allowances
Pension for Local Governments
Medical Expenses(To Employees)
Retrenchment costs
Advertising and Public Relations
Books, Periodicals and Newspapers
Computer Supplies and IT Services
Welfare and Entertainment
Printing, Stationery, Photocopying a
Small Office Equipment
IFMS Recurrent Costs
Telecommunications
Property Expenses
Electricity
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Civil
Maintenance - Vehicles
Transfers to other gov't units(capital
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
211103
221011
222001
224002
227004
Allowances
Printing, Stationery, Photocopying a
Telecommunications
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
211103
221011
227004
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
Records Management
211103
221008
221011
223003
FINANCE
Administration Office
211101
211103
212105
213001
213003
221001
221007
221008
221009
221011
221012
221016
222001
223001
223005
224002
227004
228001
228002
263204
Revenue
Budgeting
The Local Governments Financial and Accounting Manual 2007
198
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
CREDITS
Expenditure
221011
227004
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
211103
221008
221011
222001
Allowances
Computer Supplies and IT Services
Printing, Stationery, Photocopying a
Telecommunications
x
x
x
x
Accounting
STATUTORY BODIES
Clerk to Council
211101
211103
221001
221007
221009
221011
223005
227004
228002
General Staff Salaries
Allowances
Advertising and Public Relations
Books, Periodicals and Newspapers
Welfare and Entertainment
Printing, Stationery, Photocopying a
Electricity
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
District Contracts Committee
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221008 Computer Supplies and IT Services
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying a
x
x
x
x
x
x
District Service Commission
211101 General Staff Salaries
211103 Allowances
221001 Advertising and Public Relations
221004 Recruitment Expenses
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
x
x
x
District Land Board
211103
221009
221011
224002
x
x
x
x
Allowances
Welfare and Entertainment
Printing, Stationery, Photocopying a
General Supply of Goods and Services
LG Public Accounts Committee
211103 Allowances
221008 Computer Supplies and IT Services
221011 Printing, Stationery, Photocopying a
x
x
x
The Local Governments Financial and Accounting Manual 2007
199
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
x
227004
Fuel, Lubricants and Oils
211103
221009
221011
227004
228002
Allowances
Welfare and Entertainment
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
Standing Committee
211101
211103
221007
221009
221011
227004
228002
228004
General Staff Salaries
Allowances
Books, Periodicals and Newspapers
Welfare and Entertainment
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Other
x
x
x
x
x
x
x
x
CREDITS
Council
PRODUCTION
Agricultural Production Office
211101 General Staff Salaries
211103 Allowances
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Services
221011 Printing, Stationery, Photocopying a
222001 Telecommunications
223005 Electricity
223006 Water
224002 General Supply of Goods and Services
225001 Consultancy Services- Short Term
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
x
Crops
211103
221002
221005
221008
221010
221011
224002
227001
227004
228002
Allowances
Workshops and Seminars
Hire of Venue (chairs, projector, et
Computer Supplies and IT Services
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Travel Inland
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
211103
221001
Allowances
Advertising and Public Relations
x
x
Veterinary
The Local Governments Financial and Accounting Manual 2007
200
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
221002
221005
221011
223006
224002
227004
Workshops and Seminars
Hire of Venue (chairs, projector, et
Printing, Stationery, Photocopying a
Water
General Supply of Goods and Services
Fuel, Lubricants and Oils
DEBITS
x
x
x
x
x
x
211101
211103
221011
224002
227004
228002
General Staff Salaries
Allowances
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
Printing, Stationery, Photocopying a
x
Printing, Stationery, Photocopying a
x
Commercial Services and Trade
211103 Allowances
221011 Printing, Stationery, Photocopying a
222002 Postage and Courier
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
CREDITS
Fisheries
Vermin Control
221011
Entomology
221011
HEALTH
District Health Officer
211103
221001
221002
221007
221010
221011
222001
223001
223005
223006
224002
227004
228002
228003
228004
Allowances
Advertising and Public Relations
Workshops and Seminars
Books, Periodicals and Newspapers
Special Meals and Drinks
Printing, Stationery, Photocopying a
Telecommunications
Property Expenses
Electricity
Water
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Machinery, Equipment and
Maintenance Other
Primary Health Care
211101 General Staff Salaries
211103 Allowances
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
201
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
224001
224002
Medical and Veterinary supplies
General Supply of Goods and Services
DEBITS
x
x
CREDITS
EDUCATION
District Education Office
211101 General Staff Salaries
211103 Allowances
221011 Printing, Stationery, Photocopying a
223005 Electricity
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
x
Inspection
211103
221001
221002
221011
227004
228002
Allowances
Advertising and Public Relations
Workshops and Seminars
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
211103
221011
227004
228002
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
Allowances
x
Sports
Special Education
211103
Uganda Primary Education
211101 General Staff Salaries
211103 Allowances
221003 Staff Training
221007 Books, Periodicals and Newspapers
224002 General Supply of Goods and Services
x
x
x
x
x
Secondary Education
211101 General Staff Salaries
x
Tertiary Education
211101
224002
General Staff Salaries
General Supply of Goods and Services
x
x
Public Libraries
211102
211103
221001
221008
221009
Contract Staff Salaries (Incl. Casua
Allowances
Advertising and Public Relations
Computer Supplies and IT Services
Welfare and Entertainment
x
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
202
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
x
x
x
x
x
x
221010
221011
222001
224002
227004
228002
Special Meals and Drinks
Printing, Stationery, Photocopying a
Telecommunications
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
211101
211103
221011
223006
227004
228002
228003
General Staff Salaries
Allowances
Printing, Stationery, Photocopying a
Water
Fuel, Lubricants and Oils
Maintenance - Vehicles
Maintenance Machinery, Equipment and
x
x
x
x
x
x
x
211103
221001
221002
221011
221012
222001
223005
223006
227001
227004
228002
Allowances
Advertising and Public Relations
Workshops and Seminars
Printing, Stationery, Photocopying a
Small Office Equipment
Telecommunications
Electricity
Water
Travel Inland
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
211101
211103
221008
221010
221011
223001
223005
223006
224002
227004
228002
General Staff Salaries
Allowances
Computer Supplies and IT Services
Special Meals and Drinks
Printing, Stationery, Photocopying a
Property Expenses
Electricity
Water
General Supply of Goods and Services
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
x
x
x
x
x
CREDITS
WORKS
Works Office
Civil
Water
NATURAL RESOURCES
Administrative Office
211101 General Staff Salaries
211103 Allowances
221011 Printing, Stationery, Photocopying a
x
x
x
The Local Governments Financial and Accounting Manual 2007
203
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
224002
227004
General Supply of Goods and Services
Fuel, Lubricants and Oils
DEBITS
x
x
211103
221011
224002
227004
Allowances
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
211103
221005
221010
221011
227004
Allowances
Hire of Venue (chairs, projector, et
Special Meals and Drinks
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
x
x
211103
221010
221011
224002
227004
Allowances
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
Land Management
211103
221008
221010
221011
224002
227004
Allowances
Computer Supplies and IT Services
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
x
CREDITS
Forests
Wetlands
Environment
COMMUNITY BASED SERVICES
Administrative Office
211101
211103
221001
221010
221011
222001
227004
General Staff Salaries
Allowances
Advertising and Public Relations
Special Meals and Drinks
Printing, Stationery, Photocopying a
Telecommunications
Fuel, Lubricants and Oils
x
x
x
x
x
x
x
Probation and Social Welfare
211103 Allowances
221011 Printing, Stationery, Photocopying a
227004 Fuel, Lubricants and Oils
x
x
x
Community Development
211103 Allowances
221011 Printing, Stationery, Photocopying a
x
x
The Local Governments Financial and Accounting Manual 2007
204
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
x
227004
Fuel, Lubricants and Oils
211103
Allowances
x
Children and Youth
211103
221009
221010
221011
227004
Allowances
Welfare and Entertainment
Special Meals and Drinks
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
x
x
Disability and Elderly
211103
221010
221011
224002
227004
Allowances
Special Meals and Drinks
Printing, Stationery, Photocopying a
General Supply of Goods and Services
Fuel, Lubricants and Oils
x
x
x
x
x
211103
221011
227004
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
Women Councils
211103
221002
221010
221011
227004
228002
Allowances
Workshops and Seminars
Special Meals and Drinks
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
Maintenance - Vehicles
x
x
x
x
x
x
CREDITS
Gender
Culture
Functional Adult Literacy
211103 Allowances
221011 Printing, Stationery, Photocopying a
224002 General Supply of Goods and Services
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
x
x
x
x
x
PLANNING UNIT
Planning Office
211101
221002
221008
221009
221010
221011
221012
223005
General Staff Salaries
Workshops and Seminars
Computer Supplies and IT Services
Welfare and Entertainment
Special Meals and Drinks
Printing, Stationery, Photocopying a
Small Office Equipment
Electricity
x
x
x
x
x
x
x
x
The Local Governments Financial and Accounting Manual 2007
205
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
x
x
x
x
223006
224002
227001
227004
Water
General Supply of Goods and Services
Travel Inland
Fuel, Lubricants and Oils
221011
227004
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
227004
Fuel, Lubricants and Oils
x
General Staff Salaries
Allowances
Printing, Stationery, Photocopying a
Fuel, Lubricants and Oils
x
x
x
x
CREDITS
Statistics
Population
INTERNAL AUDIT
Internal Audit Office
211101
211103
221011
227004
ASSETS
311101
312101
312102
312103
312104
312201
312202
312203
312301
312302
321102
321103
321104
314201
314202
314203
314204
Land
Non-Residential Buildings
Residential Buildings
Roads and Bridges
Other Structures
Transport Equipment
Machinery and Equipment
Furniture & Fixtures
Cultivated Assets
Intangible Fixed Assets
Revenue accounts
Expenditure accounts
Project accounts
Materials and supplies
Work in progress
Finished goods
Goods for resale
x
x
x
LIABILITIES
413001
413002
413003
415001
415002
415003
415004
415005
Commercial banks Loans
Interest payable on Loans
Other Loans
Trade Creditors
Sundry Creditors
Committed Creditors (Accruals)
Accountable Advances
With-holding Tax payable
The Local Governments Financial and Accounting Manual 2007
206
XXX LOCAL GOVERNMENT
TRIAL BALANCE AT
Currency UGX
DEBITS
415006
415007
CREDITS
Deposits Received
Advances from other government units
RESERVES
512201
512101
512102
LG Revenue reserves
Capital reserves
Revaluation reserves
GRAND TOTAL
x
X
X
XXX
XXX
The Local Governments Financial and Accounting Manual 2007
207
Form FR 38 Income and Expenditure Statement (Accrual Accounting)
XXX LOCAL GOVERNMENT
LG: Income and Expenditure Statement
For the Period: _______
JUN XX
JUN XX
JUN XX-1
(shs)
BUDGET
(shs)
ACTUAL
(shs)
REVENUE
Local Revenue
Government Grants
Donor Funds
TOTAL REVENUE
EXPENDITURE
Administration
Finance
Statutory Bodies
Production
Health
Education
Works
Natural Resources
Community Based Services
Planning Unit
Internal Audit
TOTAL EXPENDITURE
SURPLUS/<DEFICIT> OF REVENUE OVER
EXPENDITURE
The Local Governments Financial and Accounting Manual 2007
208
Form FR 39: Balance Sheet (Cash Basis)
XXXX COUNCIL
BALANCE SHEET AS AT 30th JUNE 200X+1
CURRENT ASSETS
NOTES
Cash and Cash Equivalents
2
Advances
3
Investments (Short term)
4
200X+1
200X
TOTAL ASSETS
LIABILITIES
Short term Borrowings (Over drafts)
5(a)
Borrowings/Loans
5(b)
Deposits received
6
TOTAL LIABILITIES
NET ASSETS
Financed by
Revenue Reserve
……………………………………………………
Head of Finance
7
…………………………….
Chief Executive
Date:………………………………………...
The Local Governments Financial and Accounting Manual 2007
209
Form FR40 Balance Sheet (Accrual Accounting)
XXX LOCAL GOVERNMENT
Balance Sheet as at ------------
Notes
Current YTD-Actual
JUN XX
Shs
Prior YTDActual
JUN XX-1
Shs
ASSETS
Current Assets
Cash and Cash Equivalents
Receivables
Inventories
Advances
Investments (Short term)
Non-Current Assets
Investments (Long term)
Other financial assets
Land, Buildings and Structures
Machinery, Furniture and Vehicles
Other fixed assets
2
3
4
5
6(a)
6(b)
Total Assets
LIABILITIES
Current Liabilities
Payables
Short Term Borrowings
Deposits
Non-Current Liabilities
Borrowings/Loans
Employee Benefits
7
8a
9
8b
10
Total Liabilities
NET ASSETS
Represented by:
Revenue Reserves
Capital Reserves
11
12
NET WORTH
Reviewed and signed by:
--------------------------------------Head of Finance
--------------------------------------Chief Executive
The Local Governments Financial and Accounting Manual 2007
210
Form FR 41 Cash Flow Statement
XXX LOCAL GOVERNMENT
Cash Flow Statement for the year ended 30 June 200X [Direct Method]
Notes
30 June
200X
30 June
200X-1
Shs
Shs
CASH FLOWS FROM OPERATING ACTIVITIES
Taxation
Sales of goods and services
Monthly Grants Releases (RTS)
Quarterly Grant Releases (DTS)
Donor Funds
Interest received
Sale of assets
Other receipts
Total receipts from operating revenues
PAYMENTS FOR OPERATING EXPENSES:
Employee costs
Goods and services consumed
Interest expense
Subsidies
Grants paid
Social benefits
Other expenses
Net Advances paid
Domestic arrears paid during the year
The Local Governments Financial and Accounting Manual 2007
211
Notes
30 June
200X
30 June
200X-1
Shs
Shs
Pension Arrears paid during the Year
Extraordinary items
Total payments for operating activities
Net cash inflows/(outflows) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipments
Proceeds from sale of property, plant and equipments
Purchase of investments
Proceeds from sale of investments
Purchase of investment properties
Proceeds from sale of investment properties
Net cash inflows/(outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from external borrowings
Repayments of external borrowings
Proceeds from other domestic borrowings
Repayments of other domestic borrowings
Net cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
The Local Governments Financial and Accounting Manual 2007
212
7.4 SCHEDULES AND NOTES TO THE FINANCIAL STATEMENTS:
A Local Government should set out these policies and principles clearly. The policies and principles are either
based on Cash Accounting or Accrual Accounting and a local government should adopt the following format
and amend as appropriate:
7.4.1 Notes to the Financial Statements
Note 1) Statement of Accounting Policies – Cash Basis of Accounting
These will be issued separately in conformity with Regulation 57 of the Local Governments Financial and
Accounting Regulations.
Note 2) Cash and Cash Equivalents
These will comprise of all imprest cash and bank balances on all Bank Accounts and is as follows:
Cash and cash equivalents
Revenue accounts
Expenditure accounts
Project accounts
Other accounts
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 3: Advances;
This comprises of prepayments for services and goods to be received after the end of the financial year and
advances to departments and staff that had not been retired at the end of the Financial Year.
Advances
Departmental Advances
Staff Advances
Prepayments to suppliers
Other advances
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 4: Investments:
This comprises of the following
Investments
Treasury Bills
Shares
Debentures
Other Investments
Total
The Local Governments Financial and Accounting Manual 2007
213
Note 5a) Short term Borrowings (overdrafts):
This comprises of bank overdrafts and balances of overdrawn bank accounts and any other borrowings of a
short-term nature. Any long-term loans with less than a year to maturity have been reclassified to short-term
borrowings.
Short term borrowings
Bank overdrafts
Over drawn bank accounts
Loans
Other short term borrowings
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 5b) Borrowings/Loan
This will comprise of the outstanding balances on loans of the Council with a maturity of more than one year
and the unpaid interest on such loans.
Long Term Borrowings
Loans from Commercial Banks
Other Loans
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XXX
XX
XX
XXX
Note 6: Deposits
These will comprise of balances on deposits accounts payable to either third parties or refundable to
depositors eg PAYE, NSSF, Withholding Tax, Contract deposits and retention monies.
Note 7 Revenue Reserves
These will comprise of accumulated Surpluses (Deficits) of income over expenditure. The accumulated
surplus/(deficits) will be computed as follows:
Balance brought forward from previous financial year
Surplus/(Deficits) for the year
Balance carried forward
Shs.
X
X
------------X
=======
The Local Governments Financial and Accounting Manual 2007
214
Accounting Principles and Notes to the Accounts under Accrual Accounting:
Note 1) Statement of Accounting Policies – Accrual Basis of Accounting
These will be issued separately in conformity with section 57 of the Local Governments Financial and
Accounting Regulations.
Note 2) Cash and Cash Equivalents
These will comprise of all imprest cash and bank balances on all Bank Accounts and is as follows:
Cash and cash equivalents
Revenue accounts
Expenditure accounts
Project accounts
Other accounts
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 3 Receivables
This comprises of debtors for services rendered by council and not yet paid for as at the end of the Financial
Year and could be broken down between Domestic and Foreign if need be.
Receivables
Current Year
Prior Year
JUN XX
JUN XX-1
Domestic
Foreign
Total
XX
XX
XXX
XX
XX
XXX
Note 4 Inventories
This comprises of stock and store balances as established by the Board of Survey at the end of the year and
reconciled to the stores records plus assets of short life span such as loose tools. This is only applicable in
circumstances where such assets have not been fully written off to the Income and Expenditure statement at
purchase.
Inventories
Current Year
Prior Year
JUN XX
JUN XX-1
Stock and Stores Balances
Loose tools
Total
XX
XX
XXX
XX
XX
XXX
Note 5: Advances;
This comprises of prepayments for services and goods to be received after the end of the financial year and
advances to departments and staff that had not been retired at the end of the Financial Year.
Advances
Departmental Advances
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
The Local Governments Financial and Accounting Manual 2007
215
Advances
Staff Advances
Prepayments to suppliers
Other advances
Total
Current Year
JUN XX
XX
XX
XX
XXX
Prior Year
JUN XX-1
XX
XX
XX
XXX
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 6a: Investments- (Short Term) :
This comprises of the following:
Investments
Treasury Bills
Shares
Debentures
Other Investments
Total
Note 6b takes the same format as Note 6a)
Note 7: Payables:
This represents balances outstanding on supplier accounts of goods and services which have not been paid by
the time of drawing the balance sheet. (It can be classified between domestic and foreign)
Payables
Domestic
Foreign
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XXX
XX
XX
XXX
Note 8a) Short term Borrowings:
This comprises of bank overdrafts and balances of overdrawn bank accounts and any other borrowings of a
short-term nature. Any long-term loans with less than a year to maturity have been reclassified to short-term
borrowings.
Short term borrowings
Bank overdrafts
Over drawn bank accounts
Loans
Other short term borrowings
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
The Local Governments Financial and Accounting Manual 2007
216
Note 8b) Borrowings/Loan
This will comprise of the outstanding balances on loans of the Council with a maturity of more than one year
and the unpaid interest on such loans.
Borrowings/Loans
Loan from Stanbic bank
Loan from Standard Chartered Bank
EADB Loans - etc
Other long term borrowings
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XX
XX
XXX
XX
XX
XX
XX
XXX
Note 9: Deposits
These will comprise of balances on deposits accounts payable to either third parties or refundable to
depositors eg PAYE, NSSF, Withholding Tax, Contract deposits and retention monies
Note 10 Employee Benefits
This comprises of accrued pension and gratuity benefits as at the Balance Sheet Date.
Employee benefits
Pension
Gratuity
Total
Current Year
JUN XX
Prior Year
JUN XX-1
XX
XX
XXX
XX
XX
XXX
Note 11 Revenue Reserves
These will comprise of accumulated Surpluses (Deficits) of income over expenditure. The accumulated
surplus/(deficits) will be computed as follows:
Balance brought forward from previous financial year
Surplus/(Deficits) for the year
Balance carried forward
Shs.
X
X
------------X
=======
Note 12 Capital Reserves
These will comprise of accumulated capital reserves. The accumulated capital reserves will be computed as
follows:
Balance brought forward from previous financial year
Net movements in the capital reserve during the year
Balance carried forward
Shs.
X
X
------------X
=======
Note that; The net movement in the capital reserves during the year consists of the net increase (or decrease)
on the reserves due to the closing off to the capital reserves of the revaluation surpluses/(deficit) for the year
The Local Governments Financial and Accounting Manual 2007
217
and the capital discharge account (where applicable) for internally financed assets, or any other accounting
entries and adjustments that affect the capital reserves.
The Local Governments Financial and Accounting Manual 2007
218
Form FR 42 Details of Income
XXX LOCAL GOVERNMENT
DETAILS OF REVENUE
JUN-XX
Account
Approved
Estimates
JUN-XX
Actual
Revenue
JUN-XX
(Under)/Over
Performance
Taxes on Property
113101 Land Fees
Taxes on Goods and Services
114504 Application Fees
114505 Business licenses
114506 Liquor licenses
114508 Other licenses
114509 Stamp Duty
Grants From International Organisations
132101 Current Multilateral Devel partners
132201 Capital Multilateral Develp Partners
Grants From Other General Govt Units [Domestic ]
133103 LG Conditional Grants(current)
133104 LG Unconditional Grants(current)
133106 Transfers Received From Other Govt Units
133203 LG Conditional Grants(capital)
133204 LG Unconditional Grants(capital)
133304 Conditional transfers to Tertiary Salari
133305 Conditional transfers to Primary Salarie
133306 Conditional transfers to Secondary Salar
133307 Conditional transfers to PHC Salaries
133308 Conditional transfers to Agric. Ext Sala
133309 Conditional trans to Comm. Development.
133310 Conditional transfers to DSC Chairs Sala
133311 Conditional transfers to Primary Educati
133312 Conditional transfers to Road Maintenanc
133313 Conditional transfers to PHC- Non wage
133314 Conditional transfers to Agric Extension
133318 Conditional transfers to NGO Hospitals
133320 Conditional transfers to Functional Adul
133322 Conditional transfers to DTB/DSC/PAC/Lan
133324 Conditional transfers to Urban Water
133326 Conditional transfers to LGDP
133327 Conditional transfers to PAF monitoring
133328 Conditional transfers to Rural water
133329 NAADS
133330 Conditional transfers to Public Librarie
The Local Governments Financial and Accounting Manual 2007
219
XXX LOCAL GOVERNMENT
DETAILS OF REVENUE
JUN-XX
Account
Approved
Estimates
JUN-XX
Actual
Revenue
JUN-XX
(Under)/Over
Performance
133331 Conditional transfers to PHC - developme
133332 Conditional transfers to Health Training
133334 Conditional transfers to community devel
133335 Start-up costs
133336 Conditional transfers to environment and
133337 Conditional transfers to women, youth an
133341 Compansation for Graduated Tax ( Distric
133343 Conditional Transfers to CAO/DCAO & TCs
Property Income
141501 Rent and Rates - Non-Produced Assets fro
141541 Rent and Rates - Non-Produced Assets fro
141601 Sale of (Produced) Government Properties
Sale of Goods and Services
142101 Rent and rates produced assets from pri
142201 Park Fees (incl. Street Parking)
142205 Advertisements/Bill Boards
142206 Animal and Crop Husbandry related Levies
142207 Registration (e.g. Births, Deaths, Marriages)
142208 Registration of Businesses
142211 Replacement of graduated tax tickets
142212 Agency Fees
142213 Inspection Fees
142214 Market /Gate Charges
142219 Other Fees and Charges
Miscellaneous and Unidentified Revenue
145003 Miscellaneous Receipts / Incomes
TOTAL REVENUE
The Local Governments Financial and Accounting Manual 2007
220
Form FR 43 Details of Expenditure:
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
EXPENSES
ADMINISTRATION
CAO's Office
211101 General Staff Salaries
211102 Contract Staff Salaries (Inc
211103 Allowances
212201 Social Security Contribution
213001 Medical Expenses (To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
222002 Postage and Courier
223005 Electricity
223006 Water
224002 General Supply of Goods and
225002 Consultancy Services- Long-t
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
228004 Maintenance Other
Human Resource Management
211103 Allowances
221001 Advertising and Public Relations
221003 Staff Training
221007 Books, Periodicals and Newspapers
221011 Printing, Stationery, Photocopying and Binding
222002 Postage and Courier
224002 General Supply of Goods and
225001 Consultancy Services- Short
225002 Consultancy Services- Long-t
227001 Travel Inland
227002 Travel Abroad
County Administration
The Local Governments Financial and Accounting Manual 2007
221
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
211103 Allowances
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Information and Public Relations
211103 Allowances
221001 Advertising and Public Relations
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
225001 Consultancy Services- Short
227001 Travel Inland
227004 Fuel, Lubricants and Oils
Office Support Services
211103 Allowances
221014 Bank Charges and other Bank
221016 IFMS Recurrent Costs
Police
211103 Allowances
213002 Incapacity, death benefits a
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
Prisons
211103 Allowances
213002 Incapacity, death benefits a
221011 Printing, Stationery, Photocopying and Binding
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
Records Management
211103 Allowances
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222002 Postage and Courier
223003 Rent - Produced Assets to pr
FINANCE
Administration Office
211101 General Staff Salaries
211103 Allowances
212105 Pension for Local Government
213001 Medical Expenses(To Employee
The Local Governments Financial and Accounting Manual 2007
222
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
213002 Incapacity, death benefits a
213003 Retrenchment costs
221001 Advertising and Public Relations
221002 Workshops and Seminars
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
221016 IFMS Recurrent Costs
221017 Subscriptions
222001 Telecommunications
222002 Postage and Courier
223001 Property Expenses
223005 Electricity
224002 General Supply of Goods and
226001 Insurances
226002 Licenses
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
263204 Transfers to other gov't uni
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Revenue
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
223001 Property Expenses
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
Budgeting
211103 Allowances
221002 Workshops and Seminars
221003 Staff Training
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
Expenditure
221011 Printing, Stationery, Photocopying and Binding
The Local Governments Financial and Accounting Manual 2007
223
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
221014 Bank Charges and other Bank
222001 Telecommunications
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Accounting
211103 Allowances
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
STATUTORY BODIES
Clerk to Council
211101 General Staff Salaries
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
221014 Bank Charges and other Bank
222002 Postage and Courier
223005 Electricity
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
District Tender Board
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
District Service Commission
211101 General Staff Salaries
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221002 Workshops and Seminars
221004 Recruitment Expenses
The Local Governments Financial and Accounting Manual 2007
224
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
222002 Postage and Courier
223005 Electricity
227004 Fuel, Lubricants and Oils
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
District Land Board
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221002 Workshops and Seminars
221007 Books, Periodicals and Newspapers
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
223005 Electricity
224002 General Supply of Goods and
LG Public Accounts Committee
211103 Allowances
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
Council
211103 Allowances
221001 Advertising and Public Relations
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Standing Committee
211101 General Staff Salaries
211103 Allowances
221007 Books, Periodicals and Newspapers
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
223005 Electricity
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228004 Maintenance Other
PRODUCTION
Agricultural Production Office
211101 General Staff Salaries
The Local Governments Financial and Accounting Manual 2007
225
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221002 Workshops and Seminars
221003 Staff Training
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
222001 Telecommunications
223005 Electricity
223006 Water
224002 General Supply of Goods and
225001 Consultancy Services- Short
226001 Insurances
226002 Licenses
227002 Travel Abroad
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
Crops
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221002 Workshops and Seminars
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221014 Bank Charges and other Bank
222001 Telecommunications
223005 Electricity
223006 Water
223007 Other Utilities- (fuel, gas,
224002 General Supply of Goods and
227001 Travel Inland
227003 Carriage, Haulage, Freight a
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
The Local Governments Financial and Accounting Manual 2007
226
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Veterinary
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221002 Workshops and Seminars
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
223004 Guard and Security services
223005 Electricity
223006 Water
224001 Medical and Veterinary suppl
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
Fisheries
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221005 Hire of Venue (chairs, projector, etc)
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
Vermin Control
211103 Allowances
213002 Incapacity, death benefits a
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
Entomology
213002 Incapacity, death benefits a
The Local Governments Financial and Accounting Manual 2007
227
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
221002 Workshops and Seminars
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
224001 Medical and Veterinary suppl
227001 Travel Inland
227004 Fuel, Lubricants and Oils
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Commercial Services and Trade
211103 Allowances
221003 Staff Training
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222002 Postage and Courier
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
HEALTH
District Medical Officer (DMO)
211103 Allowances
213001 Medical Expenses (To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relationsions
221002 Workshops and Seminars
221003 Staff Training
221007 Books, Periodicals and Newspapersapers
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221014 Bank Charges and other Bank
222001 Telecommunications
223001 Property Expenses
223005 Electricity
223006 Water
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
228004 Maintenance Other
Primary Health Care
The Local Governments Financial and Accounting Manual 2007
228
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
211101 General Staff Salaries
211103 Allowances
224001 Medical and Veterinary supplies
224002 General Supply of Goods and
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
EDUCATION
District Education Office
211101 General Staff Salaries
211103 Allowances
212101 Social Security Contribution
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221001 Advertising and Public Relationsions
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapersapers
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
222001 Telecommunications
222002 Postage and Courier
223005 Electricity
223006 Water
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
Inspection
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Sports
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221003 Staff Training
221011 Printing, Stationery, Photocopying and Binding
222002 Postage and Courier
227004 Fuel, Lubricants and Oils
The Local Governments Financial and Accounting Manual 2007
229
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
228002 Maintenance - Vehicles
228004 Maintenance Other
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Special Education
211103 Allowances
221002 Workshops and Seminars
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Uganda Primary Education
211101 General Staff Salaries
211103 Allowances
221003 Staff Training
221007 Books, Periodicals and Newspapers
224002 General Supply of Goods and
Secondary Education
211101 General Staff Salaries
Tertiary Education
211101 General Staff Salaries
224002 General Supply of Goods and
Public Libraries
211102 Contract Staff Salaries (Inc
211103 Allowances
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221009 Welfare and Entertainment
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
WORKS
Works Office
211101 General Staff Salaries
211103 Allowances
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
The Local Governments Financial and Accounting Manual 2007
230
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
222002 Postage and Courier
223005 Electricity
223006 Water
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Civil
211103 Allowances
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221002 Workshops and Seminars
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
222001 Telecommunications
222002 Postage and Courier
223005 Electricity
223006 Water
227001 Travel Inland
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
228003 Maintenance Machinery, Equip
Water
211101 General Staff Salaries
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
222003 Information and Communication
223001 Property Expenses
223005 Electricity
223006 Water
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XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
224002 General Supply of Goods and
225002 Consultancy Services- Long-term
225003 Taxes on (Professional) Services
227001 Travel Inland
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
NATURAL RESOURCES
Administrative Office
211101 General Staff Salaries
211103 Allowances
213001 Medical Expenses(To Employee
213002 Incapacity, death benefits a
221003 Staff Training
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221014 Bank Charges and other Bank
222001 Telecommunications
222002 Postage and Courier
223001 Property Expenses
223005 Electricity
224002 General Supply of Goods and
227001 Travel Inland
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Forests
211103 Allowances
221001 Advertising and Public Relations
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
222001 Telecommunications
222002 Postage and Courier
223001 Property Expenses
223003 Rent - Produced Assets to pr
223005 Electricity
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
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XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
Wetlands
211103 Allowances
221005 Hire of Venue (chairs, projector, etc)
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Environment
211103 Allowances
221007 Books, Periodicals and Newspapers
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221014 Bank Charges and other Bank
222001 Telecommunications
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Land Management
211103 Allowances
221001 Advertising and Public Relations
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221017 Subscriptions
223005 Electricity
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
COMMUNITY BASED SERVICES
Administrative Office
211101 General Staff Salaries
211103 Allowances
213002 Incapacity, death benefits a
221001 Advertising and Public Relations
221005 Hire of Venue (chairs, projector, etc)
221007 Books, Periodicals and Newspapers
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
222002 Postage and Courier
227004 Fuel, Lubricants and Oils
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XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
228002 Maintenance - Vehicles
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Probation and Social Welfare
211103 Allowances
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
Social Rehabilitation
224002 General Supply of Goods and
Community Development
211103 Allowances
213002 Incapacity, death benefits a
221002 Workshops and Seminars
221003 Staff Training
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
222001 Telecommunications
223005 Electricity
223006 Water
227004 Fuel, Lubricants and Oils
228001 Maintenance - Civil
228002 Maintenance - Vehicles
Gender
211103 Allowances
221005 Hire of Venue (chairs, projector, etc)
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Children and Youth
211103 Allowances
221005 Hire of Venue (chairs, projector, etc)
221009 Welfare and Entertainment
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Disability and Elderly
211103 Allowances
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
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XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Culture
211103 Allowances
221008 Computer Supplies and IT Ser
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Labour
211103 Allowances
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Women Councils
211103 Allowances
221002 Workshops and Seminars
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
Functional Adult Literacy
211103 Allowances
221005 Hire of Venue (chairs, projector, etc)
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
PLANNING UNIT
Planning Office
211101 General Staff Salaries
221002 Workshops and Seminars
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221010 Special Meals and Drinks
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
223005 Electricity
223006 Water
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235
XXX LOCAL GOVERNMENT
DETAILS OF EXPENDITURE
For the Period: JUN-XX
Currency: UGX
Account
224002 General Supply of Goods and
227001 Travel Inland
227004 Fuel, Lubricants and Oils
228003 Maintenance Machinery, Equipment
Approved
Estimates
Actual
Expenditure
(Under)/Over
Estimate
Statistics
221003 Staff Training
221008 Computer Supplies and IT Services
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
Population
221002 Workshops and Seminars
221008 Computer Supplies and IT Ser
221009 Welfare and Entertainment
221011 Printing, Stationery, Photocopying and Binding
224002 General Supply of Goods and
227004 Fuel, Lubricants and Oils
228003 Maintenance Machinery, Equip
Monitoring and Evaluation
221011 Printing, Stationery, Photocopying and Binding
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
INTERNAL AUDIT
Internal Audit Office
211101 General Staff Salaries
211103 Allowances
213001 Medical Expenses (To Employee
213002 Incapacity, death benefits a
221002 Workshops and Seminars
221008 Computer Supplies and IT Ser
221011 Printing, Stationery, Photocopying and Binding
221012 Small Office Equipment
221017 Subscriptions
222001 Telecommunications
222002 Postage and Courier
227001 Travel Inland
227004 Fuel, Lubricants and Oils
228002 Maintenance - Vehicles
GRAND TOTAL
7.4.4 Other Schedules to the Accounts
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236
(i)
Bank reconciliation statements as illustrated under section 6 AC 18
(ii) Certificates of balances of all Council accounts from the Bank(s) as provided
by
the respective banks
(iii) Schedules of imprests and advances supporting the figure for imprests and
advances carried in the balance sheet – provide a detailed listing
(iv) Schedule of debtors and creditors supporting these balances as carried in the
balance sheet - provide a detailed listing
v)
Schedules of fixed assets showing the cost, depreciation, acquisition,
disposals and net book value properly reconciled to the balance sheet.
7.5
OTHER STATEMENTS, SCHEDULES AND NOTES TO THE ANNUAL
FINANCIAL STATEMENTS.
7.5.1
Statements, Schedule and Notes.
The head of finance shall produce annually the following statements, schedule and notices.
(1)
Statement of arrears of revenue.
(2)
Statement of outstanding commitments
(3)
Statement o f losses of public assets
(4)
Statement of reported losses of pubic assets
(5)
Statement of stores and other assets acquired during the year
(6)
Statement o f disposal of physical assets during the year
(7)
Investments note
(8)
Borrowings note
(9)
Accounts payables schedule
(10)
Pension liabilities schedule.
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237
Form FR 44: Statement of Arrears of Revenues
Name of Council………………………………………………………………..
For the Financial Year ended 30 June 200X.
Statement of Arrears of Revenues for the year ended 30 June 200X
[Based on source of revenue] (Memorandum Statement)
Actual
Amounts
Collected
30 June
200X
Shs.
Opening bal
Amount remitted
to the
Consolidated
Fund
By 30 June 200X
Shs.
Billed
Due to
Consolidated
Fund
Shs,
Collected
Arrears of
Revenue
30 June 200X
Shs. Arrears
RECEIPTS
Non-tax revenue
Investment income
Dividends
Property income attributed
to insurance policy holders
Rent
Other property income
Sale by market
establishments
Administrative fees &
licenses
Incidental sale of goods
and services
Imputed fines and
penalties
Court fines and penalties
Other fines and penalties
Voluntary transfers other
than grants - current
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238
Withdrawal from income
of quasi-corporations
Miscellaneous and
unidentified revenues
Total Non-tax Revenue
Harmonise sources of revenues with the Chart of Accounts – include all revenues and not NTR alone.
This statement was approved and signed by ……………………………………… [Head of Finance]
On ………………………… [Chief Executive] …………………………………………
Form FR 45: Statement of Outstanding Commitments
Name of Council………………………………………………………………..
For the Financial Year ended 30 June 200X.
Statement of Outstanding Commitments as at 30 June 200X
Schedule
30 June 200X
Shs.
30 June 200X-1
Shs.
Commitments by nature of expenditure: Cumulative
OPERATING COMMITMENTS (PAYABLES)
Employee costs
Goods and services consumed
Interest expense
Subsidies
Grants payable
Social benefits
Other operating expenses
Finance cost
Total operating commitments
CAPITAL COMMITMENTS (PAYABLES)
Property
Plant
Equipment
Total capital commitments
TOTAL PAYABLES
ADD:
LONG TERM COMMITMENTS CARRIED FORWARD
Commitments for Extraordinary items
TOTAL COMMITMENTS
ANALYSIS OF PAYABLES FOR THE YEAR
For the current year
Employee costs
Goods and services consumed
Interest expenses
Subsidies
Grants payable
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239
Social benefits
Other operating expenses
Finance cost
Property
Plant
Equipment
Total payables for the year
This statement was approved and signed by …………………….……………………. [Head of Finance]
On ………………………………… [Chief Executive]
Form FR 46: Statement of losses of public assets
Name of Council…………………………………………..
For the Financial Year ended 30 June 200X.
Statement of losses of public moneys, stores and other assets written off, and
claims abandoned during the year ended 30 June 200X
Reference number of
reported loss/write
off/claim abandoned
Notes
30 June 200X
Shs.
30 June 200X-1
Shs.
Losses of public moneys (cash and
Cash equivalents)
Total losses of cash written off
Losses of stores
Total losses of stores written off
Other assets
Property
Plant
Equipment
Total losses of other assets
Written off
Claims abandoned
Total value of claims abandoned
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240
Total losses of public funds,
Stores and claims abandoned
This statement was approved and signed by …………………………………………… [Name of Chief Executive]
On …………………………… … [Signature of the Chief Executive] ………………………………………………
Form FR 47: Statement of reported losses of public assets
Name of Council…………………………………………………..
For the Financial Year ended 30 June 200X.
Statement of reported losses of public moneys, stores and other assets whether
or not written off during the year ended 30 June 200X
Reference number of
reported loss/write
off/claim abandoned
Notes
30 June 200X
Shs.
30 June
200X-1
Shs,
Losses of public moneys reported
(cash and cash equivalents)
Total losses of cash
Losses of stores reported
Total losses of stores reported
Losses of other assets
Property
Plant
Equipment
Total losses of other assets
reported
Total losses of public funds,
Stores and other assets reported
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241
The statement was approved and signed by …………………………………………… [Name of Chief Executive]
On …………………………………… [Signature of the Chief Executive] …………………………………………
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242
Form FR 48: Statement of stores and other assets (physical assets) acquired
during the year
Name of Council…………………………………………..
For the Financial Year ended 30 June 200X.
Statement of stores and other assets (physical assets) acquired during
the year ended 30 June 1, 200X.
Asset register number
for Current period
acquisition
30 June 200X
Cost in
Shs.
30 June 200X+1
Cost in
Shs.
By individual assets
TOTAL COST OF ASSETS
ACQUIRED
Analyzed as follows:
Land
Non- residential buildings
Roads and bridges
Transport equipment - motor vehicles, etc.
Machinery and equipment
Furniture and fittings
Total value of physical assets acquired
This statement was approved and signed by ……………………………………
[Name of Chief Executive]
On …………………………. [Signature of the Chief Executive] …………………………………………………
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243
Form FR 49: Statement of disposal of physical assets during the year
Name of Council…………………………………………………..
For the Financial Year ended 30 June 200X.
Statement of disposal of physical assets during the year ended 30 June 200X.
Year of
acquisition
Receipt
Number
Assets
register
reference
Original
Cost in
Shs.
Proceeds
On disposal
Shs
By individual assets
TOTAL PROCEEDS FROM
DISPOSALS
Analyzed as follows:
Land
Non residential buildings
Residential buildings
Roads and bridges
Transport equipment – motor
vehicles, etc
Machinery and equipment
Furniture and fittings
Total value of physical assets
acquired
This statement was approved and signed by
……………….……………………..…. [Name of Chief Executive]
On ………………………………….. [Signature of the Chief Executive]
The Local Governments Financial and Accounting Manual 2007
244
Form FR 50: Investments Note
Investments held at the year end as follows:
DOMESTIC
Schedule
30 June 200X
Shs
30 June 200X-1
Shs.
Securities other than equity (short-term)
Securities other than shares (long-term)
Shares and other equity
Financial derivatives
Sub-total for domestic
FOREIGN
Securities other than shares – foreign
Shares and other equity – foreign
Insurance technical reserves – foreign
Financial derivatives – foreign
Sub-total for foreign
Total investments
These are analysed further as follows:
Schedule
30 June 200X
30 June 200X-1
Shs
Shs.
Investments held-for-trading
Investments available-for-sale
Investments held-to-maturity
Total investments
Form FR 51 Borrowings Note
These comprise short borrowings to finance operating activities, and principally include
bank overdrafts, bank loans and any other financial arrangements, which have not been
redeemed by the year-end. Loans are raised internally and externally. Loans raised
internally are grouped as domestic loans, external loans are foreign loans and alternatively
referred to as external debts of the council. At the year-end outstanding loans were as
follows:
DOMESTIC
Schedule
30 June 200X
Shs
30 June 200X1
Shs.
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245
Loans from commercial banks
Interest payable on bank loans/borrowings
Other
Total domestic borrowings
FOREIGN
Loans from multi-laterals
Loans from foreign governments
Loans from commercial banks
Interest payable on bank loans/borrowings
Other
Total foreign borrowings
Total borrowings
Form FR 52: Accounts Payables Schedule
These are principally accounts payables, domestic and otherwise outstanding at the yearend and comprise:
Schedule
30 June 200X
Shs
30 June 200X-1
Shs.
PAYABLES
Trade Creditors
Sundry Creditors
Committed Creditors
Accountable advances
Withholding Tax payable
Deposits received
Advances from other Governments units
Miscellaneous accounts payable
Total payables
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246
Form FR 53 Pension liabilities Schedule
Pension liabilities have been accrued in the financial statements because it is the policy of
government to pay pensions to all former employees of the council who qualified for
pension under the provisions of the Pensions Act, Cap 281.
Schedule
30 June 200X
Shs
30 June 200X-1
Shs.
Former employees in Public Service
Former employees in Education Service
Former employees in Health Service
Former employees in Military Service
Former employees in Police and prisons Service
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247
8. CLASSIFICATION AND CHART OF ACCOUNTS
The Minister shall in consultation with the Accountant General issue the accounting policy
and chart of accounts to be used by the councils.
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