Lawmakers have raised concern over the skyrocketing domestic arrears being accumulated by health facilities, warning that delayed payment of suppliers will not only cripple the business community, but also impact on the economy.
The concern followed findings in consolidated report on the audit queries raised in the health sector that was presented before Parliament by Medard Sseggona (Busiro East), who also doubles as Chairperson Public Accounts Committee (PAC).
Sseggona informed Parliament that the initial findings by the Auditor General, John Muwanga established that the amount of arrears in Hospitals over time and the current budget allocation does not match, with managers of the hospitals blaming the accumulated arrears were mainly arising from inadequate funding for the entities as well as insufficient releases that escalated utility costs
“For instance, in Kiruddu Hospital Management reported a closing balance of payables balance of Shs458 Million, Kawempe hospital reported Shs932 Million, Jinja Shs1.5Bn while Entebbe Hospital reported Shs824 Million,” said Sseggona.
Parliament also revealed that in some instances, some health facilities didn’t include in their budgets provisions for the settlement of domestic arrears, yet these entities cannot run effectively without some of these services.
Sseggona while presenting the report said, “The Committee recommends that the Accounting Officers should, ensure adherence to the commitment control system to minimize accumulation of domestic arrears, budget for payment of domestic arrears and also come up with a debt settlement plan with the various creditors to and possible litigation and the associated costs.”
Speaker Anita Among while reacting to the Committee findings remarked, “The accumulation of domestic arrears largely is attributed to late budget releases. These arrears are very dangerous, why don’t you accumulate receivables? You are disadvantaging the people that supplied you, it is going to accrue interests and go as far as litigation. So, we need to make sure that we spend within what we have and if the institutions, then you release that money because it affects the economy and suppliers.”
Parliament also approved the Committee recommendation to have all Accounting Officers to be held responsible for creation of arrears, as well as holding Ministry of Finance to be held liable for failure to clear domestic arrears which pose a danger of insufficient and ineffective service delivery.
The development comes at the time Ministry of Finance, in the March 2023 Report on Public Debt, Grants, Guarantees and Other Liabilities for 2022/2023 revealed that the total stock of Central Government domestic arrears rose from Shs4.813.83Trn in FY2020/21 to Shs7.987Trn as per December 2022.
The breakdown of the verified domestic arrears of Central Government entities as at end June 2022 highlighted that most arrears are under Court Awards & compensations Shs3.109Trn and Shs2.139Trn respectively in the central government, while goods and services that remained unpaid stood at Shs946Bn.
The report further indicated that of the total domestic arrears, Ministries account for Shs2.320Trn, Agencies Shs5.646Trn, Referral Hospitals Shs15.20Bn, Missions Shs5.32Bn.
Despite the skyrocketing domestic arrears to a tune of Shs7.987Trn, Government has only is set aside Shs205.8Bn as payment of domestic arrears in 2023/2024 national budget.
