New budgeting system for councils
GOVERNMENT has introduced a new budgeting system for local authorities, with councils now expected to present programme-based budgets, which do not give room to hidden costs and allow residents to track council expenditure.
In an interview on the sidelines of the Local Government Investment Forum, Ministry of Local Government, Public Works and National Housing principal director for urban and local authorities, Ms Erica Jones said the old system gave councils room to hide some costs in the budget and in financial statements.
“The system that we have been using in Government of budgeting has not been user-friendly. It complicated the process because things were mixed together. We are introducing the segregated budgeting this financial year,” she said.
“We have had some help from World Bank and the process is being set up. This makes the budget more readable to both council and the public because the public does not know what happens in councils.
“They become disillusioned and make accusations against the council which have no basis, but based on their thoughts.”
She said Government was trying to make the budgeting process more transparent and more accountable.
Ms Jones said the reporting system back to the council will also become more transparent since it is divided into programmes. “It is also known as programmes based budgeting. What you do is you identify your core programmes. If you are doing well in collecting water revenue and you want to move the water money to another service it is actually visible.”
“Right now because everything is mashed up together you cannot tell the difference and it also helps you to track things like your employment costs. I am sure you have heard that there is a lot of debate regarding employment costs,” she said.
Ms Jones said the Government set up a broad framework of the 30:70 ratio in favour of service delivery but it does not apply across all the sectors.
“Let us take for example health. If you have a nurse you have 80 percent of your health services there you only need to buy drugs and other few things.
“It would not be right to say 30:70 in things like health you will be allowed to extend beyond.”
She said 30:70 will become the global figure but each account will be for specific issues.