Muhakanizi warns accounting officers over loan deductions

Muhakanizi warns accounting officers over loan deductions
Mr. Keith Muhakanizi

Kampala, Uganda | URN | The Ministry of Finance, Planning and Economic Development is considering taking disciplinary action against accounting officers for alleged breach of guidelines on loan application by their respective civil servants.

Several civil servants apply for multiple loans from various banks and other money lenders to cater for the daily demands.

However, complaints have emerged that the multiple loans go above 50% threshold contrary to Public service guidelines.

Keith Muhakanizi the Permanent Secretary of the Ministry of Finance, Planning and Economic Development says as result some staff go off the payroll leading to accumulation of arrears thus affecting the credibility of the budget.

In his letter to all accounting officers in Central and Local governments dated 5th November this year, Muhakanizi has directed them to ensure that no public officer’s loan deductions exceed 50% of their gross pay.

Muhakanizi warns that any accounting officer who approves staff loans beyond the 50% of the gross pay and cause staff to go off the payroll will be held personally and pecuniary accountable.

The letter is copied to Auditor General and Accountant General.

In Luweero, Godfrey Kuruhiira the District Chief Administrative Officer has forwarded the letter to all staff to take note.

He was unavailable for further comment on Thursday 5th but Doctor Jeremiah Ssendege the Chairperson of Luweero Head teachers’ Association confirmed receipt of his communication.

Ssendege explains that because of low pay many teachers resort to borrow from multiple sources to cater for skyrocketing demands.

Ssendege however says that they have since asked the head teachers to sensitise teachers to stop the practice to avoid going off the payroll.

Emmanuel Kizza the Chairperson of Uganda National Teachers Union, Nakaseke branch says some loans are acquired without approval from accounting officers something that may affect implementation of the directive.

Kizza says that many public officers acquire loans from money lenders who don’t need approval from CAO but evidence that you are government employee.

He however condemned staff who seeks multiple loans saying this affect output since they are left with nothing for survival.

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He also asked fellow head teachers to take note of the communication because the CAOs may come for them if such staff go off the payroll over multiple loans.

In 2014, the government had stopped guaranteeing its civil servants applying for loans and asked them to deal directly with banking institutions.

It also withdrawn loan codes from its payroll after reports emerged that loan deductions were above agreed amounts but this was revised and accounting officers now guarantee all loan applications.

In 2010, the Ministry of Public Service hired Payment Solutions Uganda Limited to control and ensure that loan deductions don’t go above the threshold so that the staff have basic pay at end of the month.