The law under Section 17(2) of PFMA provides that, "a vote that does not expend money that was appropriated to the vote for the financial year shall, at the close of the financial year, repay the money to the Consolidated Fund."
Usually around this time, many government agencies and ministries are involved in the last minute commitments and signing of contracts to reduce the amount of unutilised funds because "every appropriation by Parliament shall expire and cease to have any effect at the close of the financial year for which it is made," reads 17(1) of PFMA.
Once in the Consolidated Fund, the money forms part of the government's cash resources directed to funding programs and activities in a new financial year.
Meanwhile, for local governments, those that fail to utilise at least 60 per cent of their unconditional or equalisation grants within a financial year are given up to July 31 "of the following year to explain in writing to the minister, the reason for failure to utilise the grants."
Mr Mugunga emphasised that under the existing legal framework, all spending agencies are supposed to meet their spending targets for both wages and capital investments before the end of the financial year, lest they lose all their unspent balances.
