The Ministry of Finance’s communication regarding the revision of allowances for public servants involved in monitoring donor-funded projects has caused a brouhaha, which the author of the letter attributes to a casual interpretation of the correspondence.
The letter, dated September 21, 2026, was written by the Deputy Secretary to the Treasury, Mr Patrick Ocailap, on behalf of his superior, the Permanent Secretary and Secretary to the Treasury. It is intended to rationalise allowances across donor-financed projects.
‘The basis of my communication was not escalating anything. If you read carefully, the letter does not impute anything,’ Mr Ocailap said.
He added that the communication should not be deliberately misunderstood or used inappropriately, saying the country was at a time when prudence and frugality were necessary.
‘We cannot be asking people to tighten their belts yet we are doubling expenses? The question is, do you read the letter properly? Because we are rationalising and not wasting,’ Mr Ocailap told Monitor when contacted on Tuesday.
When asked whether another circular would be issued to correct the impression that public servants’ allowances for monitoring and evaluation under donor-funded projects had been increased, he said it was not necessary because all it took was to read the letter carefully.
‘You need to read the communication very carefully,’ Mr Ocailap said in an interview with Monitor, adding: ‘That letter, if you read the first paragraph, it’s referring to a statute issued in February this year to all accounting officers, advising them on how to budget for this year.’
‘The communication talks about the programmes which were still under negotiation at that time, but have since been completed after the statute had been issued,’ he clarified, adding that ‘it needed guidance for application for this year and onwards, when dispatching staff for monitoring those projects.’
According to Mr Ocailap, the letter communicates the harmonisation of allowances between donor-financed programmes and government-funded programmes.
Follow the rules
‘So now, after all that, everything must follow the government-set rates, because the donor-funded [programmes] use set rates which are very high. So, we say, no, no, no, because it’s government money, whichever way it comes, the rates should apply like the letter guided. So, look at it as an equaliser rate,’ Mr Ocailap said.
Having harmonised the allowances, Mr Ocailap noted that there were conditions that had to be met, as outlined in the letter.
‘You must have funds within the budgets which are available for you this year to use,’ he explained, adding: ‘This means that for programmes to be implemented and personnel deployed, the funds must be explicitly budgeted.’
‘Furthermore, budgeting does not permit indiscriminate spending; expenditure must strictly adhere to quarterly cash limits. For example, if an institution has a budget of Shs13 million but the quarterly cash limit is capped at Shs10 million, plans must adjust to what is affordable, such as reducing five planned trips to two if fuel costs double,’ Mr Ocailap said.
Discipline
According to Mr Ocailap, the directive is a rationalisation measure intended to bring institutions that missed the initial planning circular into alignment with the government’s allowance policy.
Once aligned, they must fulfil two strict conditions: first, funds must be available in the budget, as spending without a budget is prohibited; second, even where a budget exists, expenditure on allowances must be restricted to the actual cash allocated for that quarter.
‘This is fundamental fiscal discipline that needs no further belabouring,’ Mr Ocailap said, ruling out the issuance of another circular to clarify what he described as a misconception regarding fieldwork allowances for donor-financed projects.
What the letter is about
Mr Ocailap’s letter explicitly directed implementers of donor-financed projects to apply the revised duty rates and facilitation allowances.
The updated structure covers political leaders, judges, public officers and local government leaders involved in monitoring development projects.
Although the letter highlights increases in official government rates for overnight stays and daytime official travel, Mr Ocailap noted that it was intended to rationalise allowances rather than increase them indiscriminately.
Under the categories for political leaders, specified officers and elected local government leaders, some rates have doubled.
However, Mr Ocailap argued that without the revision, the overall cost could have been much higher.
Under the revised rates, for example, the Vice-President will receive Shs500,000 per night when spending a night away from home to monitor a project, up from Shs210,000.
For a specified officer such as the Chief Justice, the rate has been increased by Shs285,000, while elected local government leaders will receive an additional Shs90,000 under the revised rates.
Policy and budget experts weigh in
When contacted, the executive director of the Civil Society Budget Advocacy Group (CSBAG), Mr Julius Mukunda, said he had a different interpretation of the circular.
‘My understanding is that this circular was emphasising the revisions that were made in 2018 when they doubled the allowances. Then the Ministry of Finance found out that certain projects have got rates that are not in tandem with the current rates of the circular. And as such, it is now harmonising the rates across the board,’ he said.
He added: ‘My only query is that whereas the government is telling us to tighten our belts, yet we are seeing increased rates, I would have rather seen a different circular revising these rates downwards, actually taking them back to the 2018 rates.’