ARUA CITY’S UNSPENT FUNDS RETURNED TO NATIONAL TREASURY AS INVESTIGATIONS DELAY INFRASTRUCTURE PROJECTS

By Onzoma Albert
Arua City
Arua City Council returned unspent funds totaling over 3,700,569,464 billion shillings in the 2025/2026 financial year, to the consolidated fund. These funds included allocations linked to the Uganda Support to Municipal Infrastructure Development Additional Financing (USMID-AF) program.

The return resulted mainly from procurement delays and payment disputes, notably concerning the Go Down Road Project, where a prolonged payment disagreement arose between Arua City Council and contractor China Railway Seventh Group over outstanding dues for rehabilitation works.

Emmanuel Angudubo, the Deputy Assistant Town Clerk, explained issues that prompted the Ministry of Finance and Economic Development to channel the unused funds back to the consolidated fund.

“There are no much challenges in re-voting back the money to Arua city council especially when the reasons of returning back the money are clear, for example the 2 billion returned because we were written letter by the state house anti-corruption unit to halt payment process until when the investigation process are complete and once the investigation is concluded and the report is there, we will be able to attach that report which will help us to ensure that ministry of finance re-votes back the money to us as Arua City Council” he said.

The situation attracted attention from the State House Anti-Corruption Unit and the Inspector General of Government (IGG), who launched investigations into the management of municipal infrastructure funds and lighting projects

The unspent funds were initially allocated to various departments for implementation. For example, the Works and Engineering Department had 2,023,158,105 billion shillings under USMID-AF, but this amount was halted by the anti-corruption agencies pending investigations.

Additional funds, totaling approximately 324,864,000 million shillings, were under administration within the SUIDAC Project due to bureaucratic delays in approval processes for constructing classrooms at Onduparaka and Ociba Primary Schools.

These funds were meant to be approved by Cities Alliance but remained unutilized amid administrative hurdles.
Furthermore, about 660 million shillings intended for local revenue contributions for Ayivu and Arua Central Divisions could not be transferred efficiently because the local government had exhausted its transfer budget amid increased revenue collections, making supplementary requests impossible.

Angudubo, expressed hope that these funds would be re-appropriated and re-voted back to Arua City Council in the 2026/2027 fiscal year. “On 26th of June 2026 the chief financial officer of Arua City wrote to the ministry of finance particularly to the permanent secretary and the letter was received on 29th of June 2026 to ensure that the returned funds are re-voted back to us in this current financial year 2026/2027 so that we are to implement activities for which in the financial year they were not implemented” he added.

When local governments return unspent funds at the end of a financial year, the money is pooled into the central government’s general cash resources. It is then reprogrammed for national and local priorities through the parliamentary budgeting process.

To access these funds again, local governments must request permission from the Ministry of Finance, providing justification and updated work plans to demonstrate the continued need for the funds, which can then be re-released for ongoing projects.

Written by newsroom-radiopacis