The Inter-Governmental Fiscal Transfer Reform Programme was designed in 2017 and has been updated over the years. The IGFTR Reform Program is aligned with the Third National Development Plan (NDP-III) 2020/21 to 2024/25, contributing to the Public Sector Transformation Development Program and its objective to “deepen decentralization and citizen participation in local development”.

The IGFT RP (2021) is focused on four main objectives outlined below and described in detail in subsection 4.2:

  1. Improve the adequacy, equity and increase discretion in the financing of local service delivery;
  2. Improve Central Government performance in the oversight, management, and delivery of LG services;
  3. Improve LG performance in the management of local service delivery;
  4. Improve the effectiveness and efficiency of service delivery by frontline providers
Objectives of the Inter-Governmental Fiscal Transfers Reform Program

Adequacy, equity, and discretion in the financing of local service delivery

Restoration of the adequacy, improvement in the equity, and increase in the discretion in the financing of local service delivery will be done in the context of the consolidated grant framework developed under the previous iteration of this reform as outlined below.


Table 2: Overview of the Consolidated Grant Framework




Sector Conditional Grants









Production & Marketing




Water & Environment




Works & Transport




Trade & Industry




Social Development




Discretionary Grants

Unconditional Grant




Discretionary Dev’t Equalisation




Ad Hoc Grants




Support Services




Transitional Development




Restoring adequacy


To restore adequacy of the financing of Local Governments, the Government of Uganda has developed a Medium-Term Expenditure Framework6 (MTEF) to gradually uplift the value of the transfers in the areas deemed as the most critical for the improvement of local service delivery. Implementation began from FY 2017/18 and has been updated this year. This plan is intended to guide annual increases to LGs’ Wage, Non-Wage Recurrent and Development transfers until FY 2023/24.


The first aim of the MTEF is to increase the adequacy of the financing of conditional grants for essential service delivery under the remit of Local Governments (e.g. education, health, water/environment, agriculture conditional grants). Furthermore, the allocations included in the MTEF aim to restore the adequacy of financing of essential services in the twelve refugee-hosting LGs which has deteriorated considerably as a result of the considerable inflow of refugees to these areas in recent years.


The MTEF also aims to restore the adequacy and equity of discretionary financing of Local Government for investment and service delivery. Therefore, it incorporates a plan to uplift allocations to the Discretionary Development Equalization Grant (DDEG) to fund improvements in local infrastructure and incentivize improved LG institutional performance including the management of investments and service delivery.






A detailed description of the MTEF including actual and projected allocations to LG grants between FY 2017/18 and 2023/24 is given in the Annex to this document. These allocations reflect commitments made under the approved budget of FY 2021/22 and are to a large extent aligned with the costing of LG mandates initiated in the Fiscal Decentralization Architecture Study.


Below follows a description of the main goals the reform expects to achieve with the improved

adequacy of conditional and discretionary grants:


  1. Conditional grants:


  1. Wage: additional funds will be provided for staffing service delivery facilities in particular in the most understaffed LGs and This will include, inter alia, financing for approximately 10,000 primary and 8,000 secondary school teachers, additional inspectors to meet a target of 1 inspector to 40 schools (i.e. approximately 600 new inspectors) and approximately 7,000 health workers for the most understaffed areas. Vacancies at key positions at LG level will also be filled (e.g. Water and Environment sector). Finally, these funds will also cater for the integration in the LG payroll of primary education and health workers providing services to refugee populations in facilities run by development partners.7


  1. NWR:


i.) In the education sector, the capitation grants for primary and secondary schools will be increased to enable schools to provide instructional materials and ensure proper maintenance and management of facilities. Allocations for inspection and monitoring of schools will also be uplifted to enable a better oversight by LGs.


ii.)   In the health sector, Result Based Financing will be mainstreamed    into non-wage recurrent grants to uplift available funds while creating Fiscal incentives for improved service delivery. Funding for essential medicines will be increased and the current (non-devolved) allocations will be improved and made more transparent.


iii.) In the water and environment sector, the grant will be increased to enable better management of water and sanitation as well as environmental management functions.


iv.) An agreed number of primary schools and health facilities run by Development Partners in refugee-hosting districts will be transitioned to LGs and receive non-wage recurrent funding in line with other government facilities.8




  1. Development


i.) Education: completion of construction and equipping at least 259 seed secondary schools (while ensuring the appropriate staffing and recurrent funding referred above) and increase formula-based allocations for rehabilitation, expansion and equipping existing primary and secondary schools to make them functional.


ii.) Health: completion of upgrading and equipping 331 facilities to health center III level and increase formula-based allocations for rehabilitation, expansion and equipping existing health facilities to make them functional.


iii.) Water & Environment: reduce the number of sub-counties with safe water coverage below national targets, increase the functionality of existing water supply sources, and improve sanitation and hygiene practices.


iv.) Agriculture (Production & Marketing): increase the resources available to support smallholder farmers to move from mostly subsistence to more commercial agriculture by improving their access to micro-scale irrigation technology.


v.) Refugee Hosting LGs: these LGs will receive additional development funds for the education, health and water & environment sectors to assist them to cope with the additional pressure on service delivery resulting from the needs of refugee populations residing in these areas.


  1. Discretionary Grants


  1. Unconditional Grant (UCG) – at the moment there are no specific plans for increasing the size of the unconditional grants despite widespread concerns regarding the adequacy of funding for a narrow range of mandatory administrative The Government will review in detail the adequacy of the UCG and establish prioritized and affordable ways for financing the UCG more adequately.


  1. Discretionary Development Equalization Grant (DDEG) – allocations to two of the four sub-windows of this grant remain inadequate to meet the needs of the respective LGs (i.e. LRDP and LGG, see section 2.1.2). The Government will develop a DDEG Medium Term Plan to identify options to increase the adequacy of this grant within the existing fiscal constraints.


Increase Equity of LG grants

Efficient use of public resources also requires an equitable distribution of funds across local governments. GoU will ensure that non-wage recurrent and development grants are allocated based on objective, transparent and equitable allocation formulae. In a consultative process involving all stakeholders, the Government has developed principles to guide the development of allocation formulae which are annually agreed upon between the LGs and central government. These negotiations are in line with the constitutional provision and are organized by the LG Finance Commission.


Conditional and discretionary grants will be structured as described below to improve the

equity of allocations across LG while incentivizing improved performance:


  1. Conditional grants:


  1. Wage
    • Equity across LGs: Government will also address the marked disparities across LGs in terms of the availability of critical staff. This will be achieved by prioritizing additional wage allocations to the least staffed LGs to enable them to fill key sectoral This prioritization will be based on an in-depth analysis of the number of vacant positions in key sectors at the local level.


  • Equity within LGs: equitable deployment of staff across facilities

(schools and health units) as well as across Lower Local Governments


  1. Non-Wage Recurrent
  • LG operations: Grants for NWR to LGs shall be based on objective needs-

based formulae.

  • Service delivery level funding: Grant transfers to schools, health facilities and LLGs shall be allocated based on objective formulae with two elements:


  • Basic Component- determined by a formula that considers need- based indicators;


  • Performance Component whereby those facilities with better performance are allocated additional funds relative to the others, thus incentivizing most value for
  • Development
  • Education and Health Infrastructure Gaps at LLG Level (special window): Sector development funding for education and health will include funding for pre-selected priority secondary schools and health center II upgrades in sub-counties that do not dispose of these


  • Regular Window: Government will also pursue a formula-based approach to achieve equity in grant allocations with two components in each of the sectors thus:


  1. The basic component is determined by a formula that considers need-based



  1. Performance component whereby those LGs that perform better are

allocated additional funds incentivizing value for money.


  1. Discretionary Grants
  1. Unconditional Grant


  • Wage UGC: additional wage allocations will be prioritized for LGs with

lower staffing levels in critical positions.


  • Non-Wage Recurrent UCG: allocations for operational expenditures will continue to be determined by a formula that considers need-based indicators.


  1. Discretionary Development Equalization Grant (DDEG): the DDEG grant aims to improve the adequacy of discretionary LG funding, and distribute resources more equitably across and within LGs. This grant has two broad parts: District and Urban which are further subdivided into seven and five windows respectively supporting different subsets of LGs as follows9:


i.) The District DDEG has 7 windows for (i) PRDP District Development (allocated to PRDP III Districts only); (ii) PRDP Sub-County Development (allocated to PRDP III Sub-Counties only); (iii) LRDP District Development (allocated to LRDP Districts only); (iv) LRDP Sub-County Development (allocated to LRDP Sub-Counties only); (v) LG Grant -Districts Development (allocated to the remaining Districts only); (vi) LG Grant Sub-County Development (allocated to the remaining Sub-Counties only); and (vii) Refugee Hosting District Development (allocated to the refugee hosting LGs benefitting from USMID).


ii.) Similarly, the Urban DDEG has 5 windows: (i) Municipal USMID (allocated to USMID Municipalities only); (ii) Division – USMID (allocated to USMID Municipalities only); (iii) Municipal – Non-USMID (allocated to the remaining Municipalities only); (iv) Division – Non-USMID; and (v) Town Councils (allocated to Town Councils only)


iii.) Equity within windows: equity within each of the windows listed above will continue to be ensured through the basic and performance-based components structured as follows:


  1. Basic Component determined by a formula which considers need-based indicators (including a small conflict-related criterion);


  1. Performance-based component allocating additional funds to LGs with better performance in the annual performance assessments, incentivizing improved performance and value for


iv.) Equity across windows: DDEG allocations are highly inequitable across its windows. Allocations remain insufficient for most LGs, in particular non-USMID urban and rural LGs that are not supported under PRDP/ LDRP. As mentioned in the previous section, Government will develop a costed plan to increase allocations to the LGG and LRDP windows to reduce these inequities. This plan will include i) analysis of current and projected DDEG funding across windows, ii) existing inequities across LGs, iii) relative expenditure needs of LGs, and iv) proposals for how to address this in a fiscally responsible manner.


Increased Discretion of LG grants

A core objective of decentralization is to transfer decision-making powers and resource allocation from central government to locally accountable bodies to ensure that plans and budgets reflect local needs and priorities. Overly centralized budgeting and resource allocation processes will result in inefficiencies and undermine local democracy.


The level of spending discretion has diminished significantly over the last two decades in Uganda since i) own source revenues decreased substantially, ii) the bulk of the unconditional grant is absorbed by LG staff salaries, iii) non-wage recurrent grants are de facto tied to compulsory administrative expenses, and iv) discretionary development funding (DDEG) remains insufficient for the majority of Local Governments.


As such, Government intends to improve the balance between earmarked (conditional) and discretionary transfers for both development and recurrent funding. Therefore, GoU intends to increase discretion over allocation decisions under the IGFTRP through the following interventions:


  1. Conditional grants


  1. NWR: Reduce overly restrictive guidelines to the allocation of non-wage recurrent conditional Performance-based grants to facilities and schools will be mainstreamed under the Intergovernmental Fiscal Transfer System providing a high level of flexibility to service providers over the allocation of these funds.


  1. Development: Reduce, overly restrictive guidelines to the allocation of development conditional The share of development conditional grants not earmarked for specific projects will increase substantially throughout the Reform’s MTEF in key sectors (e.g. from 21 to 100 percent in the health sector over FY 2019/20-2023/24).


  1. Discretionary Grants


  1. Unconditional Grant – once the overall adequacy of the grant has increased it will be possible to ease the de-facto earmarking of


  1. Discretional Development Equalization Grant: The latest DDEG guidelines have reduced hitherto substantial earmarking of DDEG DDEG is now a highly discretionary grant that LGs can use for development purposes within their legal mandate. The improved adequacy of this grant discussed above will also be crucial to increase the discretion of LG financing.


Improve Central Government performance


The improvement of local service delivery depends, to a large extent, on the effectiveness of the oversight and technical support provided by the Central Government and the systems and processes that underpin it. Central MDAs have a mixed performance in the support provided to LGs, namely in the management and implementation of infrastructure projects and environmental safeguards. The Central Government MDAs will be required to:


i.) Develop, issue, disseminate and ensure compliance to essential guidelines to LGs; to do so, each of the sector MDAs will be required to develop and/or update, issue and ensure compliance to guidelines;


  1. Sector-specific guidelines for improving service delivery;
  2. Grant and Budgeting Guidelines;
  3. Ministry of Water and Environment (MWE) and National Environment Management Authority (NEMA) shall strengthen and issue tools for environmental and social screening as well as monitoring implementation of requirements and grievance redress, in consultation with other Ministries, Departments and


ii.)     MDAs will also be required to:

  1. Disseminate and train the LGs on the guidelines;
  2. Provide backstopping support to LGs while disseminating and training

service delivery units on the guidelines.


iii.)    Assess the performance of LGs and offer performance improvement support:

  1. Ensure that performance assessment of LGs and service delivery units is conducted in line with Assessment Manual(s); and
  2. Performance Improvement Planning and Support Takes Place in line with LGPIP



iv.)     Conduct routine Coordination, Oversight, Monitoring and Technical support:


  1. The Central Government will review LG budgets, work plans and reports to ensure compliance with the guidelines;
  2. Provide monitoring, oversight and technical support to service delivery;
  3. Oversight and management of facilities construction and maintenance;
  4. Routine monitoring by the sectors;
  5. Joint quarterly monitoring;
  6. Technical infrastructure audits will be conducted on yearly basis;
  7. VFM service delivery audits will start being conducted every second year starting in FY 2020/21;
  8. Oversight and technical support for compliance with contract management, environmental, social, health and safety safeguards.


v.) Take action to improve local government systems and processes used in managing and delivering investments and services


  • Actions to strengthen cross-cutting systems for:
    1. human resource management;
    2. public investment management;
    3. budgeting and budget reporting linked to service delivery;
    4. environmental and social safeguards management;


  • Actions to strengthen sector-specific processes and systems including:
    1. service delivery standards, processes and systems;
    2. Sector human resource management;
    3. Sector planning, budgeting and reporting;
    4. Sector public investment selection and implementation;
    5. Sector Monitoring and Evaluation and Management Information Systems;
    6. Automation of systems and


The performance of Central MDAs in implementing these activities will be assessed on an annual basis from FY 2020/21 onwards through a new component of Performance Assessment. Central ministries will report on progress in the performance of core functions in line with their calendar and provide supporting evidence in line with the performance assessment manual. A matrix of actions to strengthen service delivery systems and processes and responsible agencies will report on the implementation of those actions. The performance assessment will assess the degree to which the four key oversight functions have been carried out.


Improve LG performance in the management of local service delivery


The improvement of LG management of service delivery and achievement of expected outputs and outcomes requires that LGs perform several roles including i) reporting and performance improvement; ii) human resources management and development; iii) management, monitoring and supervision of services; iv) investment management; v) environmental and social requirements, and vi) public financial management.


The performance of the functions described above will be assessed, incentivized and supported through two key interventions:


i.) Local Government Performance Assessment:

The overall objective of the LG Performance Assessment System (LGPAS) is to promote effective behaviour, systems and procedures of importance for efficient LG administration and local service delivery. The LGPA which has been conducted since FY 2017/18 has been re-designed to better incentivize the good performance of LGs. Like in the previous assessment, LGPA results will be linked to development grant allocations in five sectors starting in FY 2020/21 (i.e. education, health, water and environment, micro-scale irrigation and DDEG); The local government assessment will be formed by two key components

  1. Sectoral assessments will evaluate service delivery in the district/municipalities as whole, aggregating performance information from facilities and lower local governments and assess compliance with performance reporting and improvement support. This will provide incentives for local governments to focus on performance at the point of delivery; and


  1. Minimum conditions for accessing the performance component of development grants will be identified, to focus on key bottlenecks for delivery and safeguards management. The impact of poor performance on development grant allocations will incentivize better performance at this


ii.) Local Government Performance Improvement: Performance Improvement Plans (PIPs) will continue to be developed and implemented for: (i) thematic areas performed poorly by all LGs across the country; and (ii) amongst the worst performing LGs.


Improve the Effectiveness and Efficiency of service delivery


Improved performance at the service delivery unit level will be achieved through two core



i.) Facility and lower local government level performance assessment: to incentivize the service delivery units to effectively and efficiently deliver services, a facility service delivery assessment will be designed and implemented. This level of assessment will incentivize the provision of service delivery results and processes by linking the size of operational transfers to service delivery units to their performance;


  1. The performance of Health Centre IIIs, IVs and General Hospitals will be assessed as part of the mainstreaming of Results-Based Financing in the LG grant system from 2022/23;
  2. Primary School performance will be assessed using a new performance assessment framework that will be rolled out in a phased manner throughout the reform;
  3. A lower local government assessment will also be phased in during the implementation of the reform program. This will assess the performance of lower local governments in water supply, sanitation and hygiene; micro- irrigation and complementary services; and their roles in education, health and cross-cutting


ii.) Facility and lower local government level performance improvement: under the IGFTRP (2021), performance improvement plans will extend to service delivery units to ensure they receive the necessary support to achieve value for money.


Performance Assessment and Improvement Framework for Service Delivery


As noted above, improved management and delivery of services will be incentivised through a harmonised assessment framework coordinated by the Office of the Prime Minister as depicted in the table below:


Table 3: Performance Assessment and Improvement Framework




Level 1 – Service Delivery Facility and LLG Performance


Level 2 LG Management of Service Delivery

Level 3 CG Management of Service Delivery


1a) Schools

1b) Health

1c) LLGs

2a MCs

2b: PMs

Education, Health, Water & Environment, Micro-scale Irrigation and Crosscutting MDAs



Incentivize improvements in processes and outputs at the school level

Incentivize improvements in processes and delivery of health services

Incentivize improvements in LLG management & service delivery

Address core blockages

to service delivery

Incentivize improvements in the LG management of Education, Health,

Water & Environment; Irrigation and Crosscutting issues

Incentivize improvement in Central Government Management of Service Delivery

2. Timing



Oct – Dec

Oct – Dec

Oct – Dec

Oct – Dec

3. Assessment Method and compilation of results

Use school inspection reports


District / Municipal

Contracted private firm by OPM

Contracted private firm by OPM

MDAs reporting against

4. Quality Assurance and verification of results


firm by OPM


firm by OPM

Contracted firm by OPM – sample a few LLG


firm by OPM

Spot checks & Contracted firm by OPM

Contracted firm by


5. Impact/use

Allocation of part of the capitation grants: performance improvement support

Allocation of part of the NWR grants; performance improvement support

Allocation part of the DDEG; performance improvement support

Determine access to the formula or performance- based component of the development grant

Allocation part of the development grant; performance improvement support






The IGFTRP will be implemented through and by GoU existing structures and no parallel implementation and oversight structures will be created. The figure below outlines the oversight structures as well as implementation arrangements specifying the lead department for each of the core functions of the reform.


Figure 6: IGFTRs – Oversight and Implementation Structures


  • IGFTR Oversight Structures


The oversight structures will be: (i) IGFTR Oversight Committee (ii) the IGFTR Steering Committee; and (iii) the Fiscal Decentralization Technical Committee.


i.) The IGFTR Oversight Committee will be chaired by the Minister of Finance, Planning and Economic Development. The members will be Ministers of: Education and Sports; Health; Water and Environment; Agriculture, Animal Industries and Fisheries, Local Government, General Duties (OPM), Public Service, Works and Transport, Lands, Housing and Urban Development, Gender, Labour and Social Development, and Chairperson Local Government Finance Commission. Other Ministers will be co-opted depending on the issue being discussed. Development Partners supporting IGFTRs will be ex-officials. The Permanent Secretary/Secretary to the Treasury will be the Secretary. The IGFTR Oversight Committee will be responsible for providing policy guidance to the design and implementation of all aspects of Intergovernmental Fiscal Transfer Reforms.


ii.)    The IGFTR Steering Committee will be chaired by the Permanent Secretary/Secretary

to the Treasury. The members will be Permanent Secretaries of MoH, MoES, MoWE,


MAAIF, OPM, MoLG, MoPS, MoLHUD, MoWT, MoGLSD, Executive Directors of PPDA and NEMA and Secretary LGFC. Other Permanent Secretaries will be co-opted depending on the issue being discussed. Development Partners supporting IGFTRs will be ex- officials. The Director Budget, MoFPED will be the Secretary. The FD Steering Committee will be responsible for providing strategic direction to the design and implementation of all aspects of the Intergovernmental Fiscal Transfer Reforms including but not limited to: (i) final approval of the LG Performance Assessment Manual and Annual LG Performance Assessment Results; (ii) final approval of the grant allocation formulae;

(iii) providing oversight and ensure the achievement of results envisioned in the reform program; and (iv) any other function that requires strategic guidance related to the implementation of the IGFTRs.


iii.) The IGFTR Technical Committee: The TC will be chaired by the Director Budget, MoFPED and co-chaired by: (i) Director Research and Revenue, LGFC; and (ii) Director, M&E, OPM10. It will be composed of representatives with members who handle transfers at a senior (Commissioner) level from: MoFPED (BPED, ISSD); MoLG; LGFC; OPM, MoWE, MAAIF, MoLHUD, MoWT, MoGLSD, PPDA and NEMA. Representatives from LGs (UAAU, ULGA etc.) DPs supporting IGFTRS and BTI Partners will be ex-officials. The Secretary will be Commissioner BPED, MoFPED. The IGFTR TC is responsible for overseeing and coordinating, at a technical level, the grants, assessment and targeted technical support including but not limited to: (i) the implementation of the grant allocation formulae to ensure equitable allocation of funds across LGs; (ii) the releases to LGs, ensuring timeliness; (iii) technical review and verification of the LG performance assessment manuals as well as results and ensure applications of the results during the allocation of grants; (iv) handle grievances related to LG transfers and results of the LG performance assessment; (v) offer technical guidance on the provision of targeted support to the weak LGs to ensure that the identified gaps are addressed; (vi) coordinate joint monitoring of the implementation of reforms at the LG level; (vii) offer technical guidance on the design and implementation of the budget transparency initiative; (vii) compile, monitor and troubleshoot the achievement of all results envisioned in the reform program; and (viii) coordinate joint annual reporting and review of the Intergovernmental Fiscal Transfer Reforms.


  • IGFTR Implementation Structures


The implementation arrangements will also involve the mandated departments coordinating with the relevant stakeholders to ensure that the core functions regarding the reforms are implemented:


i.) The LG Grant Management function will be coordinated by the Fiscal Decentralization Section, Budget Policy and Evaluation Department, MoFPED. The Commissioner, Budget Policy and Evaluation Department will ensure the participation of: (i) Officers in the Fiscal Decentralization Section; (ii) the respective Sectoral Desk Officers; and (iii) Officers from the Accountant General’s Office responsible for making releases to LGs. The function will involve coordinating the reform as well as the LG budget formulation and execution functions. The specific tasks include: (i) coordinating consultations with LGs to inform the development of the respective grant guidelines – through the LG Budget Workshops; (ii) coordinating the application of the grants allocation formulae


  • Co-chairing will depend on the issue being discussed: (i) when discussing the size and allocation of grants, the co-chair will be the Director Research and Revenue, LGFC; and (ii) when discussing the LG performance assessment, the co-chair will be the Director, M&E


approved by the sector and generating IPFs; (iii) coordinating the release of transfers to LGs; (iv) coordinating LG budget reporting; (v) coordinating the implementation of quarterly joint monitoring visits to LGs covering safeguards, contract management and procurement; and (vi) ensuring achievement and reporting on the results envisioned in the Reform Program relating to the adequacy and equity of LG transfers.


ii.) The Budget Transparency function will be coordinated by the Budget Evaluation Section, Budget Policy and Evaluation Department, MoFPED. The Commissioner, Budget Policy and Evaluation Department will ensure the participation of Officers in the Budget Evaluation Section; Officers from FDS, the respective Sectoral Desk Officers and BMAU. The function will involve publicizing budget information. The specific tasks include (i) overseeing the development, management and popularizing of the tools that are used to publicize budget information e.g. the budget website and call centre;

(ii) ensuring that budget information that is comprehensive and accurate is provided on time e.g. to the budget website, newspapers, others; (iii) coordinating the process of receiving feedback on the publicized budget information and service delivery in general; and (iv) coordinating the process of responding to feedback.


iii.) The function of providing advice on improving LG financing will be coordinated by the Directorate of Research and Revenue, LGFC. The Director, Research and Revenue, LGFC will ensure the participation of: Officers in the Directorate of Research and Revenue, LGFC; Officers from MoLG, MoFPED and sectors making transfers to LGs. Performing the function will involve: (i) coordinating the annual negotiations between Ministries, Departments and Agencies on one hand and LGs on the other regarding transfers to LGs (size, formulas, modalities, systems and procedures etc.); (ii) conducting studies and providing advice on LG finance, especially on how to improve grants, own source revenues and other sources of LG financing; and (iii) verifying the achievement and report to the technical committee on the results envisioned in the Reform Program relating to the adequacy and equity of LG transfers.


iv.) Performance Assessment function will be coordinated by the M&E Department, OPM. The Commissioner M&E, Office of Prime Minister will ensure the participation of representatives from OPM, MoLG, LGFC, MoFPED, MAAIF, MoPS, MoES, MoH, MoWE, ULGA and UAAU. Representatives from other MDAs will also be co-opted depending on the subject discussed. Performing the function will involve coordinating the design and implementation of the performance assessment system for MDAs, Local Governments and Service Delivery Units. The key tasks include: (i) coordinating the formulation (and refinement) of the Performance Assessment Manuals; (ii) procuring and managing the firms contracted to conduct the LG performance assessment exercises and the quality assurance team; (iii) coordinating the orientation and training of LGs and teams contracted to conduct the LG performance assessment exercises;

(iv) validating the results of the LG PA and presenting to the Technical Committee with a clear recommendation on the impact of the results to the allocation of grants, the poorly performing LGs that require support, and common thematic areas of underperformance requiring support; (v) coordinating the dissemination and use of the LG performance assessment results including presentation to GAPR; and (vi) ensuring achievement and reporting on the results relating to LG assessment and performance as envisioned in the Reform Program.


v.) LG Performance Improvement function will be coordinated by the District Administration Department, MoLG. The Commissioner, District Administration, MoLG will ensure the participation of representatives from MoLG (Urban Administration, District Inspection; Urban Inspection and Local Council Development); Office of the Prime Minister; LG Finance Commission; ministries of Finance, Planning and Economic Development; Public Service; Education and Sports; Health; Agriculture, Animal Industries and Fisheries; Water and Environment; Lands, Housing and Urban Development as well as ULGA and UAAU. Representatives from other MDAs will be co- opted depending on the subject being discussed. The function will involve coordinating and managing the multi-sectoral National Resource Pool supporting the preparation of Performance Improvement Plans, dissemination of guidelines and other core activities to LGs. This will involve: (i) developing the framework, principles and modalities for providing targeted performance improvement support to LGs; (ii) determining the most appropriate institutions to provide the support and method of support (based on the recommendations of the LG PA results); (iii) coordinating the development of training materials tailored to addressing the identified gaps; (iv) coordinating the provision of technical advice, supervision and training by the respective sectors according to their mandates; (v) maintaining an up-to-date inventory, co-ordinate and ensure harmonisation of government and externally-funded capacity building initiatives directed towards LGs; and (vi) ensuring achievement and reporting on the results (relating to planning and effectiveness of targeted technical support as envisioned in the reform program.


vi.) Joint Monitoring Function: Monitoring the construction and maintenance of facilities function will be coordinated by the Fiscal Decentralization Section, Budget Policy and Evaluation Department, MoFPED. The Commissioner, Budget Policy and Evaluation Department will: (i) ensure that the respective sector ministries conduct monthly routine monitoring of construction and maintenance of facilities; (ii) coordinate the joint quarterly monitoring of construction and maintenance of facilities; (iii) ensure that Ministry of Works and Transport organizes spot checks on key issues identified from the routine and joint monitoring exercises; and (iv) Office of the Auditor General conducts annual technical infrastructure audits as well as VFM service delivery audits every second year starting in FY 2020/21.


vii.) Sector grant management function will be coordinated by the Policy and Planning department of the respective MDA making transfers to LGs. The Commissioner Policy and Planning of the respective MDA will ensure the participation of Officers from Policy and Planning; the relevant departments in the MDA (e.g. Officers from Primary Education; Secondary Education; Directorate of Education Standards; and BTVET in the Education sector); as well as sector Desk Officers from MoFPED, MoPS and MoLG. The tasks will include: (i) developing sector policies and strategies that govern local service delivery;

(ii) developing and issuing grant guidelines including associated formulae, budget requirements and medium-term grant allocations within sector ceilings; (iii) provision of data for formulae variables not available from UBOS (e.g. enrolment); (iv) follow up on assessment of the LG draft BFP Papers and draft budgets compliance with the budgeting requirements; (v) verification/accreditation of cost centre data submitted by LGs and used in the IFMS/PBS; (vi) participate in LG Performance Improvement exercises and support to the LG Performance Assessment System, and (vii) develop/ refine LG performance assessment parameters in the sector.