Uganda Adopts New IT Banking System to impose financial discipline on Government spending
The government's expenditure will be checked as Bank of Uganda(BoU) introduced a new banking system that is expected to bring financial discipline. This replaces the old system that was weak in addressing issues of financial discipline among government accountants. "The new system and processes will introduce new attitudes and behaviours in the way the governments has been making payments," said John Chemonges the Director of Banking at BoU while making the announcement of the new system last week.
The BoU Banking System (BBS) was launched on July 1 and has capabilities such as internet banking, online statements, no unauthorised overdrafts and two clearing sessions among others. However despite the technological advancement, what the system brings is efficiency and accountability among the government accountants who make payments for various ministries. "The risk of fraud on the government payments will reduce considerably with the new system," Chemonges adds.
Government payments will only be affected if there is money on their accounts. There will be no unauthorised overdrafts. For BoU to make any payments on behalf of the government it will first verify any payment before this payment is executed." According to Chemonges, since there is a new IT platform, it was automatic to identify whether the government had money on its account.
A notification would then be sent to the government department letting them know that their account balance cannot be used to make any payment. The system uses a set of grouped computers that are located at BoU which capture all the data and can automatically schedule payments and process online statements for the customers. Chemonges says that as long as money has been given to BoU to make payments then the computers will be able to detect this and make the payment.
The new system would also enable government be timely on delivering salaries and paying other providers since the central bank was now taking two days for clearances. "Payments can be scheduled on the system so that payment can be done timely. With two clearing sessions one in the morning and afternoon means that there is less bulk that will delay any payment," Chemonges adds.
The presence of internet banking on the system works with ease for the various ministries, departments and agencies, hospitals, districts, East African Development Bank, IMF, financial institutions and URA.
This means that anytime of the day these BoU customers can be access their accounts. The system is embedded with various security protocols and privileges so that account information can remain secure. Chemonges says there is a user passcode that changes every six seconds after the customer has logged in.