Mr. Natanbanga, a department manager of the community-based distribution programs of the National Family Planning Board, drive into the petrol station to fill up the tank of the Board's Renault sedan before leaving to visit a pilot project some 100 kilometers away. After the attendant had filled up the tank, Mr. Natanbanga handed him a Board voucher to pay for the petrol. Mr. Natanbanga waited in the hot car for several minutes and was annoyed to see the attendant returning with the voucher still in his hand.
"I'm very sorry, sir," began the attendant, "but the manager says we cannot accept this voucher."
"What? Why not?" asked Mr. Natanbanga. "We've been doing business here for years, and I know we have an account with you. Let me speak to the manager."
Mr. Natanbanga followed the attendant into the station and became quite angry when the manager told him that he refused to accept the voucher because he had been advised by his head office that the Board had several overdue bills. Mr. Natanbanga was forced to use his per diem cash to pay for the petrol.
When Mr. Natanbanga returned to the office several days later, he had a meeting with Mr. Sylla, the finance manager, who had only been working with the National Family Planning Board for six months.
"Why has the petrol bill not been paid?" he demanded of Mr. Sylla. "Don't we have enough funds?"
"No, there haven't been any funds in the petrol budget for three months," responded Mr. Sylla.
"But that is impossible. I have only made two trips out to the pilot project this quarter and that certainly wouldn't have used all the money allocated for petrol," said Mr. Natanbanga. "What is the problem?"
"Well, sir, Mr. Ba, the head of the IEC department, has made numerous trips all over the region this quarter and he may have used a lot of the funds budgeted for petrol," replied Mr. Sylla.
"That is absurd and unfair. He can't spend all the money allocated for petrol. I need to visit my projects as well," said Mr. Natanbanga. "What kind of financial system do we have that can allow this to happen?"
"Well, sir, we don't actually have a separate budget for each department, so a department manager doesn't know how much he can spend," responded Mr. Sylla.
"We don't know when we are about to run out of funds?" asked Mr. Natanbanga.
"Not exactly,: said Mr. Sylla. "There is no system for keeping a running total of expenses incurred and so we never really know how much we've spent and how much is still available. What's more, because we get petrol on credit, we can even spend more than the overall budget and not know it until the supplier sends us a bill."
"This must cause problems all the time," said Mr. Natanbanga. "Can't we design a better system that would give each department some control and accountability for certain costs and expenses?"
"Since I came to work here, I have been thinking about a new system that should resolve this problem," said Mr. Sylla. "I've just finished designing a system that I think would solve many of the problems, and I would like to present it to all of the department managers. I propose two things. First, we need to have budgets for each department and each program manager must authorize every expense that is incurred. This will allow us to keep track of how much money is actually left in the budget for that department and for that type of expense. Secondly, since petrol is one of our biggest problems, I would suggest that we institute a system to issue prepaid vouchers to each department each month. There would also be no more buying on credit, and when a department had used all its vouchers for the month, it would not be able to get any additional vouchers until the following month. This would be a more equitable system for each department, and nobody will be able to overspend."
Mr. Natanbanga said, "That sounds like an excellent solution. There is a program managers' meeting scheduled for next week. Why don't you put yourself on the agenda to propose this new system?"
"We will also need to discuss how we are going to repay our debt to the petrol station," said Mr. Sylla. "At present, we don't have any money available to pay them."