This paper describes how the public education expenditure management system works in Uganda. It specifically identifies the formal roles of
institutions; the structure and flow of information generated by the public expenditure management system and applies them to the Education
Sector in Uganda. It shows the procedures for each stage in the expenditure and budget process, and indicates how on-going reform processes
are modifying the system. Efficient and effective public expenditure management is an essential precondition for government to be able to work
towards achieving good education outcomes. The purpose of this chapter is to see whether the public expenditure management system itself
could be improved to lead to a better and more effective use of public resources on education. The reform in the budgetary process placed
considerable pressure on the education sector and the district local government to improve operational skills in the areas of financial
management, planning, monitoring and implementation. UPE is therefore, faced with a number of challenges, which include lack of (technical)
capacity at the district level to cope with the new budgetary system; delays in release of funds that have constrained revenue utilization in the
districts. Poor rate of absorption (performance) of UPE funds have affected primary education outcomes in several ways. For example, fewer
classrooms that were targeted got built, and fewer teachers than targeted were recruited within planned period of time.