The Finance ministry is facing a parliamentary inquiry after it borrowed Shs 675bn locally to finance the war in South Sudan.

Speaker Rebecca Kadaga has already met the House committee on the National Economy, headed by Ibanda North MP Xavier Kyooma, which is compiling its probe report. The committee largely investigated the procedure used by Finance to acquire the domestic loan of Shs 675bn.

Key to the investigation was the motion tabled in Parliament by State Finance Minister Matia Kasaija in June, seeking approval to borrow domestically to finance the war. But the MPs opposed this motion, arguing that it would be a "retrospective approval", since the loan had been already obtained, and utilized.

"In the course of executing the budget for FY 2013/2014, the government has been faced with emergencies arising out of the political situation in South Sudan," the minister told Parliament. "Accordingly, in order to execute the budget as planned, we borrowed Shs 675bn from the domestic market."

Meeting with MPs on the committee on the National Economy, Speaker Kadaga reportedly said it was not within Parliament's mandate to approve government loans retrospectively.

A source who attended the closed-door meeting on July 3 quoted Kadaga as saying: "It's not our role to amend motions which have been presented to Parliament by the executive; it's the mandate of the executive to present motions to Parliament in the right manner."

According to a member of the committee, government concealed information regarding its creditors. The MPs also took issue with the fact that government didn't furnish them with a breakdown of how much was spent on each item.

"The ministry of Finance says it borrowed the money to address the issue of insecurity in South Sudan through facilitating the UPDF troops there and pay the salaries of all public servants," a committee member said. "What perturbs us is that government lied to Parliament that the government of South Sudan was going to finance the war on its land; but to our dismay, we have found out that it's actually Uganda which is financing the war."

The MP further complained that Finance had not even indicated properly when they borrowed the money or how they spent it.

"They argue that the money was domestically borrowed, but they didn't indicate who lent them the money," the MP said.

Based on these findings, the MPs have resolved to report to Parliament that government's loan request without prior MPs' approval was out of procedure.

"We are going to come up with a report indicating that what the ministry of Finance is doing is not proper, and that since the monies have been spent, the matter should be referred to the Public Accounts committee for the necessary investigations," the MP said.

War broke out in South Sudan last December, pitting President Salva Kiir against forces loyal to his former deputy Riek Machar. The UPDF is fighting alongside SPLA troops loyal to Kiir.