CAG REPORT:Central Government for the year ended 30th June, 2009

ANNUAL GENERAL REPORT OF THE CONTROLLER AND

AUDITOR GENERAL

On the Audit of the Financial Statements of the Central Government for the year ended

30th June, 2009

THE UNITED REPUBLIC OF TANZANIA NATIONAL AUDIT OFFICE

Telegram: “Ukaguzi" Telephone: 255(022)2115157/8 Fax: 255(022)2117527 E-mail: [email protected] Website:www.nao.go.tz In reply please quote Ref.No.CA.4/37/01/2008/09

Office of the Controller and Auditor General Samora Avenue, P.O. Box 9080, DAR ES SALAAM. 26th March, 2010

Your Excellency Dr. Jakaya M. Kikwete, The President of the United Republic of Tanzania, State House, P.O. Box 9120, Dar es Salaam.

Re: Submission of Annual General Report of the Controller and Auditor General on the Financial Statements of the Central Government for the year ended June, 30th 2009

Pursuant to Article 143(4) of the Constitution of the United Republic of Tanzania of 1977 (revised 2005), and Sec.34 (1) (c) of the Public Audit Act No. 11 of 2008, I hereby submit to you the above mentioned report.

I submit.

Ludovick S. L. Utouh CONTROLLER AND AUDITOR GENERAL

Office of the Controller and Auditor General Central Government General Report 2008/09

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Office of the Controller and Auditor General,

The National Audit Office, United Republic of Tanzania. Established under Article 143 of the Constitution of the URT). The statutory duties and responsibilities of the Controller and Auditor General are given under Article 143 of the Constitution of the URT of 1977 (revised 2005) and further elaborated in Sect 10(1) of the Public Audit Act No 11 of 2008. Vision To be a centre of excellence in public sector auditing. Mission To provide efficient audit services in order to enhance accountability and value for money in the collection and use of public resources. In providing quality services, NAO is guided by the following Core Values:

Objectivity: We are an impartial organization, offering services to our clients in an objective and unbiased manner;

Excellence: We are professionals providing high quality audit services based on best practices;

Integrity: We observe and maintain high standards of ethical behavior and the rule of law;

People focus: We focus on stakeholders’ needs by building a culture of good customer care and having competent and motivated work force;

Innovation: We are a creative organization that constantly promotes a culture of developing and accepting new ideas from inside and outside the organization; and

Best resource utilization: We are an organization that values and uses public resources entrusted to it in an efficient, economic and effective manner.

We do this by:- • Contributing to better stewardship of public funds by ensuring that our clients are

accountable for the resources entrusted to them; • Helping to improve the quality of public services by supporting innovation on the

use of public resources; • Providing technical advice to our clients on operational gaps in their operating

systems; • Systematically involve our clients in the audit process and audit cycles; and • Providing audit staff with adequate working tools and facilities that promote

independence. © This audit report is intended to be used by Government Authorities. However,

upon receipt of the report by the Speaker and once tabled in Parliament, the report becomes a matter of public record and its distribution may not be limited.


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Foreword Over the past two years, the Public has seen the gradual improvement in the accountability process in Tanzania. This has been made possible not only because of my annual audit reports, but also due to the political will existing within the Fourth Phase Government under the leadership of the President of the United Republic of Tanzania His Excellency Hon Dr. Jakaya Mrisho Kikwete and the constructive contributions from the Parliament of Tanzania through its three Oversight Committees of PAC, LAAC and POAC. May I register my appreciation to all those who created for me an enabling environment to discharge my Constitutional obligations and henceforth the timely completion of this report. This report is being submitted to the President of the URT in accordance with Article 143 of the Constitution of the United Republic of Tanzania (revised 2005) and Section 34(1) & (2) of the Public Audit Act No. 11 of 2008. Pursuant to Article 143(2) (c) of the Constitution of the URT, the Controller and Auditor General shall at least once every year audit and give an audit report in respect of the accounts of the Government of the United Republic, the accounts managed by all officers of the Government of the United Republic and the accounts of all Courts of the United Republic and the accounts managed by the Clerk of the National Assembly. Under Article 143(4) of the Constitution of the URT, the Controller and Auditor General is required to submit to the President of the URT every report he makes pursuant to the provisions of sub Article (2) of the same Article. Upon receipt of such reports, the President shall direct the persons concerned to submit these reports before the first sitting of the National Assembly preferably before the expiration of seven days from the day the sitting of the National Assembly began. The enactment of the Public Audit Act No. 11 of 2008 enhanced the operational independence of my office in the fulfillment of


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my Constitutional mandate. This was a result of the efforts of his Excellency the President of the United Republic of Tanzania. The operational independence of my office is expected to enable me acquire the necessary control over all the resources available for the office including human and financial resources, which will enable my office to perform its tasks without being under the undue influence and control of any person or authority. The legislation has broadened the scope of audit to be conducted by my office by mandating me to carry out in addition to the normal Regularity and Performance audits, Forensic, Environmental and Special Audits. It is my hope that with the enactment of this new legislation, my office will endeavor in enforcing financial controls and assist the Government in the enhancement of public accountability. In essence, the legislation will enable me to provide the necessary independence assurance to Parliament and through it to the public concerning such issues as accountability, transparency and probity in the use of public resources and in particular as to whether such resources have been effectively spent with due regard to economy, efficiency and effectiveness as intended and appropriated by Parliament. It is worth noting that while my office reports on any non compliance with various laws, rules and regulations and on weaknesses in internal control systems across the public sector entities and in particular the Central Government, the ultimate responsibility for the maintenance of an effective and adequate system of internal control and a compliant framework lies with each Accounting Officer. Parliament and the Tanzanian public looks upon the Controller and Auditor General and the National Audit Office (NAO) for assurance in regard to financial reporting and public resources management in the Central Government and in relation to efficiency and effectiveness of programs administration. My office contributes through recommendations given towards improvements in the public sector performance. In this regard, the Central Government and my office each have a role to play in contributing to Parliamentary and public confidence building in


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public resources management. However, while the roles of public sector entities and NAO may differ, the desire for efficient utilization of public resources remains a common ground. In order to meet the Parliamentarians’ and the public expectations, NAO continually reviews its audit approaches to ensure that the audit coverage provides an effective and independent review of the performance and accountability of public sector entities. Moreover, we seek to ensure that our audit coverage is well targeted and addresses priority areas so as to maximize our contribution in improving public administration. Since our work acts as a catalyst in improving financial management, we continue discussing with our auditees contemporary issues and developments that impact on public sector management, particularly financial reporting and good governance. The Public Accounts Committee (PAC) one of the oversight committees of Parliament has done a commendable job in taking to task all Accounting Officers of MDAs who were found not to have performed their duties to the expectations of the Committee. With all these efforts, I believe the Central Government has a crucial role to play in bringing about the desired improvements in financial accountability in the public sector. I would like to acknowledge the professionalism and commitment of my staff in achieving our goals and undertaking the work associated with meeting our ambitious audit programs despite the fact that they have been working in very difficult conditions marked with insufficient funding, working tools, low salaries and sometimes working in very remote and un-easily accessible locations. I would also like to acknowledge the work done by PPRA, Stock Verification Unit and Treasury Registrar for preparing and submitting reports on performance of the entities under their jurisdiction for the financial year 2008/2009 that highlighted most of the issues which also largely featured in my previous


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report. I appreciate the work done by these entities which I found appropriate and relevant to be incorporated in my report. I hope that the National Assembly will find the information in this report useful in holding the Government to account for its stewardship of public funds and its delivery of improved public services to Tanzanians which it is serving. In this regard, I will appreciate to receive feedback from the users of this report on how to further improve it in the future.

Ludovick S.L. Utouh CONTROLLER AND AUDITOR GENERAL _____________________________ National Audit Office, Dar es Salaam,

March, 2010


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Acknowledgement

I would like to express my gratitude to those who created an enabling environment for me to discharge my Constitutional obligations. I would like to thank every member of my staff for their endeavors to once again, meet the statutory reporting deadline. With lots of appreciation, I am obliged to pay tribute to my family and the families of my staff members for their tolerance during our long absence from them in fulfilling these Constitutional obligations. Further, my sincere thanks are extended to the donor community particularly the Swedish National Audit Office (SNAO), the Government of Sweden through SIDA and SNAO, the World Bank through the PFMRP project and all well wishers who have contributed immensely towards the transformation of my office. Their contributions in developing human resource, IT systems and physical assets have tremendous impact in our success. We still need more assistance in further modernizing the audit function in the public sector which would have greatly been speeded up if we could have a willing donor to fund the construction of the envisaged Audit Training Centre to be constructed in Bagamoyo.

I am equally indebted to all our other stakeholders including the Paymaster General, the Treasury and all Accounting Officers of the MDAs, Stock Verification Unit and the Treasury Registrar of the Ministry of Finance and Economic Affairs for the much needed support, cooperation and for providing vital information needed for the preparation of this report. I would also like to thank the Government Printer for expediting the printing of this report for its timely submission. Last but not least, I would like to thank all the public servants throughout the MDAs in Tanzania mainland, whether in Central or Local Governments without forgetting the role of taxpayers to whom this report is dedicated. Their invaluable contributions in building the nation cannot be underestimated.


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May the almighty God bless you all as we commit ourselves to promote accountability on the use of public resources in the country.


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List of abbreviations

A/C Account AfDB African Development Bank ACGEN Accountant General CAG Controller and Auditor General CDTI Community Development Training Institute CFS Consolidated Financial Statements CPO Central Payment Office FDCs Folk Development Colleges HIV Human Immuno-deficiency Virus IFMS Integrated Financial Management System INTOSAI International Organization of Supreme Audit Institutions ISA International Standards on Auditing JKT Jeshi la Kujenga Taifa LART Loans and Realization Trust LGAs Local Government Authorities MDAs Ministries, Departments and Agencies, NAO National Audit Office PFA Public Finance Act No. 6 of 2001(revised 2004) PFMRP Public Financial Management Reform Programme PFR Public Finance Regulations PMG Paymaster General PPA Public Procurement Act No. 21 of 2004 PPRA Public Procurement Regulatory Authority RAS Regional Administrative Secretariats RCCB Revenue Collectors Cash Book Reg. Regulation Sect. Section SUMA Shirika la Uchumi na Maendeleo TCAA Tanzania Civil Aviation Authority. TEMESA Tanzania Electrical and Mechanical Services Agency TRA Tanzania Revenue Authority URT United Republic of Tanzania USD United States Dollars PAC Public Accounts Committee


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Table of contents

Office of the Controller and Auditor General ...................... iv Vision ..................................................................... iv Mission .................................................................... iv Foreword................................................................... v Acknowledgement ....................................................... ix List of abbreviations .................................................... xi Table of contents ..................................................... xiii Executive Summary ................................................... xvii A: Introduction ................................................... xvii CHAPTER 1: BACKGROUND AND GENERAL INFORMATION ....... 1 1.1 Audit of Public Accounts ....................................... 1 1.2 Functions and Responsibilities of the CAG to the MDAs,

RAS and Embassies/Missions .................................... 2 1.3 Organisation of Audit Work at National Audit Office ....... 2 1.4 Scope and Applicable Audit Standards ........................ 3 1.5 Accounting Policies .............................................. 4 1.6 Statutory responsibilities of MDAs/RAS and

Embassies/Missions .............................................. 5 1.7 Internal Control Systems ........................................ 5 1.8 Preparation and submission of financial statements for

audit ................................................................ 6 CHAPTER 2: BASIS AND TREND OF AUDIT OPINION ............... 7 2.0 Introduction ....................................................... 7 2.1 Types of audit opinion .......................................... 8 2.2 Trend of audit opinion in Central Government ........... 12 CHAPTER 3: PRESENTATION AND ANALYSIS OF AUDIT RESULTS . 15 3.0 Introduction ..................................................... 15 3.2 Unqualified opinions with Emphasis of matters ........... 15 3.3 Qualified Opinions ............................................. 15 3.4 Adverse Opinion ................................................ 15 3.5 Disclaimer of opinion .......................................... 16 3.6 MDAs/RAS issued with Unqualified Opinion with Emphasis

of Matters ....................................................... 16


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3.7 MDAs/RAS issued with Qualified Opinion ................... 46 3.7 MDAs/RAS issued with Adverse Opinions ................... 55 CHAPTER 4: PERFORMANCE REPORT ON SELECTED SECTORS 59 4.1 Education Sector ............................................... 59 4.2 Energy and Minerals ........................................... 68 4.2.1 Performance of the Energy and Minerals Sector ........ 68 4.3 Perfomance of Health Sector ................................ 72 4.3.3 Health Facilities ................................................ 78 4.4 Infrastructure Development Sector ......................... 79 CHAPTER 5: AUDIT RESULTS OF DONOR FUNDED PROJECTS,

AGENCIES, EMBASSIES/MISSIONS AND PROGRAMMES UNDER VOTES 5.0 Introduction ..................................................... 83 Opinion: Unqualified with Emphasis of matter: ................... 86 5.1 Audit of Embassies/Missions .................................. 87 5.2. Missions/Embassies with Unqualified opinion without

emphasis of matters ........................................... 88 5.2.1 Missions/Embassies with Unqualified Opinion with

emphasis of matters ........................................... 88 CHAPTER 6: FINANCIAL AND ASSET MANAGEMENT ............. 97 6.1 Outstanding matters from previous audits ................. 97 6.2 Funding Analysis for MDAs/RAS and Embassies/Missions

for 2007/2008 and 2008/2009................................ 99 CHAPTER 7: REVIEW OF PROCUREMENT PROCESSES .......... 107 7.0 Introduction .................................................... 107 7.1 Performance of Procuring Entities (PEs) .................. 107 7.2 Common weaknesses noted by PPRA ....................... 108 7.3 Procurements made without Annual Procurement Plans112 7.4 Procurements Made Without Tender Board’s Approval 112 7.5 Irregularities in procurement and maintenance of motor .. 113 7.6 Weakness in contracting and contract management

Shs.3,115,507,827 ............................................. 115 7.7 Goods/services paid for but partly/not delivered ....... 116 7.8 Stores not recorded in stores ledger – Shs. ............... 117 7.9 Stock verification reports on stores management ...... 118


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CHAPTER 8: AUDIT RESULTS OF TANZANIA REVENUE AUTHORITY (TRA) ............................................ 121

8.0 Introduction .................................................... 121 8.1 Audit Results of Tanzania Revenue Authority (TRA) .... 121 8.2 Result of audit of the National Consolidated Financial

Statements ..................................................... 127 8.2.2 Outcome of the audit ........................................ 127 8.2.3 Outstanding matters from the previous year – ........... 127 2007/08 ................................................................. 127 8.2.4 Expenditure performance .................................. 130 CHAPTER 9: REPORT ON PRE-AUDIT OF TERMINAL BENEFITS FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2009 9.1 Purpose of the pre-audit ..................................... 145 Pre-audit coverage .................................................... 145 9.2 Detailed findings and recommendations .................. 146 9.2.2 Over /under calculation of terminal benefits ............ 146 9.3 The way forward .............................................. 150 CHAPTER 10: CONCLUSION AND RECOMMENDATIONS ......... 151 10.1 Conclusions ..................................................... 151 10.2 Recommendations ............................................ 155 (xi) Umoja bridge .................................................... 161 ANNEXURES ............................................................. 162


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Executive Summary

This year’s Annual Audit Report for the Central Government dwells on the following: (A) Introduction (B) Trend of Audit Opinions issued (C) Major internal control weaknesses noted during the

audit (D) Procurement Irregularities (E) Tax issues (F) Weaknesses in payroll system management (G) Matters relating to Payment of terminal benefits (H) Performance report on selected sectors (I) Acquisition of government motor vehicles (J) Shortfalls in the management of government properties. (K) Conclusion and Recommendations

A: Introduction

This part of the report gives a summary of the final results of the audit of the financial statements of the Central Government for the financial year ended 30th June 2009. The scope of audit in the Central Government comprises of Ministries, Independent Departments Executive Agencies, Regional Administrative Secretariats, Embassies/ Missions and Donor Funded Projects.

B: Trend of Audit Opinions The outcome of the audits for the year under review has shown positive improvement in the opinions issued to the Central Government entities as tabulated below:


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Category of

entities Unqualified

opinions

Qualified opinions

Adverse Opinions

Total

F/Y 2007/8 2008/9 2007/8 2008/9 2007/8 2008/9 2007/08 2008/09

MDAs

35 46 11 5 3 1 49 52

RAS

14 18 7 2 - 1 21 21

Emba-ssies/Missions

22 27 8 4 2 1 32 32

Total 71 91 26 11 5 3 102 105

% age 70% 86% 26% 11% 5% 3% 100% 100%

From the table above, the trend shows that unqualified opinions for MDAs and RAS have increased from 71 (70%) to 91 (86%) while qualified opinions have declined from 26 (26%) to 11 (11%) in the financial years 2007/08 and 2008/09 respectively. This year’s results have recorded three (3) (3%) adverse opinions as compared to 5 (5%) of the previous year.

Even though the trend of audit opinions has shown positive improvements, however, there are still major weaknesses in internal controls and non compliance with laws/regulations warranting the attention of Accounting Officers which will be covered in subsequent paragraphs of this report.

C: Major weaknesses noted during the audit

During the course of the audit, we came across the following weaknesses which are covered in detail under respective chapters of this report. The weaknesses can be summarized as follows: • Partial compliance with the International Public Sector

Accounting Standards (IPSAS) – cash basis of accounting • Non compliance with the procurement laws and related

regulations


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• Weak internal control systems over management of assets, control of cash and revenue collections

• Non implementation of some of my previous years’

recommendations.

D: Procurement Irregularities

In the individual management letters submitted to each Accounting Officer, I have made a statement that almost all MDA and RAS did not fully comply with the procurement laws as required by the Public Procurement Act No. 21 of 2004 and its related Regulations of 2005. The review of the procurement process found that there is a substantial work to be done in ensuring that all procurements made by MDAs and RAS comply with the above stated procurement laws and regulations. Embassies/Missions on the other hand, are governed by the Foreign Service Regulations and Circulars issued by the Permanent Secretary Ministry of Foreign Affairs and International Cooperation on all matters relating to procurement. However, the Foreign Service Regulations in use are completely outdated and therefore needs immediate updating.

The findings on procurement irregularities presented in this report have amounted to Shs.12,897,251,674 which includes the following:-

S/No Details No. of MDAs/RAS

Amount involved (Shs)

1.

Procurement of Stores not recorded in ledger

8 2,273,828,586

2. Short or non delivery of goods/services

4 1,660,648,095

3. Procurement 3 1,828,731,583


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without Tender Board’s approval

4.

Irregularities in procurement and maintenance of motor vehicles

14 4,018,535,583

5.

Weaknesses in contracting and contract management

7 3,115,507,827

Total 36

12,897,251,674

E: Tax issues

Audit results of Tanzania Revenue Authority have been reported together with the Consolidated National Accounts under Chapter 8 of this report. Key findings on Tax revenue collected by TRA includes:

• Outstanding matters relating to the previous audit reports

amounting to Shs.95,784,249,724 and USD 47,954,784.

• The tax revenue accounts for Tanzania Mainland closed with an actual collection of Shs.4,174,371,105,259 against an Approved Estimates of Shs.4,600,849,900,000 resulting in an under collection of Shs.426,478,794,741.

• The TRA revenue statements reported tax exemptions of

Shs.752,398,800,000 equivalent to 18% of total collections. In real terms therefore, there was no under collection of the tax revenues since if the Sh.752,398,800,000 tax exemption had not been foregone, total collection would have amounted to Shs.4,926,769,905,259 which would have resulted in an over collection of Shs.325,920,005,259.


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On the part of the Consolidated National Accounts, key results which require government’s attention includes:

Items Amount (Shs.)

Increase in government commitments 289,387,271,000 Contingent liabilities 42,730,980,828

Government Guarantees 632,035,342,026 Liabilities not reported 21,630,000,000 Government Investments

7,074,822,870,933

Increase in Public Debt 1,143,834,887,616 Expenditure above approved budget

67,412,110,917

Understatement of the Consolidated Financial Statements

8,501,629,017

Difference between Exchequer Issues on the supply and Development Votes

371,244,515,827

Also, there was a noted weakness in maintaining information and data related to government investments and guarantees.

F: Weaknesses in payroll management Shs.3,078,128,143

During this year’s audit, I made an assessment of payroll system and risk management whereby the main focus was to identify areas of weakness in payroll management in the civil service. The outcome of this assessment revealed the following: • Salaries of Shs.2, 566,802,422; though budgeted and

accounted for under vote 99, were actually paid under vote 63 of which the Accounting Officer has no direct control of.

• There was an overpayment of salaries amounting to

Shs.12,682,010 made to the Regional Secretariat employees


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under Sub-Vote 3001 (Health Department) contrary to the Establishment Circular No. 2 of 2008.

• Payments of salaries amounting to Shs.53,543,371.08 were not supported by computer payroll printouts.

• Unclaimed salaries amounting to Shs.445,100,340 relating to retired, deceased and terminated employees were not returned to Treasury.

G: Matters relating to Payment of terminal benefits My controllership function mandates me under Reg.56 of PFR, 2001 to do pre – audit of terminal benefits. Chapter 9 of this report highlights key results of pre-audit of terminal benefits conducted in the year under review. The audit has observed that there was: Overstated terminal benefits of Shs.395,842,894.00 Understated terminal benefits of Shs.186,504,266.00

Main problems encountered during the audit of terminal benefits were as follows: • Using wrong salaries as the basis of calculating terminal

benefit payments • Combining pensionable terms and contract terms • Conflicting resolutions by some civil servants which

contravenes pension laws • Non compliance with pension laws • Delay in submission of pension papers for audit • Incomplete documentation of terminal benefit claims • Incorrect calculation of terminal benefits • Double claims of terminal benefits (Pension plus contract

benefits) • Incomplete documentation of employee’s records prior to

retirement.

H: Performance report on selected sectors


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In this year’s audit I have introduced a chapter on performance of selected sectors in order to evaluate their contribution to the economy and social development of this country including challenges encountered and the way forward. My evaluation of these sectors is based on the performance reports submitted to me by the Permanent Secretaries of the respective Ministries. The outcome of my evaluation based on the submitted performance reports is summarized below:- (i) Education sector

Under the Education Sector, the following was noted:-

• Enrolment in Pre-Primary education increased by 40% in year 2005 – 2009

• Enrolment in Primary education increased by 12% in year

2005 – 2009 • Enrolment in Secondary education increased by 179% in

year 2005 – 2009

• Primary schools increased from 14,257 schools in 2005 to 15,727 schools in 2009. This is an increase of 9% as compared to 2008.

• Number of secondary schools increased significantly from

1,745 in 2005 to 4,102 in 2009 due to Community participation in construction of schools and Private Sector Partnership being encouraged in the education sector.

• The Education sector budget increased from

Shs.254,795,141,000 in 2006 /2007 to Shs.552,047,748,000 in 2008/2009 which is an impressive 117% increase. Apparently, both the Central Government, the Private Sector and Development Partners have given greater support in the development of this sector.

(ii) Energy Sector


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Under the Energy and Minerals sector, the following key issues were noted:-

• The Ministry has persistently recorded under-performance

on its Development budget for three years consecutively, apparently due to budget constraints.

• During the three years period (2006/2007 – 2008/2009), the Ministry received less Exchequer Issues ranging between 9% to 19% of the total budget approved by Parliament as shown below:-. Budgetary allocation to the Ministry of Energy and Minerals for three years against the amount released by Treasury shows the following trend:-

Year Approved budget

(Shs) Exchequer

release (Shs)

% of amount released Vs

approved budget 2006/07 229,306,758,053 33,099,250,195 14%

2007/08

312,409,585,000

28,645,148,000

9%

2008/09

243,058,819,210

45,336,238,883

19%

(iii) Health Sector performance

The health sector in Tanzania is facing human resource problem which negatively affects the ability of the sector to deliver quality health and social welfare services to the people. According to the submitted performance report on the Health Sector, the following accomplishment and challenges were noted:

• There has been an increase in the number of health

facilities in the country as majority of the population now lives within five kilometers from a health facility.


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• Health sector depends mainly on contributions from the development partners, and as such for the three years they contributed an average of 93 Percent to the health sector.

• Financing of the Health Sector has shown that

Development approved funds were not released by Donors and the Government of Tanzania as expected

• The national average of the number of people served by

one medical doctor stood at 64,000 while the WHO recommendation is for one doctor to serve a population of 10,000.

• The costs for treatment abroad are increasing and to

reverse this trend, means to speed up expansion and modernization of the local capacity for providing these services within Tanzania.

(iv) Infrastructure Development

In evaluating the above sector, more emphasis was put on weighbridges and bridges. The annual progress report from the Ministry of Infrastructure Development revealed the following weaknesses regarding operationalization of weighbridges:

• Objectives for having weighbridges in place were being

wrongly perceived among the ordinary people including those who operates them.

• Penalties that were being imposed on the overloading

trucks were no longer deterring the trucks from overloading since the penalties charged are too low to generate any impact.

• On the Construction of Umoja Bridge,Tanzania and

Mozambique entered into agreement to Construct the Umoja Bridge. Following the physical visit of senior officers at the site, further developments were identified which, if


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implemented will facilitate smooth operationalisation of the bridge as follows:-

• The necessary infrastructure at the bridge like police

posts, customs, immigration services were lacking.

• There was no accessibility to the bridge due to the lack of reliable tarmac road from the bridge to the Masasi – Tunduma road (about 70 km stretch) and to the nearest District Headquarters in Mozambique (about 165 km stretch).

• There were no immediate plans in place to ensure

sustainability of the bridge.

• There was no joint committee or Commission between the two countries to oversee the operations and maintenance of the bridge.

I: Acquisition of government motor vehicles

Shs.4,018,535,583

Reg. 5 of the Public Procurement (Goods, works, non consultant services and disposal of public assets by tender) Regulations of 2005 sets out the procedures for procurement and maintenance of government motor vehicles. During this years’ audit, we encountered irregularities in acquisition of government motor vehicles as summarized below where questionable costs for maintenance of motor vehicles – value for money was doubted.

• The motor vehicles procured had no documentary evidence to confirm their existence

• Value of a motor vehicle was not compensated by the ship owner after the vehicle drowned in the sea.

• Tenders for hiring motor vehicles were not awarded in a competitive manner.


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• Questionable costs for maintenance of motor vehicles –Shs. 103,534,922

• Uncompetitive hiring of motor vehicles Shs.148,836,000

Details of the above findings are covered under Chapter 7 of this report.

J: Shortfalls in the management of government properties

Most of the Government office buildings and residential houses in most of our Missions/Embassies are in deplorable condition. Specifically the Government buildings in Lusaka, Cairo, Kinshasa and Maputo are on the verge of being condemned. The details of these office buildings/residential houses are covered in detail under Chapter 10 of this report.

K: Recommendations

Lastly, as per the mandate vested in me under Sect.10 of the Public Audit Act No. 11 of 2008, I have made a number of recommendations in Chapter 10 of this report, of which if implemented I believe will contribute in improving the management of public resources in our country. The recommendations include among others the following:

• Prompt action on my previous years’ recommendations; • Compliance with laws and reporting frameworks; • Improvement of internal controls and enhancement of

accountability in Government expenditures; • Strengthening procurement processes including effective

procurement contract management by complying with procurement laws;

• Improvement of terminal benefit payment procedures.


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CHAPTER 1

1.0 BACKGROUND AND GENERAL INFORMATION

This report is issued following the audit of the accounts and underlying documents of MDAs/RAS/Embassies/Missions pursuant to Article 143 (4) of the Constitution of the United Republic of Tanzania of 1977 (revised 2005) and sect. 34(1) (c) of the Public Audit Act No. 11 of 2008 for the financial year ended on 30th June 2009.

1.1 Audit of Public Accounts

I am required by Article 143 of the Constitution of the URT to audit the Public Accounts and all offices, Courts and authorities of the Government of Tanzania and submit my reports thereon to the President who shall cause them to be laid before Parliament. In discharging these duties, I am required in terms of Section 10 of the Public Audit Act No. 11 of 2008, to satisfy myself that: • All reasonable precautions have been taken to

safeguard the collection of public moneys and that the law, directives or instructions relating thereto have been duly observed.

• All monies from the Consolidated Fund are authorized and issued according to the Appropriation Act.

• All monies disbursed have been expended and applied under proper authority and for the purpose intended by such authority and, adequate regulations exist for the guidance of storekeepers and stores accounts and that they have been duly observed.

In addition, I have the duty, by virtue of the same Section to draw the attention of the President/Parliament to any apparent lack of economy in the expenditure or use of public moneys or stores.


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1.2 Functions and Responsibilities of the CAG to the MDAs, RAS and Embassies/Missions

The statutory responsibilities of my office to audit the accounts of MDAs, RAS and Embassies/Missions are given under Sect. 10(1) of the Public Audit Act No.11 of 2008. From the law, I am responsible for examining, inquiring into, auditing and reporting on the accounts of all Ministries and Departments of the Government and their Accounting Officers, all persons entrusted with the collection, receipt, custody, issue or payment of public monies or with the receipt, custody, issue, sale, transfer or delivery of any stamps, securities, stores or other public property. Further, my responsibilities covers all public authorities and other bodies, any authority or body which receives funds from the Consolidated Fund or from public monies for a public purpose, any authority or body which is authorised by law to receive money for a public purpose and any authority or body required by law to be audited by my office.

1.3 Organisation of Audit Work at National Audit Office

The report provides a summary of the final results of the audit exercise, which was carried out by my Office throughout the country in the course of the year under review. In order for my office to effectively handle this enormous task of auditing all the MDAs and RAS in the country, it has established offices in the Ministries and Regions in Tanzania mainland for administrative purposes. These Regional and Ministerial offices are under the supervision of Resident Auditors who report to the Zonal Auditors. We found it useful to group our auditees into small manageable groups named zones headed by Zonal auditors.


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Audit Staff

It is worth noting Government’s efforts in improving the welfare of my staff although there is a need for further improvement. I have submitted a new proposed organization structure for my office which was recently approved by His Excellency Dr. Jakaya Mrisho Kikwete the President of the United Republic of Tanzania. I have also submitted a proposal of salary package for my office to the President’s Office – Public Service Management. In the meantime, the audit scope has expanded considerably. There is an intention of expanding our coverage up to the district level. These efforts would require the approval of the government and set aside a budgetary provision to cater for this expansion.

In keeping with current trends, the audit work is no longer confined to financial and compliance auditing. It is my intention to ensure that members of my audit staff are trained in performance, environmental, gender based auditing, management auditing, risk based auditing and Information Technology (Computer Assisted Audit Techniques – CAATs) in order to be able to perform what is commonly referred to as comprehensive audit which encompasses every aspect of an organization.

1.4 Scope and Applicable Audit Standards 1.4.1 Scope of Audit

The scope of audit covered, on risk and materiality basis, revenue collection, proper expenditure authorization in terms of the Appropriation Act, performance of capital projects, the Treasury performance, the TRA performance and all foreign mission’s financial audits. Audits were performed to satisfy myself as to compliance with established regulations, the exercise of economy, efficiency and effectiveness in the utilization of public resources and to highlight irregularities, although not exhaustively, that have been reported on in some detail


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not only through regular inspection reports, but more emphatically through reference sheets to spotlight areas of serious concerns on proper accountability and need for stringent administration of public resources. In the course of the audit, the findings are brought to the attention of the MDAs/RAS, Ambassadors/High Commissioners and Donor Funded projects being audited. Accounting Officers are given an opportunity to respond to my observations, recommendations and related commentary. All Accounting Officers are issued with two reports, one is the report signed by the Controller and Auditor General which contains the audit opinion and the other one is the management letter signed by the Assistant Auditor General and issued separately.

1.4.2 Applicable Auditing Standards

The National Audit Office (NAO) is a member of the International Organisation of Supreme Audit Institutions (INTOSAI), the African Region Organization of Supreme Audit Institutions (AFROSAI) and the African Region Organization of Supreme Audit Institutions – English speaking counties (AFROSAI - E). We therefore apply in our audit procedures, the auditing standards issued by INTOSAI and the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC) in which Tanzania is a member through the National Board of Accountants and Auditors (NBAA).

1.5 Accounting Policies

Reg.53 of the Public Finance Regulations 2001 (revised 2004) states that the accounting policies of the Government are so framed to ensure that the resources appropriated by Parliament are properly accounted for. In terms of the Public Finance Act No. 6 of 2001 (revised 2004) all revenues received by the Government shall be deposited into the Consolidated Fund. Payments out of the


5

Consolidated Fund will be through appropriations by Parliament.

This is the second year the government accounts have been prepared based on IPSAS - cash basis of accounting. Under IPSAS cash basis of accounting, revenue earned by Government is not realized until received in cash and on the expenditure side, charges are made only when the payment has been processed through. Fixed assets e.g land, buildings and vehicles etc. are not included in the accounts. These are charged as budgetary expenditure at the time of acquisition.

1.6 Statutory responsibilities of MDAs/RAS and

Embassies/Missions The management of MDAs/RAS and Embassies/Missions particularly the Accounting Officers/Sub Accounting Officers are the stewards of the public resources under their area of responsibilities. In respect of their responsibilities enshrined under Sect.8 of the Public Finance Act No.6 of 2001 (revised 2004), Accounting Officers/Sub Accounting Officers are responsible and accountable for public resources under their jurisdiction. In safeguarding the resources under them, it is of paramount importance for Accounting Officers to ensure the existence of effective and workable internal control systems is in place.

1.7 Internal Control Systems

Internal control systems refer to all means by which Government resources are directed, monitored, and measured. Internal controls play an important role in preventing and detecting frauds/misappropriations and protecting the public resources, both physical and intangible. Implementing an effective internal control structure is an essential responsibility of the management of the entity.


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1.8 Preparation and submission of financial statements for audit

The responsibility for the preparation and presentation of financial statements to the Controller and Auditor General for audit purposes lies with the individual Accounting Officers of MDAs/RAS/Embassies/Missions. In addition, Sect. 25 of the PFA 2001(revised 2004); specifies the types of financial statements to be prepared by the Accountant General, Accounting Officers and other Public Officers administering legally established funds. Moreover, Sect. 25(4) of the same Act requires the accounts to be presented in accordance with generally accepted accounting principles and disclosure of the accounting basis adopted is a legal requirement. For the second year running the financial statements of MDAs/RAS/Embassies/Missions have been prepared based on the International Public Sector Accounting Standards (IPSAS) – cash basis of accounting which is in line with the requirement of Reg. 53 of the PFR 2001 (revised 2004).

Reg. 8 (5) of the PFR 2001 requires every Ministry, Agency, Department, Regional Secretariats and Embassies/Missions to prepare and make available to the general public an Annual Report stating the overall budget strategy, nature and objectives of each main programme, assessments of outputs as well as performance against objectives. Also, Accounting Officers are supposed to prepare a summary of the financial results for the fiscal year in a form approved by the Accountant General, the plans for the year ahead, as approved by Parliament and the provisional plans for the two subsequent years. Almost all MDAs RAS and Embassies complied with this requirement.


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CHAPTER 2

BASIS AND TREND OF AUDIT OPINION

2.0 Introduction

The auditor's opinion is a formal opinion, or disclaimer thereof, issued by an independent external auditor as a result of an audit on the financial statements or evaluation performed on an entity or subdivision thereof (called an “auditee”). The opinion is provided to the user of these financial statements as an assurance service in order for the user to make decisions based on the results of the audit.

An auditor’s opinion is considered an essential tool when reporting financial information to users. In the public sector it is intended to advise Parliament and other users on whether MDA’s/RAS’s financial statements have been prepared in conformity with the International Public Sector Accounting Standards (IPSAS) - cash basis of accounting and in the manner required by Sect 25(4) of the Public Finance Act, 2001 (revised 2004) including the MDAs/RAS compliance with laws and regulations.

In ordinary language, the opinion is an assurance on whether the financial information presented by the auditee is materially correct and trustworthy for making various decisions such as the Government’s decision on whether the allocations made to MDAs/RAS have been spent to benefit the citizens. It is important to note that the auditor’s opinion on the financial statements are neither evaluations nor opinions as to the financial health, performance, attractiveness, potential, or any other similar determination used to evaluate entities in order to make a decision. It is only an opinion on whether the information presented is correct and free of material misstatements, whereas all other determinations are left for the user to decide.


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2.1 Types of audit opinion

There are five common types of auditor’s opinions, each one presenting a different situation encountered during the auditor’s work. The five opinions are as follows:

(i) Unqualified Opinion

Unqualified Opinion is sometimes regarded by many as equivalent to “Clean audit opinion”. This type of opinion is issued when the financial statements presented are free of material misstatements and are in conformity with the International Public Sector Accounting Standards (IPSAS) - cash basis of accounting and in the manner required by Sect 25(4) of the Public Finance Act, 2001 (revised 2004) including compliance with laws and regulations. It is the best type of an audit opinion an auditee may receive from an external auditor.

(ii) Unqualified opinion with Emphasis of Matter

In certain circumstances, the audit opinion may be modified by adding an emphasis of matter paragraph to highlight a matter(s) affecting the financial statements. The addition of such an emphasis of matter paragraph does not affect the audit opinion. The main objective of the emphasis of matter paragraph is to bring closer understanding of the situation obtained in the audited entity, despite the unqualified opinion given.

(iii) Qualified Opinion The nature of the circumstances giving rise to the qualification will generally fall into one or two categories.

• Where there is an uncertainty which prevents the auditor from forming an opinion on a matter (Uncertainty)


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Matters which may give rise to this type of opinion are as follows:

• Expenditures incurred without payment vouchers • Goods or services procured were not supported by

delivery notes, hence there is no confirmation whether they were actually received or recorded.

• Various payments were not supported by proper documents.

• Revenue receipt books were not submitted for audit verification

• Assets owned or purchased were not supported by schedules. This may lead to doubtful existence of the Assets.

• Unavailability of confirmation from the payees on the payments made. Lack of acknowledgement receipts from the payees could lead to possible misappropriation of funds. In this regard, there is a limitation of scope of audit.

(b) Where the auditor is able to form an opinion on a matter but this conflicts with the view given by the financial statements (Disagreement in best practice on records keeping and non compliance with Laws and Regulations).

Disagreement with Management on best practices on records keeping and compliance with Laws occurs in the following situations. • The assets owned by the MDAs/RAS but not recorded in

Registers. • Stores purchased and paid for are not recorded in stores

ledgers, hence the issues and utilities cannot be ascertained.


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• There are no disclosures of bank balances in the books of accounts

• When the accounting records are omitted, incomplete

or in accurate. • Where there is in adequate disclosure of accounting

policies • When the MDAs/RAS uses inappropriate accounting

method eg. in appropriate depreciation rate/charge.

Qualified Opinion will therefore show that financial statements present fairly the state of affairs except for effects of a specific audit observation.

(iv) Adverse Opinion

An Adverse Opinion is issued when I determine that the financial statements of a MDA/RAS are materially misstated and, when considered as a whole, do not conform to the International Public Sector Accounting Standards (IPSAS) - cash basis of accounting and in the manner required by Sect 25(4) of the Public Finance Act, 2001 (revised 2004), essentially stating that the information contained is materially incorrect, unreliable, and inaccurate in order to assess the MDA’s/RAS results of operations.

The wording of the adverse opinion are clear in which I state that the financial statements are not in accordance with the International Public Sector Accounting Standards (IPSAS) - cash basis of accounting and in the manner required by Sect 25(4) of the Public Finance Act, 2001 (revised 2004).

(v) Disclaimer of Opinion

A Disclaimer of Opinion, commonly referred to simply as a Disclaimer, is issued when I could not form, and


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consequently refuses to present, an opinion on the financial statements. This type of opinion is expressed when I tried to audit an entity but could not complete the work due to various reasons and therefore I do not issue an opinion. Certain situations where a disclaimer of opinion may be appropriate includes a lack of independence, or, when there are significant scope limitations, whether intentional or not, or refuses to provide evidence and information to me in significant areas of the financial statements and when there are significant uncertainties within the auditee. Table: Matrix for the Basis of expressing an audit opinion

Nature of Circumstances

Material but not Fundamental

Material and Fundamental

Disagreement “EXCEPT” FOR OPINION (QUALIFIED OPINION)

ADVERSE OPINION

Uncertainty DISCLAIMER OF OPINION

The above table guides the formation of an audit opinion and its interpretation is as follows: (a) Where audit findings constitute disagreement and

the matter is material but not fundamental, the opinion is qualified (Except for matter is material and fundamental, the opinion is adverse

(b) Where audit findings constitute Uncertainty and

(i) The uncertainty is material but not fundamental, the opinion is qualified (except for) (ii) The uncertainty is material and fundamental, disclaimer of opinion is expressed.

NAOT objective is to produce reports that present a balanced perspective, place primary emphasis on critical


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matters requiring attention, and identify workable opportunities for improvements.

2.2 Trend of audit opinion in Central Government

The following table presents the trend of audit opinions issued to MDAs/RAS votes for the period of two years from 2007/08 and 2008/09 ( See Annexure I)

Category of entities

Unqualified opinions

Qualified opinions

Adverse Opinions

Total

F/Y 2007/8 2008/9 2007/8 2008/9 2007/8 2008/9 2007/08 2008/09

MDAs 35 46 11 5 3 1 49 52

RAS 14 18 7 2 - 1 21 21

Emba-ssies/Missions

22 27 8 4 2 1 32 32

Total 71 91 26 11 5 3 102 105

% age 70% 86% 26% 11% 5% 3% 100% 100%

The tabulated information above is shown on the following histogram:-

Trend of Opinion issued

05

101520253035404550

Unqualified Qualified Adverse

Type of Opinion

% a

ge

MDAs

RAS

Embassies/Missions


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From the table and histogram above, it can be analysed as follows:- Unqualified Opinion MDAs Of 52 MDAs audited in F/Y 2008/2009, 46 (88%) were awarded Unqualified opinion as compared with the F/Y 2007/2008 whereas out of 51 MDAs, audited 35 (71%) were awarded Unqualified opinion.

RAS Out of 21 RAS audited in F/Y 2008/2009, 18 (85%) were awarded unqualified opinion, whereas in the F/Y 2007/2008, out of 21 RAS audited, 14 RAS (67%) were awarded Unqualified Opinion. Qualified Opinion MDAs Out of 52 MDAs audited in F/Y 2008/2009, 5 (9%) were awarded qualified opinions whereas in the F/Y 2007/2008 out of 49 MDAs audited 11 (22%) were awarded Qualified opinions.

RAS Out of 21 RAS audited in F/Y 2008/2009 two (2) (9%) was awarded qualified opinion whereas in the F/Y 2007/2008 of 21 RAS audited 7 (33%) have been awarded Qualified opinions.

Adverse Opinion During the year under review, out of 52 MDAs three (3) (6%) Adverse Opinions were issued to MDAs/RAS/Embassies. In the F/Y 2007/2008 out of 49 MDAs audited 5 (10%) were awarded Adverse opinion.


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Embassies/Missions Out of 32 Embassies/Missions audited, four (4) (12.5%) were awarded qualified opinions whereas in the F/Y 2007/2008 of 32 Embassies/Missions audited eight (8) (25%) were awarded Qualified opinions We can conclude as follows: • There has been an increase in unqualified opinions from

73% in the F/Y 2007/2008 to 88% in the F/Y 2008/2009. • There has been a decrease in Qualified opinions issued

to MDAs/RAS/Embassies from 26% in the F/Y 2007/2008 to 9% in the F/Y 2008/2009.

• There has been an increase in Adverse Opinions issued

to MDAs/RAS/Embassies from one (1) (1%) in the F/Y 2007/2008 to three (3%) in the F/Y 2008/2009.


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CHAPTER 3

PRESENTATION AND ANALYSIS OF AUDIT RESULTS

3.0 Introduction

This chapter, analyses the grounds which gave rise to issuance of a particular type of opinion to a vote. The analysis is aimed at amplifying the basic criteria used in forming the opinions as discussed in the preceding chapter. A total of 52 MDAs and 21 RAS making a total of 73 MDA/RAS were audited in the 2008/2009 financial year with the following outcomes:-

3.1 Unqualified opinion without Emphasis of matters

A total of nine (9) MDAs/RAS out of the 73 MDAs/RAS audited this year managed to be issued with Unqualified Opinion without emphasis of matters ( See Anexuture II).

3.2 Unqualified opinions with Emphasis of matters

Out of the seventy three (73) MDAs and RAS audited, sixty three (63) or (86%) were issued with Unqualified Opinions with emphasis of matters.

3.3 Qualified Opinions

Seven (7) or (7%) of the 73 MDAs and RAS audited in the year in question were issued with Qualified Opinions.

3.4 Adverse Opinion

Two (2) or (3%) votes out of the 73 MDAs/RAS audited in the year in question performed badly and accordingly were issued with Adverse Opinions. These were the Ministry of Natural Resources and Tourism - Vote 69 and RAS-Lindi and Tanzania Embassy in Brussels.


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3.5 Disclaimer of opinion During the year under review, I did not encounter any haphazard situation limiting my audit scope to the extent of issuing a disclaimer of opinion. Therefore, as it has been with my three (3) years previous reports, there were no MDAs/RAS which were issued with the disclaimer of opinion statement.

The table below is a summary of the types of audit opinions issued to MDAS, RAS and Embassies/Missions on the financial statements for the year ended 30th June, 2009.

Details

Unquali-fied

without emphasis of matter

Unqua-lified With

Emphasis of

Matter

Qualified Adverse Disclaimer Total

MDAs 9 64 5 2 - 52

RAS - 18 2 1 - 21

Sub total 9 82 5 3 - 73

Embassies 5 22 5 - - 32

Grand Total 14 104 10 3 - 105

3.6 MDAs/RAS issued with Unqualified Opinion with Emphasis of Matters

The following are the details of Unqualified Opinion with Emphasis of Matter for individual Votes:

1. Vote 12-Judicial Service Commission There was no Annual Procurement Plan prepared for the

financial year under review contrary to the requirement of Sec.46 of PPA No.21 of 2004 and Reg.46 of GN.97 of 2005.

2. Vote 16-Attorney General’s Chambers • Undelivered 8 units of Toyota min Buses (Hiace)

ordered and paid for through the Tackling Corruption Project (TCP) Shs.455,043,200.


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The position of outstanding items as at 30th

June 2009 shows un-presented cheques of Shs.919, 368,874.38 for the Development Vote Account. • Unretired safari imprests Shs.13,231,692.

3. Vote 21-Treasury • There was no Competitive bidding in respect of the

fifty six Mercedes Benz and seven Mini Buses Treasury hired from M/s Walpha Tours & Safari Ltd at a total cost of Shs.148,836,000.

• A sum of Shs.205,000,000 was paid to CAMARTEC vide

P.V. No. 2353/6 dated 29/6/2009 as terminal benefits for ex- CAMARTEC workers for the period of 1994-2005. Supporting debt analysis showed a total debt amounting to Shs.202,520,595.23 contradicting with the amount paid by the Treasury of Shs.205,000,000 resulting to an overpayment of Shs.2,479,405.

• A sum TShs.2,845,637,096 was overpaid to M/s

Pensions Properties Limited (PPL) as costs of construction of the new Parliamentary debating chamber in Dodoma as accrued interest for delayed payment.

• We noted that the approved estimates figure were

reported differently in the statement of vote account and the summary appropriation accounts on recurrent expenditure resulting into a difference of Shs.2,225,743,998.

• A scrutiny made on the Treasury Registrar’s

Statements revealed that a sum of Shs.100,031,780,821.92 was guaranteed by the Government and loaned to the Higher Education Student's Loans Board (HESLB), and TFC. We noted


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that HESLB has not paid its loan despite the allocated budget of 21.0 billion for that purpose. On the other hand, TFC, a private institution defaulted repaying the loan on explanations of existing economic crisis.

• We noted that the Bank of Tanzania (BoT) as the

Government agent issued indirect guarantees under the following schemes; Small & Medium Enterprise – Credit Guarantee Scheme (SME - CGS), Export Credit Guarantee Scheme (ECGS) and Development Finance Guarantee Fund (DFGF). However, the Treasury has not given the status of recoveries of guarantees amounting to Shs.35,150,499,675 which had expired as on 30th June 2009.

• A review of the Treasury Registrar’s Statement of

public investment revealed that there are no Share Certificates to confirm ownership of the Government through the Treasury Registrar (TR).

4. Vote 23 - Accountant General’s Department

• Outstanding items in the bank reconciliation statements;

• Incorrect position of Deposit Account reported.

5. Vote 26 - Vice President’s Office

• Fuel worth Shs.40,851,000 intended to be used in the Vice President’s office in Zanzibar for the year 2008/2009 apparently could not be confirmed to have been accounted for and utilized.

• Outstanding liabilities amounting to Shs.876,757,292

were not yet settled

6. Vote 27: Registrar of Political Parties • Subsistence allowance amounting to Shs.16,785,000

was wrongly paid to an officer while attending a short course in Swaziland for 30 days.


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• Imprest amounting to Shs.11,505,000 issued to various staff of the Office of the Registrar of Political Parties to meet various expenses as indicated in the payment vouchers were not retired. Also, no imprest registers were maintained to record issues and retirement particulars of each imprest holder.

• Un-presented cheques amounting to Shs.47,303,600

relating to the Development Vote Account were not cleared as at 30th June 2009.

• A sum of Shs.30,908,179 was paid to a contractor in

respect of construction works at Dodoma Office using single source procurement method without being approved by the Tender Board.

7. Vote 28 - Police Force Department

• A sum of Tshs.91,747,706 receipted in the PMG’s

statement has no corresponding debit in the Police Force cash book.

• Total amount of Shs.2,842,196,608 was categorized

as Cheques drawn in favour of various payees which were not presented to the Bank as at 30/8/2009. Up to December, 2009 all cheques had been cleared except cheques worth Shs.78,669,300 which have become stale.

• A sum of Tshs.19,585,288.87 was categorized as

payment in the PMG’s statement without corresponding credit in the Police Force Department cash book.

• A sum of Tshs.245,376,758 was categorized as

receipt in cash book without corresponding credit in the PMG’s statement

• A sum of Tshs.244, 954,420 was made to various


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suppliers. The payments were for the F/Y 2006/2007 to 2007/2008, and other payments relating to previous financial year of 2004/2005 were incurred in the financial year 2008/2009 contrary to Reg. 85 (3) PFR of 2001 (revised 2004).

• Non-delivery of an ambulance and cesspit emptier

all valued at Shs.285,643,205.

• The financial statements of the Police Force Department reflected Shs.25,379,051,308 being total outstanding liabilities and commitments (recurrent and development) comprised of Liabilities Shs.23,354,127,853 and Commitments Shs.2,024,923,455

8. Vote 29 - Prisons Service Department

• No police report and court judgment on motor vehicle

involved in a road accident and repaired for Shs.15,311,376

• No compensation was paid in respect of a motor

vehicle and spare parts worth Shs.55,600,000 • Stores not taken on ledger charge Shs.3,000,000 • Seven motor vehicles and two cycles bought but not

delivered Shs.764,322,637 • Payments made without supporting documents

Shs.44,273,000 • Irregular transfer of funds to meet commitment

expenses Shs.800,000,000 • Outstanding items in the Bank Reconciliation

Statement


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• Receipts in bank statement not in Cash book Shs.9,360,434

• Receipts in cash book not in bank statement

Shs.6,778,330 • Wrong debt in bank statement Shs.8,105,303.60

9. Vote 32 - President’s Office - Public Service Management

• Deferred payments amounting to Shs.39,392,188 were

included in the financial statements under review contrary to Reg 85(3) of the Public Finance Regulations, 2001 (revised 2004. This amount was not included in the previous year’s financial statements as outstanding liabilities.

• Payments adding to Shs.13,299,400 were made to one

officer as 30% housing allowance but records show that the same officer was allocated a Government Quarter. This implies that the internal check mechanisms are weak as this payment is against Standing Order No. M.11 (a) and (b) which governs the procedures and terms of allocation of Government Quarters to entitled officers.

• An amount of Shs.282,453,350 was used to meet full

hotel accommodation costs in favour of officials who had been paid their full per diem allowances according to their entitlements which amounts to double payment.

• Imprests adding to Shs.492,428,684 had not been

retired as at 30th November, 2009; contrary to Reg 100(1) of the PFR 2001(revised 2004).

• Expenditure worth Shs.705,835,456 had no adequate

supporting documents.


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10. Vote 34 - Ministry of Foreign Affairs and International Cooperation

• Procurements worth Shs.57,815,400 were made before

the award of the Contracts, contrary to Sect.31(1) (a) and (b) of the Public Procurement Act 2004

• Nine Tenders were awarded before Signing the Procurement Contracts; a delay of signing contracts may lead to a situation where a Ministry cannot legally bind the suppliers of the services or goods being procured

• Procurements amounting to Shs.103,060,000 were made

out of the Annual Procurement plan, thus the Ministry might not be in a position of ensuring optimal procurement.

• The Ministry spent USD 151,000 to rehabilitate

chancery building purchased for USD 10,500,000 at Washington DC. According to the appointed team, there was no need of rehabilitation as the building was in order and adequately partitioned.

• Statement of Plant, Property and Equipment

submitted along with the accounts revealed items worth Shs.1,338,639,292 which were not properly supported.

11. Vote 38 - Defense Forces (TPDF) – NGOME

• Payment vouchers worth Shs.58,492,728 pertaining to the Supply Vote Account could not be made available for audit scrutiny.

• Payments amounting to Shs.1,566,968,978 were

made to various suppliers of goods and services and to various institutions without adequate supporting documents.


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• Examination of payment vouchers noted that a total of Shs.31,845,119 was spent under medical treatment abroad item. However, the accountability of the funds transferred were missing such as acknowledgement receipts, medical bills, invoices and statement of expenditure from the respective hospitals abroad.

• Results of audit test checks revealed various imprest

payments amounting to Shs.14,314,500 that were not retired by 30th June 2009, contrary to Reg.103 (2) (3) of the Public Finance Regulations of 2001 (revised 2004).

• Payments totaling Shs.86,791,628 were made in

advance during the year under review to various suppliers of goods and services on the strength of proforma Invoices.

12. Vote 39 - National Service

• The National Service incurred a total expenditure of Shs.103,534,922 on motor vehicles maintenance against Reg No. 59 of PPR of 2005 and its First Schedule.

• An amount of Shs.96,780,000 was paid as ration allowance to National Service staff but was not supported by signed pay lists.

• The amount of Shs.20,000,000 was paid to Kawawa Secondary School for drilling water borehole on 20th April, 2009. On 19th October, 2009 during audit visit, the work had not been completed

• Various payments amounting to Shs.252,614,385 were not adequately supported contrary to Reg. 95 (4) of the Public Finance Regulations of 2001 (revised 2004)

• Procurements made contrary to the requirements of Section 59 (1) of the Public Procurement Act No. 21 of 2004 amounted to Shs.553,296,000.


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• Goods purchased but not accounted for in the stores ledger contrary to the requirements of Reg. 198 of the Public Finance Regulation of 2001 (revised, 2004) amounted to Shs.80,289,000.

13. Vote 40 – Judiciary

• The figure for cash book balance appearing in the financial statements and the consolidated cash book differed by Shs.35,736,810

• The figures of actual expenditure appearing in the

appropriation account and statement of vote account differed by Sh.92,055,064

• Revenue amounting to Shs.15,867,578 was not banked. • Payments amounting to Shs.572,951,003 made to

various suppliers of goods and services were not supported by proper documents.

• Imprest amounting to Sh.69,000,000 remained

outstanding as at the report date. • Management have not responded to previous years

matters amounting to Shs.4,367,155,734 • Payments of Shs.2,491,719,184.70 were made to

Permanent Secretary Ministry of Infrastructure Development for purchase of 78 motorcycles and 14 motor vehicles. However, the motor vehicles had not been delivered up to the time of writing this report.

• Stores worth Tshs.10,265,002 purchased during the

year were not taken on ledger charge. • Inventory/stock valued Shs.360,450,000 disclosed in

the financial statements were not supported by stock taking sheets.


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• Judiciary management did not maintain an updated assets register. Therefore, the actual assets owned and respective values could not be ascertained.

14. Vote 41- Ministry of Constitutional Affairs and Justice

• Extraordinary repairs to Toyota L/C Shs.28,882,500

• Deferred payments in respect of the costs of air

tickets Shs.22,329,449. • Overstatement of Fixed Assets arising from the

treatment of transfers of Shs.1,502,772,135.31 as expenditure

• 4 units of Toyota Land Cruiser Gx 200 worth Shs.485,040,089 procured from M/s Toyota Tanzania Ltd through the Ministry of Infrastructure Development had not been delivered.

15. Vote 42 - National Assembly

• Total value of outstanding matters of previous years amounted to Shs.1,219,080,641.

• There were outstanding special imprests totaling

Shs.86,763,367 granted to various officials for various activities performed during the financial year 2008/2009.

• Liabilities and commitments as at 30th June, 2009 amounted to Shs.828,522,367.

• Payments amounting to Shs.115,772,390 were made without relevant supporting documents contrary to Reg. 95 (4) of the Public Finance Regulation, 2001 (revised 2004).

• A total of 130 contract payments involving a sum of shs.48,719,843 were questionable because they lacked sufficient evidence.


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• Payments amounting to Shs.5,500,000 were paid as loan and advance to Members of Parliament but no recoveries have been made

• Payments amounting to Shs.1,964,059 were paid

by the bank but not reflected in the cash book.

• There were unpresented cheques amounting to Shs.2,917,107,082 out of which cheques worth Shs. 40,689,428 remained unpresented for more than six months hence became stale

• Office generator worth Shs.116,660,000 purchased

in 2004 was not in use

• Inventory list cards in office rooms were not updated.

• Tender Board approval was not obtained for contract variations amounting to Shs.144,943,820.

16. Vote 44 – Industry, Trade and Marketing • The Vote Control Register was not maintained as per

Reg. 91 (2) of PFR 2001 (revised 2004) to show all the liabilities incurred during the year.

• Doubtful renovation of Pavilion Hall Shs.44,251,631

17. Vote 46-Ministry of Education and Vocational Training • The financial statements disclosed arrears of revenue

amounting to Shs.1,207,376,154 which needs serious efforts to ensure immediate collection.

• There was questionable revenue collection from

government Houses/ quarters amounting to Shs.64,540,348 due to lack of list of houses, names of staff living in those houses and rates charged per month.


27

• Revenue amounting to Shs.45,776,500 was not banked contrary to Reg. 78(1) of PFA, 2001 (revised 2004)

• Payments of Shs.385,350,000 were made without being sufficiently supported by proper documents contrary to Regulations 86(1) of the PFA 2001 (revised 2004). Under the circumstance, the authenticity and regularity of the expenditure incurred could not be established.

• Allowances totaling Shs.156,678,954 were charged to other expenditure codes without any application for reallocation and virement within vote or sub votes contrary to Reg. 51 of the PFR, 2001 (revised 2004)

• Payments totaling Shs.3,171,388 relating to the previous financial years were paid in the financial year under review, contrary to Reg 54 (4), of the Public Finance Regulations 2001 (revised 2004).

• A sum of Shs.65,302,000 paid to students who came from poor families could not be verified due to absence of duly signed pay lists from the respective schools.

• Imprests amounting to Shs.251,307,878 could not be retired within the required dates contrary to Reg 103 (1).of the PFR No. 6 of 2001 (revised 2004).

• The statement of losses for the year ended 30th June 2009 indicates that losses of cash and stores amounting to Shs.161,149,175 were not yet finalised.

• The Ministry procured services valued at Shs.291,957,680 which were not provided for in the annual procurement plan.

• Goods worth Shs.138,611,850 ordered and paid for were not recorded in the ledger, thus its utilisation could not be confirmed.


28

• The Ministry transferred a total sum of Shs.3,660,828,875 from Supply Vote to Education Planning and Rehabilitation Projects and other Departments for procurement of goods and services but the annual procurement plan and annual procurement report showed that the above goods and services were not purchased in 2008/2009 due to lack of funds.

18. Vote 48 - Ministry of Lands and Human Settlement

• Uncollected revenue from sale of plots sold at Kurasini Shs.1,154,000,000.

• Imprests amounting to Shs.17,958,192 were still

outstanding at the year end. • There were unpaid and underpayments of fines

amounting to Shs.192,400,000 and Shs.14,740,000 respectively from land occupiers who changed the use of the Land without approval from the Commissioner for Lands.

19. Vote 49 - Ministry of Water and Irrigation

• Financial statements in respect of Rwegarulira Water Resources Institute Special Account for the year ended 30th June, 2009 was not prepared and submitted for audit purposes.

• Outstanding matters amounting to

Shs.2,175,945,608 remained uncleared at the year end.

• Fuel worth Shs.42,200,000 was not confirmed to have been recorded in the ledger and utilized for the purpose intended.

• Revenue collections aggregating to Shs.17,451,960

from A/C 14.62 and A/C 2001100078 were not promptly banked.


29

• Liabilities amounting to Shs.493,301,007 were still outstanding since they have not been settled.

20. Vote 50 - Ministry of Finance and Economic Affairs

• There are 21 outstanding matters relating to the year 2001/2 to 2007/8.

• There were under releases of funds on Development Vote Account by Shs 58,424,962,106 equivalent to 74% of the budget implying that the related activities were not implemented.

• The government payroll system included errors which caused loss to the government through ineligible payment of salaries.

• Payment for advertising costs amounting to Shs.1,237,085,583 were related to previous year thus the procurement law was not observed.

• Procurement of computer sheets worth Shs.163,065,600 was made without observing procurement regulations.

• Procurement worth Shs.1,600,000,000 was made at the year end apparently to avoid the surrender of cash to the Consolidated Fund.

• Procurement of Motor Vehicle was not confirmed to have been delivered Shs.46,460,000.

21. Vote 52 - Ministry of Health and Social Welfare

• Payments amounting to Shs.156,976,512 were lacking supporting documents contrary to Reg No. 95(4) of the Public Finance Regulations, 2001(revised 2004).

• Imprests amounting to Shs.312,751,754 issued to various officials were still outstanding contrary to Reg. 103 of the Public Finance Regulations, 2001(revised 2004).


30

• A sum of Shs.77,707,817 was paid to retirees, deceased and absconded employees which is unprocedural and would result into nugatory expenditure of public funds.

• There were unreconciled items which were not

cleared for a number of years. Some of them were outstanding since year 2000.

22. Vote 53- Ministry of Community Development, Gender

and Children • Delay in the construction of the Office Block.

• Deferred payments amounting to Shs.29,680,246. • Funds borrowed from the Women Development Fund

Account not refunded Shs.234,780,161.

23. Vote 55 - Commission for Human Rights and Good Governance

There were unpaid rent arrears amounting to Shs.49,912,122.95. The matter should be followed up with the National Housing Corporation (NHC).

24. Vote 56 – Prime Minister’s Office - Regional

Administration and Local Government (PMO-RALG) • There was significant variation of figures reported in

the statement of fixed assets and its schedule valued at TShs.25,395,956,874.

• There was unexplained difference of Shs.163,829,157

between the books of accounts kept by the Ministry of Finance and Economic Affairs and the balance reflected in the financial statements of PMO – RALG.

• The Ministry of Finance and Economic Affairs sent a

total of Tshs.15,045,513,000 direct to the


31

Projects/Councils without the knowledge of PMO- RALG which act has made the PMO - RALG fail to make follow up on the proper use of the funds.

• TShs.41,717,754 was not reported in the financial

statements but was paid in the financial year 2008/2009 without retrospective approval from the Treasury.

• A sum of TShs.25,468,729 borrowed from the Road

Fund Account was not reimbursed.

25. Vote 57 - Ministry of Defence and National Service • There were improperly vouched expenditure

amounting to shs.853,651,480.

• The Statement of physical performance of the Ministry showed 100% implementation of target of improvement of capability of the armed forces under the department of Military Research and Development. However, this performance could not be verified due to lack of project’s progress reports.

• An amount of TShs.105,128,000 was paid to various

suppliers for supply of goods, equipment and services without proper procurement procedures.

26. Vote 58-Ministry of Energy and Minerals

• Contrary to Reg. 57(1) of the PFR 2001 (revised

2004), the Statement of Arrears of Revenue showed outstanding amount of Shs.503,414,421 in respect of rent on mining.

• There were outstanding salaries in arrears amounting

to Shs.60,497,934


32

27. Vote 59- Law Reform Commission • Contrary to Reg. 78 (1) of the Public Finance

Regulations, 2001 (revised 2004) amounting to Shs.1,400,000 was not banked immediately.

• Imprests amounting to Shs.5,744,050 issued to Officers of the Commission for conducting various activities were not retired

28. Vote 61 - National Electoral Commission

• The Commission has outstanding liabilities of

Shs.1,666,449,450 in respect of suppliers of goods, services and staff claims.

29. Vote 65 - Ministry of Labour, Employment and Youth

Development

• Recurrent expenditure amounting to Shs.67,510,334 were not supported by application letter/ minute sheets, transportation cost of goods, hotel charges and travelling cost

• A sum of Shs.51,300,000/= was paid to the Contractor M/S Kasiga Enterprises Ltd without any security as required by clause 30 of Section II of instruction to tenderers.

• Contract agreement for Shs.342,720,804 for building an office block was entered into without paying 10% performance security bond worth shs.34,272,080.4.

30. Vote 66 - Presidents Office, Planning Commission

• There were outstanding liabilities amounting to Shs.19,854,848.00 as at the year end.


33

31. Vote 90 – Land Court • A difference of Shs.3,580,000 was unreconciled from

the statement of cash receipt and payments/transfers whereby actual amount collected was Shs.41,550,000 as against the amount of Shs.37,970,000 transferred to the Paymaster General Account.

• A total amount of Shs.14,508,800 was paid to various

suppliers of goods and services during the year under review. However, the procurements were noted to have been made without Tender Board approval, procurement agreements, three quotations and contract agreements contrary to Reg.68 of the Public Procurement Regulations 2005.

32 Vote 92 – Tanzania Commission for Aids

• Imprests amounting to Shs.14,235,000.00 issued to

various staff of the Office of the Tanzania Commission for AIDS were not retired and imprest register was not maintained to record issues and retirement particulars of each imprest holder.

• A fixed assets register which indicates the description

of the assets, identification number, location and the condition of the assets held by TACAIDs was not maintained.

33 Vote 94- President’s Office - Public Service Commission

• The financial statements reflected outstanding

liabilities of Shs.107,300,216 as at year end. However, verification noted that the outstanding liabilities as at that date were Shs.65,063,673 only.

• A procured motor vehicle worth Tshs.47,376,069 had

not been delivered to the Ministry.


34

• Completion certificate and final reports on consultancy services of Shs.134,770,000 were not furnished to audit for verification.

34. Vote 96 - Ministry of Information, Culture and Sports • The Statement of outstanding liabilities included an

amount of Shs.92,585,819 without detailed analysis and supporting documents. Therefore, the correctness of this amount could not be validated.

• The statement of arrears of revenue included

unsupported figure of Shs.67,108,000 . As a result, the correctness and clearance of this amount could not be confirmed.

• There are weaknesses in revenue collection since

revenue payable to the Ministry from stadium gate collections of Shs.15,768,625 was retained and spent without approval of the Accounting Officer.

• There were recoverable salaries amounting to

Shs.1,852,900 paid into an absconder’s bank account for a period of seven months without management detection. This signifies that the internal check mechanisms over payroll are weak and therefore there is an urgent need of streamlining the system.

• Monthly Tender Board reports were not prepared

during the year 2008/2009 as required by Sect 35 (o) of PPA No.21 of 2004.

• Management of the Ministry did not implement its

annual procurement plan as intended. • Fuel bought for Shs.71,001,205 was not taken on

ledger charge contrary to Reg 220 (I) of the PFR 2001 (Part XIV) (revised 2004). This lapse may lead to the fuel being misused without management’s detection.


35

35. Vote 97- Ministry of East African Cooperation • Payments amounting to Shs.12,546,000 were made

without proper supporting documents. This is contrary to Reg. 94 (5) of the Public Finance Regulations 2001 (revised 2004)

• The Ministry paid Shs.43,745,746 for repair and

maintenance of two vehicles which seems to be on the higher side.

• Payments amounting to Shs.58,461,200 in respect of

facilitation of implementation of the open performance review, design and development of the Ministry Database and consultancy services on the impact of the EAC Customs Union on Tanzania economy were made without contract agreements.

• The financial statements reflected an outstanding

commitment amounting to Shs.1,457,265,250 out of which Shs.1,353,983,850 or 93% pertaining to statutory contribution due to East African Community which need to be settled without further delay.

36. Vote 98 - Ministry of Infrastructure Development

• Unauthorized expenditure of Shs.8,466,000 • There was a commitment of Shs.178,596,360,000 in

respect of road construction whose settlement depended on the availability of funds to be set aside to serve the purpose.

37. Vote 99 - Ministry of Livestock Development and

Fisheries • There were outstanding issues on contract No.

RTB/MBY/R170/11/94 involving a sum of


36

Shs.78,000,000 for supply and installation of 1 set of milking machine for 10 cows which is not yet installed at Kitulo Livestock Multiplication Unit.

• Salaries of Shs.2, 566,802,422; though budgeted and

accounted for under vote 99, were actually paid under vote 63 which the Accounting Officer has no direct control. According to the reply from Treasury, this incidence was referred to as technical error but there is a need for the Accounting Officer to follow-up closely since there is a high risk of errors or fraud going undetected.

• The Accounting Officer has not yet established Risk

Management Policy that would facilitate to create awareness and establish risk minimization strategies and disaster recovery plans.

• Emergency procurements of Shs.348,028,226 were not supported by retrospective approval from the Paymaster General contrary to Reg.42(c) of the G.N No. 97 of PPR 2005.

38. Vote 70 – Arusha Regional Administrative Secretariat

• The annual performance evaluation report on

procurements made during the year was not prepared contrary to Sect 26 (4) of the PPA of 2004.

• A sum of Shs. 47,798,500 was paid to the Permanent

Secretary, Ministry of Infrastructure Development for the purchase of one vehicle (Toyota Hilux Double Cabin). However, the vehicles was not delivered.

• Salary deductions of 365 employees were made in

excess of the authorized gross salary ceiling prescribed by the President’s Office – Public Service Management.


37

• Audit of the computerized payroll data from the Treasury noted twenty six (26) Arusha Regional staff having more than one different salary check numbers, which may have resulted to double payment of salaries.

• Payment vouchers not submitted for audit

Shs.2,549,088.65 • Improperly vouched expenditure of shs.1,627,532 • There were unclaimed salaries not refunded to

Treasury Shs.904,405.69 • Unspent balance of Shs.253,156,540 in respect of

various projects transferred to Deposit Account without authority from Treasury.

39. Vote 71 - Coast Regional Administrative Secretariat

• Stores not recorded in the ledger Shs.3,001,440 • Payments not supported by acknowledgement

receipts Shs.103,028,571 • Variation orders not referred to the tender board for

deliberation and approval Shs.31,350,977 • Contracts missing performance bond - Shs.49,460,312 • Contract sum overstated by Shs.21,195,391 • Retention money not transferred to Miscellaneous

Deposit account Shs.7,821,619

40. Vote 72 – Dodoma Regional Administrative Secretariat • Payments amounting to Shs.9,002,000 were made

without proper supporting documents, contrary to


38

Reg. 95 (1) and (4) of the Public Finance Regulations 2001 which requires all disbursements of public monies to be properly vouched.

• Receipt books issued to various revenue collectors

were not produced for audit hence we could not ascertain the accountability of the funds collected.

• Verification of Exchequer Receipts Vouchers kept by

the RMO revealed un banking of revenue totaling Shs.5,578,200.

• Payments amounting to Shs.4,585,000 paid to various

payees in respect of procurement of various items based on one quotation, contrary to Reg. no 68(4) of the Public Procurement Regulations of 2005

41. Vote 73 – Iringa Regional Administrative Secretariat

• Salaries aggregating to Shs.4,336,095 were paid to

staff who are no longer in service. • Expenditure amounting to Shs.18,256,984 was not

supported by adequate supporting documents. Advance payment amounting to TShs.16, 500,000 was made to M/S TANESCO and Iringa Urban Water Authority for electricity and water bills respectively. The payment did not comply with the Public Finance Regulations of 2001 Reg.85(1-3).

42. Vote 75 - Kilimanjaro Regional Administrative

Secretariat • The Regional Secretariat paid a contractor a sum of

Shs.8,285,142.26 over and above the agreed contract sum for construction of the DC’s residential house Phase II at Bomang’ombe.

• The Secretariat irregularly altered the contract price


39

from Shs.18,500,000 to Shs.16,538,000 and later on to Shs.20,000,000 without an approved addendum.

43. Vote 77 – Mara Regional Administrative Secretariat

• Payments totaling Shs.21,384,120 were charged to

wrong expenditure codes 44. Vote 78 – Mbeya Regional Administrative Secretariat

• Construction of a mortuary building and incinerator

costing Shs.33,255,301.00 had not yet been started. • A sum of Shs.38,350,000 was paid to M/s Tema

General Traders for supplying and installation of 13 Horse reel at Regional and Districts Commissioners Offices without prior approval of the Tender Board.

• Projects worth Shs.1,417,675,683 were implemented

up to the completion stage but had not been handed over to the owners/ beneficiaries.

• Two projects valued Shs.177,719,801 implemented

by Mbeya Regional Secretariat were partially completed.

• Contract works worth Shs.277,719,801 were delayed but no liquidated damages amounting to Shs.26.001,070 was imposed.

• Budget lines for the programme activities of Mbeya

Regional Secretariat exceeded actual spending by an amount of Shs.96,085,888.

45. Vote 79 – Morogoro Regional Administrative Secretariat

• Maintenance of Motor vehicles not routed through

TEMESA Shs.44,018,079 • Overpayment on procurement of Motor vehicles

Shs.5,257,420


40

• Procurement made through imprest Shs.12,400,000 • Contract alteration lacking prior Tender Board

approval Shs.41,603,100 • Liquidated damages not deducted Shs.59,886,810 • Payment of salaries to retired, deceased and

absconded employees Shs.6,499,334 • Expenditure charged to wrong account codes

Shs.8,520,420 • Unauthorized commitment and charges in the

accounts Shs.443,096,596 • Payment of certificates before the evaluation of work

Shs.400,727,410

46. Vote 80 - Mtwara Regional Administrative Secretariat • Construction works were still at an early stage despite

the fact that the contractor had been paid mobilization funds amounting to Shs.135,020,040 equivalent to 60% over and above the agreed 10% of the contract sum contrary to clause 54.1 of the special conditions to the contract resulting in recoverable cost overrun of Shs.112,516,700.

• Unclaimed salaries amounting to Shs.3,592,422.60

pertaining to retired and deceased employees were not surrendered to Treasury contrary to the requirement of Para (ii) of letter with Ref. No. EB/AG/5/03/01/VOL. VI/136 of 31st August 2007 issued by the Ministry of Finance and Economic Affairs.

47. Vote 81 - Mwanza Regional Administrative Secretariat

• The Mwanza Regional Administrative Secretariat

effected payments worth Shs.20,161,650 without supporting documents contrary to Reg. 95 (4) of the Public Finance Regulations of 2001, revised 2004.


41

• The non –tax revenue figure of shs.115,175,837 disclosed in the financial statements was understated by shs.8,037,653. The correct figure should read Shs.123, 213,490.

• The Mwanza Regional Secretariat did not prepare and

submit Bank Reconciliation Statements to the National Audit Office for all accounts (Recurrent, Development, Misc. Deposit and Revenue Accounts) for the whole of the financial year 2008/09 contrary to Reg. 162 of the Public Finance Regulation 162 of 2001 (revised 2004).

• A total amount of Shs.123, 213,490 collected and

banked to the a/c no.9921/14:81/01 Ministry of Finance and Economic Affairs by Mwanza Regional Administrative Secretariat. Audit verification has revealed that no receipts were issued by the Ministry of Finance and Economic Affairs in favour of Mwanza–RAS to acknowledge the amount.

48. Vote 82: Ruvuma Regional Administrative Secretariat

• Payments to suppliers amounting to Shs.11,396,679 for the purchase of goods and services were made before issuing LPO’S contrary to the requirements of Reg 70 (2)(g) of the Public Procurement Regulations 2005.

• A total of 4,967 litres of diesel worth Shs. 7,450,500 were issued without approval of the officer authorizing them contrary to Reg 276 (2) of PFR,2001.

• Payments totaling Shs.10,746,740 were not supported by expenditure particulars such as invoices, delivery notes, cash sales, pay sheets and attendance sheets.

• Retention money amounting to Shs. 5,048,000 deducted from different contractors and kept in the deposit account was spent for recurrent nature without being refunded to the respective account.


42

49. Vote 83- Shinyanga Regional Administrative Secretariat • There were outstanding matters valued Shs.69,327,233

from previous year’s audit.

• There were outstanding liabilities and commitments amounting to Shs.121,116,740 at year end.

• There was an overpayment of salaries amounting to

Shs.12,682,010 made to the Regional Secretariat employees under Sub-Vote 3001 (Health Department) contrary to establishment Circular No. 2 of 2008.

• Payment of Shs.2,100,000 was made without being

sufficiently supported by proper documents contrary to Reg. 86(1) of the PFA 2001 (revised 2004).

• A part payment of Shs.47,612,600 was made for

purchasing one Toyota Land Cruiser – Ambulance. However, up to the time of writing this report (December, 2009) the remaining balance of amount of Shs.17,387,400 had not been paid to enable delivery of the motor vehicle.

50. Vote 84 – Singida Regional Administrative Secretariat

• Payments aggregating to Shs.3,625,558 relating to

previous years were made during the year without prior approval of Treasury contrary to Reg. 85(3) of Public Finance Regulations 2001 (revised 2004).

• An amount of Shs.40,000,000 was paid to the Director

General of the Tanzania Building Agency being consultancy fees for construction of referral hospital. The same consultancy work appears to have also been awarded to Ardhi University hence suspected double payments.


43

51. Vote 85 – Tabora Regional Administrative Secretariat • The Secretariat management has not attended to 5

previous years audit observations with the total amount of Shs.748,245,785.

• Exchequer issues amounting to Shs.886,769,000 were

sent direct to the respective councils; as such the same were not recognised in the Secretariat’s financial statements.

• Payments amounting to Shs.8,320,000 were made

without being supported by proper documents, as such authenticity of the payments made could not be ascertained.

• Payment of Shs.67,523,300 was made from the deposit

account. Audit could not confirm lodgement on the deposits account for the amount spent.

• The Tabora Regional Secretariat had an outstanding

imprest of Shs.81,681,800 as at 30th June, 2009. The schedule of outstanding imprests were not prepared and accompanied with the financial statements.

• The amount of Shs.33,880,000 was paid in respect of procurement of four motorcycles. However, up to December 2009 the same were yet to be delivered to the Secretariat.

• Procurement amounting to Shs.181,504,746 were made in excess of the amount budgeted in a procurement plan since there was no involment of the Regional Tender Board.

• Contracts amounting to Shs.196,632,689 were not

supported by bills of quantities, as such we could not verify the activity performed against the bills of quantities.


44

• A project valued at Shs.294,168,240 was not completed on the due dates contrary to the contract agreements. Failure to complete works in time attracts liquidation damages from the contractors.

• The financial position shows consumable goods of

Shs.4,999,508,659 as at 30th June 2009. The inventory list supported by the report of board of survey was not compiled with the financial statements.

52. Vote 86 – Tanga Regional Administrative Secretariat • A sum of Shs.20,352,600 was made to various suppliers

for procurement of various items. However, there were no ledger folio references quoted for audit to verify accountability of the items procured.

• Examination of payment vouchers and the imprest

register revealed that, imprests amounting to Shs.96,360,541 were not retired as at year end, contrary to Reg. 103 of PFR 2001 (revised 2004). Included in this amount was Shs.32,666,041 paid from the development deposit account.

• Payments totalling Shs.47,492,220 made from the

deposit account were noted to have not been posted in the deposit account contrary to Reg No. 130 (b) the Public Finance Regulations of 2001.

• Inadequately supported payment vouchers for

Shs.16,642,000 were made for procurements of goods as such, validity of the expenditure made could not be established.

• The Appropriation accounts and statements of Vote

account for the year ended 30th June, 2009 reflected outstanding liabilities amounting to Shs.261,978,850. However, schedules to support these balances were not submitted.


45

• We noted payments amounting to Shs.39,283,115 in respect of the previous years paid during the year under audit contrary to Reg 85 (3) of the Public Finance Regulation.

53. Vote 87 – Kagera Regional Administrative Secretariat

• Payments totaling Shs.87,568,000 were not adequately

supported by proper documents. • Payments of salaries amounting to Shs.53,543,371.08

were not supported by computer payrolls printout.

• Imprests amounting to Shs.7,220,000 were not retired contrary to Reg.103 (1) of Public Finance Regulations of 2001 (revised 2004).

• A sum of Shs.120,000,000 was paid to Permanent Secretary- Ministry of Infrastructure Development for purchasing one (1) motor vehicle. However, the vehicle was not delivered

• Procurement of 8 lap top computers worth Shs.13,200,000 was made without approval of the Regional Secretariat Tender Board.

54. Vote 88 – Dar es salaam Regional Administrative Secretariat

• The Regional Administrative Secretariat has not

responded on outstanding matters from previous years audit amounting Shs.220,067,700.

• Procurement of goods and services worth Shs.52,380,387 were made without evidence of competitive bidding.

• Payments totaling Shs.45,203,932 were charged to

wrong expenditure account codes where no budgetary provision existed.


46

• Outstanding imprests totaling Shs.116,250,900 were not disclosed in the foot notes to the Appropriation Account contrary to PFA No.6 of 2001 Sect 25(4) (a).

• Bank Reconciliation Statements for Recurrent Revenue account as at 30thJune, 2009 was not prepared and submitted for audit purposes.

55. Vote 89 - Rukwa Regional Administrative Secretariat

• A total of 9,294 litres of fuel worth Shs.19,539,500

were not accounted for in the stores ledger. • A sum of Shs.52,941,598 out of Shs.89,104,598.64

was paid for the works which were not executed.

• Liquidated damages of Shs.4,851,250 were not deducted from the contractor for delaying to complete the contract for 49 days.

3.7 MDAs/RAS issued with Qualified Opinion

Below is the list of MDAs/RAS and Embassies/Missions issued with Qualified Opinion together with the reasons for such opinion.

1. Vote 14: The Fire and Rescue Force • M/s Kiareni Investment Ltd was paid Shs. 81,963,360

in respect of a contract for the proposed fencing works for Mbopo Kinondoni Fire and Rescue Force Training College at Bunju area in Dar es Salaam without a competitive bidding.

• Management of Fire and Rescue Force purchased and

paid for 30,000 concrete bricks worth Shs.31,115,000 from M/s Trevor Enterprises Ltd. Apparently, the bricks have since not been delivered.


47

• Management of Fire and Rescue Force paid Shs.22,040,000 to M/s Tanzania Portland Cement Co Ltd, Dar es Salaam for 130 tons of portland cement. Ever since, the cement ordered had not been supplied.

• Fire fighter motor vehicle worth Shs.705,197,958 had

not been delivered. • Iveco Bus with registration number STJ 9578 was

taken to M/s INCAR (T) Ltd in January, 2007 for general service at a cost of Shs.5,877,641.50. Ever since, the Bus has not yet been collected from M/s INCAR (T) Ltd.

• Nine government motor vehicles were issued on loan

without following proper procedures. • Nissan Lorry with registration No. STH 2266 had been

grounded and abandoned at the DSM airport area since the financial year 2003/2004.

• Note 11 of the Commentary on the Financial

Statements for the year ended 30th June 2009 showed outstanding liabilities for suppliers and employees were Shs.378,846,239. However, supporting schedules of these liabilities were not appended to the financial statements in order to facilitate for audit verification. Furthermore, financial statements reflected outstanding liabilities amounting to Shs.224,768,115.00 as at 30th June, 2009 the two figures had not been reconciled for the difference of Shs.154,078,124 and settled.

2. Vote 22 - The Public Debt and General Services

• A sum of Tshs.4,000,626,138 was paid to M/S Hotel

Travetine being payment for compensation following court judgement for civil case No. 350 of 2002,


48

following breach of contract by the Government, hence a nugatory expenditure.

• A guaranteed amount of Tshs.23,747,127,563 by the

Government on behalf of TANESCO was not paid by the firm and the government had to pay the amount. However, TANESCO is yet to refund the amount to the government as required by the Loans, Guarantees and Grants Act of 1974 (revised 2004).

• An amount of TShs.607,105,782.03 paid to Tanzania

Postal Bank over and above the initial verified total debt amount of Tshs.851,939,145.68 as interest which accrued from July, 2005 to December, 2007.

• The government converted the EPA debt

Tshs.135,745,070,485.23 into Government Stock to be paid (principal and interests) at an annual rate of Tshs.11.50 billion for a period of 20 years which in total will amount to Tshs.230 billion to maturity. There is no tangible returns to the public for this expenditure, hence a nugatory expenditure against public funds.

3. Vote 43 – Ministry of Agriculture, Food Security and

Cooperatives • The Ministry paid an amount of Shs. 94,763,744 to

suppliers of goods and services. These procurements were splitted into small amounts to pay for the same items

• Four heads of Departments procured goods above

their annual limit of Shs.20,000,000 as specified by the first schedule of the Public Procurement (goods, works, non-consultant services and disposal of public assets by tender) Regulation GN.97 of 2005.

• The Ministry paid an amount of Shs.52,398,189 to M/s

Bp Tanzania Ltd for the supply of 24,054 Litres of


49

Avgas fuel to be used in Aircraft during quelea birds and Red locusts control operations without records for reference.

• Ministry ordered 2,687,600 farmer’s input vouchers

with face value of Shs.87,684,600,000 at a cost of Shs.646,552,040 out of which vouchers with face value Shs. 18,633,000,000 costing Shs. 135,010,669 were not distributed.

• The Ministry overpaid Shs. 257,416,122 to M/s Smith &

Ouzman Ltd of UK for printing 2,350,000 input vouchers at a contract sum of UK £308,555 which is equivalent to Shs.674,192,675.

• An amount of Shs.26,002,090 was paid to suppliers of

goods and services. The transaction was for the financial year 2007/2008. contrary to PFR 85(3) of 2001(revised 2004).

• M/s Shivlal Tank and Company Limited was paid Shs.

719,544,950 for supply of 3,269 Metric Tons of Urea and DAP. The payments was over and above the agreed reimbursable cost of Shs.577,928,150 by Shs.141,616,800.

• The Ministry paid an amount of Shs.421,563,420 from

various Ministry Departments to Government Procurement Agency for fuel without records.

4. Vote 51: Home Affairs

• Payments of Shs.10,500,000 were made without

being sufficiently supported by proper documents.

• Interest for delayed payments in respect of certificate No. 6 to M/S Tanzania Buildings Agency Tshs.266,700,531

• Financial statements showed commitments outstanding as at 30th June 2009 as Shs.203,051,395.


50

Payment of these may adversely affect the implementation of the planned activities to be implemented in 2009/2010.

5. Vote 68 - Ministry of Communication, Science and Technology

• Difference in current transfers and subsidy’s account Shs.6,648,233,288.34. There was calculation errors that undercasted the current transfers and subsidy’s account by Tshs.6,648,233,288.34 in the financial statements.

• Un reliable Balances of Fixed Assets reported in the

financial statements valued TShs.4,216,184,067 There was un reliable information of non current assets valued Tshs.4,216,184,067 that caused significant variations in the financial statements.

• Understatement of Assets in the financial statements valued Tshs.142,531,000 The management omitted assets valued Tshs.142,531,000 in the fixed assets register.

• Double payment of management and commitment

fees TShs.1,014,344,100 and Shs.463,515,500 respectively in respect of ICT Backbone project.

• Un utilized funds in deposit account Shs.14,019,208

The management did not surrender to the PMG account amount retained in the deposit account for more than seven years valued Tshs.14,019,208

• Outstanding commitments Shs.16,050,122,000

The management produced a memorandum of understanding for payments to M/S TANESCO and TANROADs which had no contract prices.

• Retention money not deducted on the contract

price of TShs.43,983,360 The management did not


51

deduct retention money on the contract price of TShs. 43,983,360 Contrary to the contract agreement.

• Employment of local consultant without following

PPA Regulations shs.119,205,000 The Public Procurement Act was not observed on appointment of local consultants.

• Procurement made without competitive tendering Tshs.45,370,305 Procurement valued Tshs.45,370,305 was made without following competitive procedures.

• Improper classification of expenditure items

2,057,681,447 A total Tshs.2,057,681,447 was incorrectly charged to Consultancy services expenditure item contrary to section 19 (b) of Public Finance Act, 2001 [Revised, 2004]

• Unsupported expenditure of commitment fee and

TANESCO bills valued TShs.462,477,313 A total of TShs.462,477,313 was paid to M/S TANESCO without proper supporting documents.

6. Vote 93: Immigration Service Department

• Revenue collections expected from the Zanzibar

Immigration office amounting to Shs.3,083,580,051 were not remitted to Immigration Head Office – Dar es Salaam. Cumulatively the amount has risen to Shs.14,852,405,461 since March, 2000 when the Immigration Zanzibar Office stopped remitting the collected revenues to the Immigration Service Department’s head office.

• Revenue collections amounting to USD.75,580

equivalent to Shs.92,963,400 from Arusha Regional Immigration office were not reflected in the Bank


52

Statement which could strongly lead to suspicion of theft of these funds.

• Shs.42,505,000 collected during the month of May

2009 at Arusha Regional Immigration office was neither banked nor accounted for leading to very high suspicion of fraud.

• An amount of Shs.144,667,500 paid to the Permanent

Secretary Ministry of Infrastructure Development for purchase of a minibus, apparently, the minibus has not been delivered since June 2009.

7. Consolidated Accounts

• Non recognizing of an outstanding liability of TShs.

21,630,000,000; • Outstanding liabilities not supported by analysis of

goods and services TShs.52,774,221,360; • Difference between amount of exchequer issued and

amount reported in the financial statements TShs. 422,969,012,778;

• Non submission of the Deposit Account; • Non submission of foreign currencies transactions

Accounts; • Payments made above the approved budgets TShs.

68,016,337,333; • Under statement of the reported cash balances TShs.

8,501,629,017.93; • Overstatement of stores TShs.185,563,987,809.26.

8. Vote 74 – Kigoma Regional Administrative Secretariat • The Management has no good system of record

keeping and summarising financial data to permit preparation of comprehensive financial statements.


53

As a result, the financial statements for the year 2008/09 were revised and resubmitted after two months from the statutory submission date.

• The Audit Committee does not meet quarterly and the

RAS has not launched an Audit committee Charter.

• The RAS received a sum of Shs.3,758,072,817 in excess of the approved budget contrary to Sect. 19(1) a-c. of the Public Finance Act, 2001 (revised 2004).

• A sum of Shs.10,388,000 was spent on maintenance

and repair of motor vehicles without approval of TEMESA.

• The RAS has not established Risk Management Policy

that would help to mitigate possible loses that might result from possible disasters.

• A sum of Shs.23,432,900 was paid without proper

supporting documents contrary to Regulation 95(4) of the Public Finance Regulations of 2001(revised 2004).

• Contracted development activities worth

Shs.1,154,949,909 planned to be implemented during the year under review are still outstanding to-date. The failure was attributed to the inabilities of the contractors and poor supervision by the consultant.

9. Vote 95 - Manyara Regional Administrative Secretariat

• We noted that procurement of stores worth Shs.

57,620,226 were neither confirmed to have been recorded in the stores ledgers nor their utility particulars made available for audit purposes.

• Payments amounting to Shs.21,545,000 made to

various payees were not acknowledged by the bona


54

fide payees to confirm that they were actually received.

• Payments related to procurements of goods and

services of Shs.26,397,000 were made to the suppliers of goods and services on the strength of proforma invoices i.e. before they were received and inspected contrary to Regs. 191 and 192 of PFR, 2001 (revised 2004).

• Payments amounting to Shs.102,899,627 were made

to various payees without adequate supporting documents such as invoices, receipts, delivery notes, acknowledgement receipts, original receipted pay lists and expenditure analysis hence authenticity of the expenditure incurred could not be established.

• A test check disclosed that payment vouchers

amounting to Shs.30,541,464 reflected in the cash book were found missing from their respective batches.

• The Financial Statements disclosed a sum of Shs.

111,798,000 as outstanding imprests as at 30th June 2009 contrary to Reg 103 (1) of the PFR of 2004.

• A sum of Shs.146,550,272 was drawn from the recurrent expenditure account vide cheque No. 215200 and paid to the Permanent Secretary, Ministry of Infrastructure Development- Dar es Salaam for procurement of Toyota Land Cruiser 200 VX and one Toyota Coaster Min Bus. However, the motor vehicles were yet to be delivered.

• The Recurrent Account reflected a sum of Shs

6,550,161,004.73 as cash at the beginning of the year, while the Cash Flow Statement closed with Shs. 83,455,000 a difference of Shs.6,466,706,004.73.


55

These two statements should have reflected the same balance figure. Likewise, Shs.6,618,473,631.86 was reflected as cash at end of the period, but the cash book at the Sub-Treasury reflected the available balance as negative Shs.2,700,646.60 a difference of Shs.6,616,072,985.26. These differences were yet to be reconciled.

3.7 MDAs/RAS issued with Adverse Opinions

Here under are details of the MDAs/RAS and Embassies/Missions issued with Adverse Opinions together with matters leading to such Opinions:

1. Vote 69: Ministry of Natural Resources and Tourism

• Revenue retained at source amounting to

Shs.19,619,837,995 have not been accounted for and its relevant budget not provided for in the Ministry’s approved estimates.

• Outstanding revenue amounting to USD 46,000

remained uncollected from tour operators. • Value of impounded tusk’s was not disclosed in the

financial statements • Unclaimed salaries amounting to Shs.414,561,666

relating to retired, deceased and terminated employees were not returned to the Treasury.

• There were irregular payments of internet services

amounting to Shs.37,862,838 • Sao Hill plantation had no approved budget to support

expenditure of Shs.5,127,118,191 Also this expenditure is not reflected in the financial statements of the Ministry.


56

• Payments/transfers amounting to Shs.1,388,076,273 made by Sao Hill Plantation were not accounted for.

• Furniture and computers worth Shs.287,830,836 were

yet to be delivered by suppliers.

2. Vote 76 – Lindi Regional Administrative Secretariat • Goods worth Shs.195,497,497 ordered and paid

were not taken on ledger charge and utilization particulars were not submitted to audit

• Goods worth Shs.21,368,302 including Procurements of the standby Generator valued Shs.12,440,000 and corrugated iron sheets valued Shs.8,928,302 were procured without seeking competitive bidding from different suppliers of the goods prior to procurement thus violating the requirements of the PPA 2004.

• A sum of Shs.39,303,752 was paid to various suppliers for supplying various goods and services. Apparently, dates quoted on the Delivery notes, Tax Invoices and LPOs indicated that orders to procure the goods and services were lodged after the goods and services had been delivered and paid for.

• Payment vouchers and respective supporting documents amounting to Shs.154,676,931 to support activities conducted during the year were not submitted for audit purpose.

• Supporting documents including Tax Invoices, Delivery notes, Cash sales, Pay sheets and other related documents; of the reported expenditure valued Shs.672,529,243 were not made available. Only payment vouchers in support of these payments were available for our audit.

• Unclaimed salaries amounting Shs.25,298,174 relating to retires, absconders and diseased


57

employees deposited to RAS account as per Reg No.113(3) of the Public Finance Regulations of 2001 (revised 2004) and instructions from Treasury with Ref. No. EB/AG/5/03/01/Vol.VI/136 dated 31st August 2007 was neither transferred to Treasury nor reflected in the RAS account balance as at the year end.

• Payments worth Shs.4,300,000 had not been authorized by the authorizing officer and passed for payments.

• A sum of Shs.32,582,012 purported to be utilized

under the Health Sector Basket Fund in respect of perdiem – domestic, diesel and stationery suppliers were utilized in activities relating to repair and maintenance for two motor vehicles and purchase of office furniture for “SHIRIKISHO LA VYAMA VYA WALEMAVU (SHIVYAWATA).

• Construction works of maternity ward;

Shs.2,411,750 was paid twice to M/S Romenka Contractors

• Contract document for construction of fence wall at

Ruangwa District Commissioner’s residence for Shs.171,349,100 was not submitted for audit scrutiny.

• Recurrent and Development expenditure were

overstated by Shs.3,985,576,580 and Shs.2,356,244,928 respectively.

3. Tanzania Embassy in Brussels

• Revenue collected amounted to Euro 7,530 equivalent to TShs.13,259,963 was not banked

• Disagreement

The financial statements submitted were inaccurate and incomplete. As a result, the Ambassador could neither accept responsibility nor endorse them for presentation. The financial statements were not withdrawn for adjustments as recommended.


58


59

CHAPTER 4

PERFORMANCE REPORT ON SELECTED SECTORS This chapter highlights on the performance of four selected Ministries which have greater impact on social and economic life of the majority of Tanzanians. My evaluation of these sectors is based on the performance reports submitted to me by Permanent Secretaries of the respective Ministries.

4.1 Education Sector Recent years has seen the Government of URT at all levels giving high priority to the Primary and Secondary school education through continuous structural reforms by increasing the enrolment of students, expansion and modernization of buildings with a view to cope up with increasing number of school children.

During the audit, we examined and analysed information and data received from the Permanent Secretary Ministry of Education and Vocational Training which revealed the following position:

4.1.1 Pre-Primary Education

Pre-Primary enrolment increased from 638,561 (2005) to 896,146 pupils in 2009. The Gross Enrolment ratio (GER) rose from 29.5 (2005) to 39.3 in 2009 and Net Enrolment Ratio increased from 27.7 (2005) to 36.9 in 2008. In 2009, there was a slight decrease in NER by 24.4.

Table 1: Enrolment in Pre- Primary

Year 2005 2006 2007 2008 2009 Male 318,617 331,440 387,868 435,956 445,867 Female 319,974 337,697 407,143 438,025 450,279 Total 638,591 669,137 795,011 873,951 896,146 GER 29.1 28.5 35.2 38.1 39 NER 27.7 30.0 33.1 36.2 37

Source BEST 2009


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Histogram 1: Enrolment in Pre- Primary

ENROLMENT PRE-PRIMARY SCHOOL

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000,000

2005 2006 2007 2008 2009

Years

Pupi

ls MaleFemaleTotal

4.1.2 Primary Education

Primary Education enrolment increased from 7,541,208 pupils in the year 2005 to 8,441,853 pupils in the year 2009. The increase in enrolment was due to successful implementation of PEDP. Gross Enrolment Ratio (GER) rose from 109.9 in 2005 to 110.9 in 2009. Net Enrolment Ratio (NER) increased from 94.8 in 2005 to 97.3 in 2007 and slightly dropped to 95.9 in 2009. Table 2: Enrolment in Primary Schools

Year 2005 2006 2007 2008 2009 Male 3,855,712 4,051,676 4,215,171 4,261,831 4,248,764 Female 3,685,496 3,908,208 4,101,754 4,148,263 4,148,263 Total 7,541,208 7,95,9884 8,316,925 8,410,094 8,441,553 GER 109.5 112.7 114.4 112.3 110.5 NER 94.8 96.1 97.3 97.2 95.9

Source BEST 2009


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Histogram 2: Enrolment in Primary schools ENROLMENT IN PRIMARY SCHOOL

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

2005 2006 2007 2008 2009

Years

Pupi

ls MaleFemaleTotal

Primary schools on the other hand increased from 14,257 schools in 2005 to 15,727 schools in 2009. This is an increase of 9% as compared to the 2008 statistics.

Table 3: Number of Primary schools 2005 – 2009

Source Best 2009

Year 2005 2006 2007 2008 2009 Government 14,053 14,440 15,122 15,257 15,301 Non Government 204 260 324 416 426 Total 14,257 14,700 15,446 15,673 15,727


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Histogram 3: Number of Primary Schools in 2005 – 2009 NUMBER OF PRIMARY SCHOOLS 2005 - 2009

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

2005 2006 2007 2008 2009

Years

Num

ber o

f sch

ools

GovernmentNon Government

Further, the Ministry also reported on the number of teachers available as compared to the requirement. From 2005 to 2008, a total of 12,464 in service teachers of grade B/C upgraded their qualification to grade III A.

Table 4: number of teachers required and available in Primary schools 2005 – 2009

Year 2005 2006 2007 2008 2009

Teachers

Required 188,530 198,997 207,923 210,252 211,039

Teachers

Available

135,013 151,882 154,868 154,895 157,185

Number of teachers available and required can be presented in the form of a histogram as follows:


63

NUMBER OF TEACHERS REQUIRED AND AVAILABLE IN PRIMARY SCHOOLS 2005 - 2009

0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009

YEARS

TeachersRequiredTeachersAvailable

Secondary education Enrolment of form 1 – 6 students increased from 524,325 in 2005 to 1,466,402 in 2009 – reflecting an increase of 180 percent.

Table 5: Enrolment Trend in Form 1 – 6 (2005 – 2009) Year 2005 2006 2007 2008 2009 Male 279,754 358,128 543,196 679,124 812,945 Female 244,571 317,544 477,314 543,279 653,457 Total 524,325 675,672 1,020,510 1,222,403 1,466,402 GER 11.7 14.8 22.1 26.1 31.3 NER 10.1 13.1 20.6 23.5 27.8

Enrolment trend can be presented in the form of histogram as follows:


64

ENROLMENT IN FORM 1 - 6

0200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,000

2005 2006 2007 2008 2009

Years

Pupi

ls MaleFemaleTotal

In addition, the number of secondary schools increased significantly from 1,745 in 2005 to 4,102 in 2009 due to Community participation in construction of schools and Private Sector Partnership encouraged by the Government in the Education sector.

This is an increase of 57% as compared to 2005. Table 6: Numbers of Secondary Schools

Year 2005 2006 2007 2008 2009 Government 1,202 1,690 2,806 3,039 3,283 Non Government 543 599 679 759 819 Total 1,745 2,289 3,485 3,798 4,102

Source: BEST 2009

Number of Secondary schools can be presented in the Histogram as shown below:


65

NUMBER OF SECONDARY SCHOOL

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2005 2006 2007 2008 2009YEARS

Government

NonGovernmentTotal

Financing The increase in the budget expenditure on education as indicated below was higher in nominal terms. Apparently, both the Central Government, the Private Sector and Development Partners have given greater support. Refer to the table below: Table 7: Budget allocation to Education Sector, 2006/07 - 2008/09 Account Item 2006/07 2007/08 2008/09

Recurrent Expenditure

PE 65,015,563,200 97,882,450,000 153,487,300,000

OC 58,250,048,600 56,763,460,000 333,150,700,000

Total 123,265,611,800 154,645,910,000 486,638,000,000

Development Expenditure

Got 8,841,999,000 13,996,210,000 64,761,000,000

DP 122,687,530,200 78,730,220,000 648,748,000

Total 131,529,529,200 92,726,430,000 65,409,748,000

Grand Total 254,795,141,000 247,372,340,000 552,047,748,000


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Budget allocation to the Education Sector, 2006/07 - 2008/09

BUDGET ALLOCATED TO EDUCATION SECTOR

0

100,000,000,000

200,000,000,000

300,000,000,000

400,000,000,000

500,000,000,000

600,000,000,000

2006/07 2007/08 2008/09

Years

Am

ount

RecurrentbudgetDevelopmentbudget

Budget allocation to Education and Training as percentage of total budget by the Government has increased from 15.1% in 2005 to 19.8% in 2008/2009.

Major problems encountered during audit

(i) Inadequate budget allocation for Education Sector The analysis has indicated that inspite of the growth in budget of the Ministry, the funds allocated for education is peanut. For the years 2007/2008 and 2008/2009, out of the total budget for the Ministry of Education and Vocational Training of Shs.247,372,340,000 and Shs.552,047,748,000 respectively. This is only 18.1% and 19.8% of the above two years budgets respectively allocated for Education Sector.


67

(ii) Primary and Secondary Education tends to be debt – ridden.

In the financial years 2007/2008 and 2008/2009, the Ministry reported outstanding debts payable to the Secondary school teachers to the tune of Shs.26,075,448,333 respectively.

The debts comprised of promotion and leave claims/arrears, transfer costs etc.

Accumulation of salary arrears was common thoughout; not all such claims were found to be genuine.

In addition, after verification of Secondary school teachers claims, a total of 19,861 files out of 24,460 were verified and genuine claims in the tune of Shs.12,543,200,917 was settled by the Government whereas debts amounting to Shs.13,532,247,416 were found not genuine and therefore rejected. Aggrieved teachers have been given the opportunity to appeal.

(iv) Inadequate/shortage of teaching staff Data analysis has indicated that the ratio of number of teachers available to the number of students is unfavorable. Extract from the Ministry’s data revealed the following:

In 2008, enrolment of students for form 1 – 6 was 1,222,403 students while the number of teachers available was 3,798 (including non government schools). This gives a ratio of 1: 322 – meaning that one Secondary School teacher serves 322 students. This will adversely affect the quality of Education in our schools. In 2009, enrolment was 1,466,402 students compared to 4,102 teachers. The ratio of teachers to pupils is 1:357 indicating a more worse situation.


68

The standards ratio of teachers to pupils is 1:45 implying that the country’s teacher pupil ratio is 8 times more than the accepted norm.

4.2 Energy and Minerals 4.2.1 Performance of the Energy and Minerals Sector

The Ministry has persistently recorded under-performance on its Development budget for three years consecutively, apparently due to budget constraints. For the said period of three years (2006/2007 – 2008/2009), the Ministry has received less Exchequer Issues ranging between 9% to 19% of the total budget approved by Parliament. Budgetary allocation to the Ministry of Energy and Minerals for three years against the amount released by Treasury shows the following trend:-

Year Approved budget

(Shs) Exchequer release

(Shs) % of amount released Vs

approved budget 2006/07 229,306,758,053 33,099,250,195 14%

2007/08

312,409,585,000

28,645,148,000

9%

2008/09

243,058,819,210

45,336,238,883

19%


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APPROVED BUDGET Vs EXCHEQUER RELEASED

0

50,000,000,000

100,000,000,000

150,000,000,000

200,000,000,000

250,000,000,000

300,000,000,000

350,000,000,000

2006/07 2007/08 2008/09Years

Amou

nt Approved

budgetExchequerrelease

In view of the meager resources released to the Ministry of Energy and Minerals for the three years, the Development Votes’ performance saw a number of projects uncompleted, entailing the need for the governments’ intervention to reverse the ill trend. Apart from the inadequate budget released to the Ministry of Energy and Minerals, monthly fund allocations are not predictable; which creates uncertainties in as far as implementation of the action plan is concerned. This has been affecting negatively the execution of the Ministry’s tasks lined up for implementation in its plan each year. Consequent to the foregoing, the following projects were not implemented for the three years:

NO 2006/2007 2007/2008 2008/2009 1. Construction works

at Madini Institute Dodoma

Promotion of Renewable Energy in Tanzania

Sustainable Management of Mineral Resources

2. Renewable Energies

Rural Electrification

Support to Southern African Mineral Centre


70

3. Rural PV Market (Barrier removal

Rural Energy Services

Environmental Management Act Implementation support Programme

Oysterbay substation

Transformation of Rural Photovoltak (PV Market in Tanzania

KV Makambako Songea Power

Grid Upgrading and Expansion

Petroleum Subsection development

Off Grid Electrification

Rural Energy Agency and R.E. Fund

Oysterbay Substation

KV Makambako-Songea

Tegeta 45MV Gas Fired Plant

SongoSongo Refinancing

Electricity V.

4.2.2 The National-wide Power Crisis

The power crisis which hit the country from 1995 to date necessitated TANESCO to close down some of the power houses and resort to an expensive alternative power supply ie the use of thermal power. This alternative power is seen to be expensive and therefore difficult to sustain especially by the poor rural populace. In addition, this alternative power generation approach is faced with several constraints and challenges including:


71

• Fluctuating prices of petroleum products in the world market which caused an increase in isolated power plants operation costs;

• Stalled conversion of IPTL plant due to disputed amount of the capacity charges;

• Unreliable supply of power due to inadequate infrastructure in the generation, transmission and distribution systems;

• Deficient capacity in strategic areas in the management of the energy sector;

In view of the foregoing, the Ministry in collaboration with TANESCO came up with the following strategies to address the power shortage in the country:

• Having Electricity Act of 2008 in place: this will

encourage many power developers/producers to generate and sell electricity.

• Establishment and operationalisation of the Rural Energy Agency whose role is to facilitate strategies and undertakings towards expanding access to modern energy services (including electricity) particularly in the rural areas.

• Having an articulate Power System Master plan (PSMP) which allows and guides investors/developers to produce electricity on a least-cost basis.

Immediate strategies to address the power shortage

(i) Procurement of 100 MW Dar es Salaam-Ubungo based

natural gas fired plant 60 MW Mwanza-Nyakato diesel fired plant

(ii) Maintenance /rehabilitation of thermal (mainly

diesel) power plants


72

(iii) Purchase of diesel generators for Sumbawanga, Ngorongoro (Loliondo), Kasulu, Kibondo and Kigoma/Ujiji.

4.3 Perfomance of Health Sector I recognize the important role that the heath sector plays on provision of adequate and quality health and social welfare to the community. On this ground, I have decided to include in this report the general performance of the Health Sector in particular on budget allocation, human resource and health facilities as these are considered to be major inputs into delivery of quality and adequate health and social welfare services to the people.

4.3.1 Financial Resources (Budget allocation)

Financing of the Health Sector for three years namely 2006/2007, 2007/2008 and 2008/2009 as shown below:


73

TREND ANALYSIS FOR THREE YEARS

2006/2007 2007/2008 2008/2009 Source of Funds Approved

Estimate Actual Released Actual

Expenditure Approved Estimate

Actual Released

Actual Expenditure

Approved Estimate

Actual Released Actual Expenditure

Government Fund 7,123,005,000 7,123,005,000 7,010,164,200 6,774,000,000 5,480,500,000 4,939.500,050 13,029,173,000 12,305,574,009 12,305,574,009 Donor –Basket Fund

32,123,036,3300 32,123,036,330 32,123,036,330 36,594,605,500 31,535,015,500 22,217,510,511 49,301,810,000 49,301,810,000 40,380,295,723

Other Donors 51,612,533,3700 55,477,804,201 49,849,003,270 138,567,384,900 71,749,924,723 81,608,429,664 179,736,335,100 124,425,947,668 129,580,801,908 Total 90,858,574,700 94,723,845,531 88,982,203,800 181,935,990,400 103,290,420,223 103,825,945,164 242,067,318,100 186,033,331,677. 182,266,671,640 % of Donor Fund 92 92 92 96 95 95 95 93 93


74

This trend indicates that the health sector depends mainly on contributions from Development partners, and as such for the three years they contributed an average of 93% to the health sector. In addition, the trend reflects unsatisfactory execution as 25% and 8% of the development approved funds were not released by Donors and the Government of Tanzania respectively as shown below: Development Vote - Ministry of Health and Social Welfare Development Partners Contribution

2006/2007 2007/2008 2008/2009 Total

Amount Shs. Amount Shs. Amount Shs. Amount Shs.

Approved estimates

83,735,569,700 175,161,990,400 229,038,145,100 487,935,705,200

Actual released

87,600,840,531 103,102,940,223 173,727,757,669 364,431,538,423

Under/ over released

3,865,270,831 72,059,050,177 55,310,387,431 123,504,166,777

Perce-ntage of under/ over

5% over 41% under 24% under 25% under


75

APPROVED ESTIMATES VS AMOUNT RELEASED

0

50,000,000,000

100,000,000,000

150,000,000,000

200,000,000,000

250,000,000,000

2006/2007 2007/2008 2008/2009

Years

Amou

nts

Approvedestimates

Actual released

Under/overreleased

Development Vote - Ministry of Health and Social Welfare Government of Tanzania Contribution

2006/2007 2007/2008 2008/2009 Total Amount Shs. Amount Shs. Amount Shs. Amount Shs. Approved estimates

7,123,005,000 6,774,000,000 13,029,173,000 29,926,178,000

Actual released

7,123,005,000 5,480,500,000 12,029,173,000 24,632,678,000

Under/over released

0 1,293,500,000 1,000,000,000 2,293,500,000

Percentage of under /over

0% 19% under 8% under 8% under


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APPROVED BUDGET VS AMOUNT RELEASED

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

14,000,000,000

2006/2007 2007/2008 2008/2009

Years

Amou

nt

ApprovedestimatesActual released

Under/overreleased

Furthermore, the health sector in Tanzania is experiencing under funding taking into account the Abuja declaration which recommended allocation of at least 15% of total budget to the health sector, this can be observed from the trend of health sector budget to the total budget for the following years:

Year % of Health Budget

2001/2002 11% 2003/2004 9.7% 2004/2005 10.1% 2005/2006 11.6% 2006/2007 10.6% 2008/2009 10.2%

4.3.2 Human Resources

The health sector in Tanzania is facing human resource problems which negatively affects the ability of the sector to deliver quality health and social welfare services to the people. The shortage of staff in the health sector is more severe in rural areas. Although the Ministry has increased the number of medical schools and the intake has gradually increased over the


77

years, there is still a shortage of health workers, especially the more skilled cadres. In 2006, the Ministry of Health and Social Welfare estimated that a total of 82,300 skilled health professionals were required compared to 29,100 who were available implying a shortfall of about 65%. However, more health workers are needed in the implementation of the Primary Health Services Deployment Programme (PHSDP) 2007 – 2017. The national average of the number of people served by one medical doctor stood at 64,000 while the WHO recommendation is for one doctor to serve a population of 10,000. Among factors which have contributed to the shortage of human resources are the population growth, under funding of the health sector and inadequate motivation to doctors and other health and social welfare staff. The following table indicates the status of health workers by cadres.

Cadre Establishment Available Deficit % Deficit Specialist Doctors

229 96 133 58%

Medical Doctors 748 469 279 37% Assistant Medical Officers (AMO)

2,407 1,295 1,112 46%

Health Officers 1,823 990 833 46% Pharmacists 621 311 310 50% Clinical Officers 11,316 5,655 5,661 50% Radiographers 197 97 100 51% Ass. Clinical Officers

760 451 309 41%

Laboratory Technicians

821 480 341 42%

Health Secretaries

269 196 73 27%

Nursing Officers 6,559 4,381 2,178 33% Nurses 20,373 9,241 11,132 55% Others/Medical Attendants

24,154 18,891 5,263 22%

Total 70,277 42,553 27,724 39%

Source: Annual Health Statistical Abstract Tanzania Mainland 2008


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4.3.3 Health Facilities

There has been improvements in the health sector facilities through expansion of health services in the country. In 1980 , 45% of the population lived within one kilometer of a health facility, whereas 72% within five kilometers and 93% within ten kilometers of a health facility. In recent years however, there has been an increase in the number of health facilities in the country as majority of the population now lives within five kilometers from a health facility. The table below indicates the trend of expansion of health facilities in 2005 and 2006.

Year Hospital Dispensary Health

Centre Total

2005 219 4,679 481 5,379 2006 223 4,940 565 5,730 Increase 4 261 84 349

There is an increase of 349 health facilities from 5,379 in 2005 to 5,728 in 2006 which is equivalent to 6.5%. However, due to implementation of Primary Health Services Deployment Programme 2007 – 2017 more health facilities have been added to the figures of 2006 and construction of new dispensaries at the village level and health centers at the ward level are in progress almost throughout the country. The Ministry is also expanding the capacity of the Muhimbili National Hospital and Muhimbili Orthopedic Institute aiming at providing specialized medical services within the country so as to cut down huge costs of referrals abroad as can be seen below:


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Trend analysis for treatment abroad

Year 2006/2007 2007/2008 2008/2009 Total Recurrent Expenditure

178,822,082,213

173,409,505,996

207,521,103,915

Actual Expenditure for treatment abroad

3,128,183,452

3,896,521,600

6,692,180,183

% of Actual Expenditure for treatment abroad against actual expenditure

1.75

2.25

3.2

The trend shows that the costs for treatment abroad are increasing and to reverse this trend, means to speed up expansion of the local capacity for providing these services within Tanzania. To sum up, the health sector in Tanzania will be improved by solving the current shortage of human resources, poor health facilities in all levels and inadequate financing as stated above.

4.4 Infrastructure Development Sector

In evaluating the above sector, more emphasis was put on weighbridge and bridges. The annual progress report from the Ministry of Infrastructure Development revealed the following weaknesses regarding operationalization of weighbridges:

Performance of Weighbridges I noted in this years’ evaluation of performance of weighbridges that the objectives for having weighbridges in place were being wrongly perceived among the ordinary people including those who operates them. Whereas the prime objective of having weighbridges is to institute control to check overloading by trucks and therefore


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protect our roads from destruction, the thinking of the ordinary people is that weighbridges are the mechanisms by which revenue collection base of the Ministry of Infrastructure Development could be broadened. During the financial year 2008/2009, operations of weighbridges across the country costed the Ministry of Infrastructure Development Shs.3,292,600,000. I noted during this years’ evaluation that penalties that were being imposed on the overloading trucks were no longer deterring the trucks from overloading since the penalties charged are too low to generate any impact. Overloading fees amounting to Shs.2,992,000,000 were collected during the year under review; this amount is only 90.8% of the total annual outlay on operations. This implies that revenue collections from the overloading fees are not sufficient to sustain the operations of weighbridges in the country.

(b) Procurement of Motor Vehicles The Prime Minister on 14th July 2008 wrote a letter with ref. no PM/P/2/567/33 to the Minister of Infrastructure Development regarding reducing the cost of procurement of motor vehicles through centralized procurement and reducing the types and make of vehicles to be procured by the Government. Follow up on the directives disclosed that for two years 2007/8 and 2008/9 the Ministry procured a total of 996 motor vehicles and 416 motor cycles with a value of Shs 54,745,283,342 out of the ordered vehicles only 739 vehicles and 325 motorcycles were delivered.

Year Amount Deposited

Amount spend Motor vehicles Motorcycles

Ordered received ordered Received 2007/8 16,978,367,704 10,620,004,342 156 156 75 75 2008/9 45,289,824,464 44,125,279,000 524 267 160 69

Total 62,268,192,168 54,745,283,342 680 423 235 144

Further review of the centralized motor vehicles procurement showed that no arrangement is in place to


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hedge our local currency in the period between when the orders is placed until the externalization is made. This adversely affects the MDA budgets as frequent additions of money is requested to top up additional costs caused by exchange rate fluctuations. Further, as it is being depicted in the chart above, there is a delays in delivering the paid for motor vehicles.

(C) Construction of Umoja Bridge Tanzania and Mozambique entered into agreement to Construct the Umoja Bridge. Following the physical visit of senior officers at the site, the following recommendations were issued for smooth operationalisation of the project:-

• There is an urgent need to establish the necessary

infrastructure at the bridge. We need a police post, customs, immigration services at the bridge. For a start, there is an office building and staff quarters adjacent to the road which were used by the contractors which could temporarily be used as the base from which the above mentioned services could be provided from.

• To maximize the use of the bridge, the two

governments should endeavor to look for financing of the tarmac road from the bridge to the Masasi – Tunduma road (about 70 km stretch) and to the nearest District Headquarters in Mozambique (about 165 km stretch). This will ease accessibility to the bridge and encourage more users of the bridge.

• Since the construction cost of the bridge of over USD

27.0 million has been financed purely by the two governments, and since it is very likely that the majority of motorist users of this bridge are not going to be citizens of the two countries, there is need to introduce a user charge by all motorists crossing the bridge by establishing a road toll point at the bridge.


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• There is an urgent need of the two governments sitting down and agreeing on how to manage and operationalize the bridge. This could include the establishment of a joint committee or Commission to oversee the operations and maintenance of the bridge. It should also be agreed to establish a joint account to be financed either by contributions from the two governments or by the user charges charged on those motorists crossing the bridge. These funds will be used to pay for the maintenance costs of the bridge.

• Of the two sides of the bridge, the Tanzania side is

more lively and more promising. The leadership of the Nanyumbu District should be urged to mobilize potential investors and invest in the area to make it more accommodating and therefore take advantage of the users of the bridge in boosting the economy of the district and the nation at large.


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CHAPTER 5

AUDIT RESULTS OF DONOR FUNDED PROJECTS, AGENCIES, EMBASSIES/MISSIONS AND PROGRAMMES UNDER VOTES

5.0 Introduction The Office of the Controller and Auditor General is mandated to audit all Government revenues and expenditures. Further, the jurisdiction of my audit covers the audit of Donor Funded Projects, Government Agencies, Programmes and Embassies/Missions under the Ministry of Foreign Affairs and International Cooperation. In this year’s report of the MDAs, I have summarised audit results for Projects, Agencies, Embassies/Missions, Programmes and Bodies under Votes to highlight key issues of my concern for the attention of the responsible authorities. The detailed audit findings and recommendations are well covered in the individual Management Letters and Audit Reports issued to the respective Accounting Officers of the audited entities.

Findings from Management Letters and Audit Reports are summarised below:-

1. Clerk of National Assembly

1.1 Project: Commonwealth Parliamentary Association

Africa Region Secretariat

Audit Opinion: Unqualified

3.0 Ministry of Energy and Minerals

Project: Energizing Rural Transformation Project (Grant No. TF 054418) Audit Opinion: Unqualified

3.1 Gold Audit Program (GAP)



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3.2 Rural Energy Fund Audit Opinion: Unqualified

3.3 Sustainable Management of Mineral Resources Project SMMRP) Audit Opinion: Unqualified

3.4 Songo Songo Gas-to-electricity Project Audit Opinion: Unqualified

3.5 Tanzania Energy Development Access Expansion Project Audit Opinion: Unqualified

4.0 Ministry of Infrastructure Development

4.1 • Central Transport Corridor Project Credit NO. 3888-TA


• Project: Central Transport Corridor Project – CTCP2 – Credit 4455-TZ.

Financing: GOT, World Bank & Private Sector Opinion: Unqualified.

4.2 TANZAM Highway Project phase 1

Audit Opinion - Unqualified

5.0 Ministry of Health 5.1 Health Sector Development Program IDA CR 3841/GR

No.H071 – TA Audit Opinion: Unqualified

6.0 Ministry of Agriculture, Food Security and Cooperatives

6.1 Project: Participatory Agricultural Development and

Empowerment Project (PADEP)

Financing: International Development Agency (IDA) Audit Opinion: Unqualified


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6.2 Project:The District Agricultural Sector Investment Project (DASIP) Financing: African Development Fund, AfDB Loan, AfDB

Grant, GOT and Beneficiaries.


7.0 Ministry of Constitutional Affairs and Justice 7.1 Project: Legal Sector Reform Program

Financing: GOT and Development Partners(DP) Audit Opinion: Unqualified Opinion with Emphasis of matters. Outstanding matters from the previous years aggregating to Shs.639, 865,242 not yet resolved. Non delivery of goods paid in advance TShs 32,836,080. Balances retained without authority Shs.1, 778,696,589. Delay in completion of construction/rehabilitation of primary courts under the Judiciary and residential houses of Police. Non execution of action plan for the Social Welfare Department Shs.896,056,724

8.0 Ministry: Education and Vocational Training

8.1

Project: Science and Technology Higher Education Project Financing: GOT &World Bank Opinion: Unqualified with Emphasis of matters • Unreceipted transfer of funds

Us $ 476, • Unauthorized payments

Us $ 2,000 • Inadequately supported payment

Us $ 27,077


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9.0 Cabinet Secretariat 9.1 Project: The Property and Business Formalization

Program (MKURABITA) Financing: GOT & Kingdom of Norway Opinion: Unqualified

10.0 Ministry of Livestock and Fisheries 10.1 Project: Agricultural Sector Development Program

Livestock Component (ASD-L) Belgium Survival Fund (BSF)-grant no BG -42 TZ Opinion: Unqualified

10.2 (a) Project: Marine And Coastal Environment Management Project -GEF Trust Fund Grant No. TF 055580 TA

Opinion: Unqualified (b) Project: the Marine and Coastal Environment Management Project IDA Credit No.4106

Opinion: Unqualified with Emphasis of matter:

The project spent a total of USD.10, 737,211 against the annual budget of USD.18, 564,723 resulting into an under expenditure of USD.7, 827,512 equivalent to 42% of the annual budget .

• An amount of Shs.19, 800,000 from MACEMP Bank Account NO.012103018727 – TAFIRI was confiscated under a Garnishee Order Absolute of the Principal Resident Magistrate Kisutu. Prompt action is required to refund the money to the Project account.

• A test check of contract payments revealed that there is no inspection and acceptance committee to inspect the supplied goods contrary to the provisions under Regulation 126 and 127 of G.N 97 of 2005.


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• The sources and uses of funds for reimbursement out

of the Project account and supporting schedules and information submitted with them together with the internal control procedures involved in the presentation can be fairly relied upon to support the application for reimbursement.

• The procurement procedures applied complied with

the requirements of the Public Procurement Act 2004 and its Regulations and the World Bank guidelines.

The receipts from the Project account were properly accounted for and it has been established that the expenditure incurred has been made exclusively and judiciously for the purposes of the project and in accordance with the Development Credit Agreement.

10.3

Project: Strengthening Institutions for risk Management of Transboundary Animal Diseases Project (SADC -TADs) Financing: ADF Grant Opinion: Unqualified

5.1 Audit of Embassies/Missions

During the financial year 2008/09, I audited 32 Tanzania Embassies/Missions abroad. Audit findings and analysis of Audit Opinions issued are shown below:

Type Of Opinion Number of Embassies/Missions


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5.2. Missions/Embassies with Unqualified opinion without emphasis of matters

The following five (5)(15.6%) (Embassies were issued with unqualified opinion with no emphasis of matters. • Tanzania High Commission in Harare – Zimbabwe • Tanzania High Commission in Lilongwe - Malawi • Tanzania High Commission in Kuala Lumpur - Malaysia • Tanzania Embassy Brasilia in Brazil • Tanzania Embassy in Riyadh Saudi Arabia

5.2.1 Missions/Embassies with Unqualified Opinion with emphasis of matters

The following 21 (66%)2Embassies/Missions were issued unqualified opinion with emphasis of matters

1. Tanzania Embassy in Muscat Oman • Visa collections fees TShs.68,852,847.80 has been

spent direct from collections without appropriate authority from the Ministry.

2. Tanzania Embassy in United Arab Emirates- Abu Dhabi • Supply Vote Account closed with an over expenditure

of TShs.241,255,955 • Refund of medical charges amounting to Dhs

40,385.45 (TZS 14,377,220) to various mission staff and the Consul General against Reg 142 (b) of the Foreign Service Staff Regulations (Revised) 1979 on medical expenses overseas.

2007/2008 2008/2009 (i)

Unqualified Opinions with Matters of Emphasis

14 21

(ii) Qualified Opinions 8 5 (iii) Adverse Opinion 2 1 (iv) Disclaimer of Opinion - - Total audited

Embassies/Missions 32 32


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3. Tanzania Embassy in Kigali - Rwanda

• Irregularities noted on Processed Entry Visa Application forms

• Non Disclosure of property, plant and equipment schedule in the financial statements

• A review of Embassy properties revealed that a

House located at plot no: 722 in Kacyiru north is in bad condition and needs urgent rehabilitation.

4. Tanzania High Commission in Kampala- Uganda

• Inadequate custody of daily revenue collections. No safe box to keep money

• Unremitted Statutory Deductions of Ushs 12,325,500 (Tshs.8,044,853.85) made since Jan 2004 not remitted to NSSF instead are kept in a deposit account

• Government Properties not maintained Two Buildings in Khartoum (chancery and residence) under control of Tanzania High Commission Kampala though rented to Uganda Embassy Khartoum are in worst condition.

• Foreign Exchange Loss missing Supporting Schedule Shs.19,835,769.

5. Tanzania High Commission in Nairobi - Kenya • Over Expenditure on Itemized Items Shs.162,174,531 • Grounded motor vehicle No. 97CD1K Mercedes Benz

S 320 was grounded since 2005. • Unapproved virement of funds amounting to US$

22,557.23 (Equivalent to TShs 27,512,537.85). used funds for unintended purpose Mombasa consulate

• Foreign Exchange Gain missing Supporting Schedule Shs.10,637,091

6. Tanzania Embassy in Stockholm - Sweden • Unremitted revenue from Denmark Consulate


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TZS.130,196,234 Equivalent to SEK. 657,722.83 • Un necessary fines and Fees SEK 21,380 Equivalent

to TZS 3,820,176 paid by the Embassy • Statement of Cash Receipts and payments

Overstated by TZS 992,778 • Outstanding Creditors SEK 14,509 Equivalents to

TZS 2,465,507

7. Tanzania Permanent Mission to the United Nations – New York

• Cancelled ERVs without being supported by original receipts USD 4470

• Payments not acknowledged with receipts by the payee USD 3,400

• Payment from deposit A/C not refunded - USD 1,041,036.95

• Transfer of funds from revenue collections without approval USD 319,000

• Improper transport costs USD 2,885 • Penalties for late payments of rents (Nugatory

payments) – USD 1277.09 • Security deposit not recorded into register USD

19,440 (approx.Tshs.25,272,000)

8 Tanzania High Commission in Canada - Ottawa • Fuel procured not accounted for worth CAN $

5,503.78(TShs.7,154,914) • Revenue collections amounted to CAN $ 16,495

(Approximately Tshs.21,443,500) was not banked • No analysis on exchange loss of Shs.56,986,755

9. Tanzania Embassy in Paris • Payments Euro 79,588 (equivalent to

Tshs.136,632,624) from revenue collections without authority.

• Shs.Tshs.351,680,644 was expended over and above the approved estimates and no written approval


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granted

10. Tanzania High Commission in London - UK • Shs.1,024,228,933 spent above the approved budget

without seeking authority from Accounting Officer 11. Tanzania Embassy in Washington DC

• Cancelled ERVs not supported by original receipts USD 3,792

• US$ 23,561.05 (Tshs.30,629,365) incurred had no budgetary provisions or funds reallocation

• No evidence or approval to support the Reallocation warrant of Shs.106,510,427

• No analysis to support exchange loss of

Shs.310,554,62

12. Tanzania High Commission in Lusaka-Zambia • Difference in cash closing balance

• No supplementary budget over expenditure of

Shs.90,731,414

13. High Commission of Tanzania in Abuja

• Responsibility Allowance not approved by the Accounting Officer - Naira 111,000.

• Payment of Responsibility Allowance not approved by

the Accounting Officer - Naira 111,000 • Un-authorized transfer of funds from Revenue to

the Vote account amounting to 22,915,150

14. Embassy of Tanzania in Addis Ababa

• An over expenditure of TShs.33,088,994.50 which lacks authority from the Accounting Officer

• Undeveloped Plot for Construction of Ambassador’s


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residence

15. Embassy of Tanzania in Cairo - Egypt

• Revenue collected by Honorary Consul, Madam

Rinit Hershkovity in Tel Aviv – Israel, amounting to USD 139,420 were not remitted to the Embassy in Cairo

16. Tanzania Embassy in Berlin - Germany • Over expenditure of Shs.329,454,652.

• Euro 135,000 was transferred from Visa Collection Revenue account to Vote account without a prior approval

• Honorary Consulate in Hamburg remitted a sum of Euro 53,819.50 out of total collection of Euro 71,950. Out of the remitted amount, commission charged by the Honorary Consular amounted to Euro 17,987.50 representing 25% of total collections. No evidence of formal agreement concerning the functions and the rate of commission charged by the Honorary Consulate.

17. Tanzania Embassy in Beijing China

Over expenditure of TShs.295,073,290.

18. Tanzania Embassy in Moscow - Russia The statement of assets and liabilities as at 30

th June,

2009 and the related records reflected outstanding liabilities amounting to Shs.451,378,015.00

19. Tanzania High Commission in New Delhi India

A sum of Shs.467,798,090 budgeted for the operation of the Mission was not released during the year under review.

20. Tanzania Embassy in Tokyo - Japan


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• The Embassy received a sum of Shs 255,185,025 over and above the approved budget of Shs.1,285,719,100 and no retrospective approval obtained to legalise the amount over released

• Embassy building is in danger condition particularly during raining due to roof leakage and dilapidated water and heating system.

21. Tanzania Embassy in Geneva - Switzerland

• Audit of statement of cash receipt and payment for the year 2008/09 noted that the statement was overstated by TShs.300,028,236. This is shown by comparison between the audit figure TShs.2,206,466,396 and figure reported in the receipt and payment statements TShs.2,506,494,632.

• Purchased motor vehicle was wrongly recorded in the previous years’ financial statements before the final payment and delivery of the asset were made. Furthermore, the motor vehicle was not reported using the prevailing exchange rate at the date of acquisition.

22. Embassy of Tanzania in Bujumbura - Burundi

• One motor vehicle Nissan patrol station wagon with registration number CD 06 – 12 was not physically found in the Embassy’s premises. Further verification noted that the motor vehicle is found to be grounded in the head quarter DSM. Action need to taken to avoid mismanagement of that asset.

• Visa sticker machine was found to be out of order,

consequently the level of service provided by the Embassy in relation to visas is not efficient.

• The building on Plot no. 36 was found to be in a very

bad bad condition and needs major rehabilitation.

• Continued delay in rehabilitating the building may


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result into exorbitant repair costs or render the house irreparable

• 15 local based staffs were employed without having

employment contracts. Non availability of clear employment terms may result to financial accountability challenges.

• Detailed/schedule of exchange loss that is showing a

breakdown of Shs.28,893,191 is missing. Hence the genuineness of the loss can not be ascertained.

Embassies/Missions issued with Qualified Opinion

28. Tanzania High Commission in Maputo - Mozambique • Funds for promoting tourism used for other purposes

Shs.29,958,480 • Unauthorized transfer of revenue, from revenue

account to Vote USD account Shs.10,933,125 (USD 8,500)

29. Tanzania Embassy in Rome – Italy

• Payments Euro 7,016.50 (TShs.11,394,766) were effected in Cash direct from the Visa Collections without seeking authority from the Permanent Secretary, Ministry of Foreign Affairs and International Cooperation.

• Payments totalling Euro 10,654 (equivalent TShs. 17,300,365.47) was paid as penalty for delayed payment of monthly house rent which was not budgeted for hence becoming a nugatory expenditure on public funds.

• Euro 209,016.50 (equivalent TShs.339,440,746) was transferred from revenue account to Vote account without authority from the Permanent Secretary Ministry of Foreign Affairs and International Cooperation

30. Embassy of Tanzania in Kinshasa - DRC


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• Transfer of funds from Revenue Account to Vote

Account TShs.25,069,606 (US$ 19,200) • An over-expenditure of Tshs.23, 724,788.81 which had

no approval

31. Tanzania Permanent Mission in UN-Geneva • Supporting schedules for other receipt

Tshs.301,319,861 and Purchases of assets Tshs104, 442,154 were missing

• The statement of Cash receipt and payments was overstated by TShs.300,028,236

• Rehabilitation of building worth Tshs.128,800,000 was

not capitalized A test check on the building files and related records for the year 2008/09 disclosed the rehabilitation of Head of Mission residential house amounting to Tshs.128,800,000. The rehabilitation involved replacement of some new appliances in the house, despite that; the costs were not capitalized to reflect the current value of the building contrary to IPSAS 16.

Embassies/Missions with Adverse Opinion

32 Tanzania Embassy in Brussels - Belgium • Revenue collected amounted to Euro 7,530 equivalent

to TShs.13,259,963 was not banked • Disagreement

The financial statements submitted were inaccurate and incomplete. As a result, the Ambassador could neither accept responsibility nor endorse them for presentation. The financial statements were not withdrawn for adjustments as recommended.


96


97

CHAPTER 6

FINANCIAL AND ASSET MANAGEMENT

This chapter aims at providing information on the financial performance of MDAs/RAS Embassies/Mission for the year under audit. This includes a review of MDAs/RAS, Embassies/Missions status in regard to outstanding matters from the previous audit recommendations, funding analysis, and current key audit findings.

6.1 Outstanding matters from previous audits

Various MDAs and RAS made good progress in implementing outstanding matters arising from the previous years’ audits. However, in this year’s audit 37 MDAs/RAS had previous years’ outstanding issues amounting to Shs.1,055,460,602,544 with the Police Force having the largest share of Shs.29,598,445,103 followed by Immigration Service Department with Shs.11,830,811,510 and Ministry of Defence and National Service is third with an amount of Shs.6,768,619,817. (See Annexure III) Embassies/Missions had outstanding matters worth TShs.16,073,916,141.95, USD 182,401, GBP 79,568, EURO 286,080, Dhs.126,138.87 and CHF 1000.

Embassies/Mission with outstanding matters arising from previous year.

EMBASSY/MISSI

ON O/S MATTERS

TShs. USD GBP EURO Dhs CHF

BEIJING 435,736,084. BERLIN 3,519,115,785 BUJUMBURA 34,768,070 OTTAWA 0 9496.15 KIGALI 20,276,829.95 KINSHASA 208,526,812 LONDON 4,115,650,386 79,568 MOSCOW 237,655,029 NEW DELH 219,624,494 3600


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NEW YORK 1,515,895,853 26,805 OMAN 992,000 PARIS 818,011,068 7080 PRETORIA 267,868,547 ROME 1,627,966,721 STOCKHOLM 130,196,234 UAE 0 126,138.87 WASHINGTON DC

540,777,115

BRUSSELS 0 279,000 GENEVA 2,162,233,611 1000 RIYADH 0 BRASILIA 24,902 142,500 ABUJA 218,596,601 Total 16,073,916,141.95

182,401

79,568 286,080

126,138.87 1000

The purpose of audit findings and recommendations to the auditee is to assist the auditee in rectifying matters of concern in the MDAs/RAS with a view of improving the financial management and control of resources of the entities. Non responding to the auditors’ findings and recommendations as is the case with the twenty two (22) MDAs/RAS as reported in the audit report of 2008/09 is a serious malpractice on the part of the Accounting Officer and management of the concerned MDAs/RAS.

The consequences of not acting upon the auditors’ observations and recommendations leads to the recurrence of the anomalies observed by the auditors in subsequent financial reporting years. This can also reflect lack of seriousness and non commitment on the part of the Accounting Officers and management of the entities concerned. The list of outstanding matters from previous audit reports is in annexure I of this report.

A comparative summary of outstanding matters of 2007/08 and 2008/2009

Financial Year

Outstanding Matters (TShs)

MDAs/RAS involved

2007/2008 1,036,225,348,815 17 2008/2009 1,055,460,602,544 37


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The summarized results above shows the total value of outstanding matters from the previous year’s audit for the year 2007/2008 which involved 17 MDAs/RAS amounting to Shs. 1,036,225,348,815 In the financial year 2008/2009 the number of MDAs/RAS with outstanding audit matters increased from 17 to 37 and the amount involved increased to Shs.1,055,460,602,544 compared to Shs. 1,036,225,348,815. This indicates that the MDAs/RAS managements have not made concerted efforts in dealing with recommendations raised by auditors. Annexure III attached to this report shows the detailed list of MDAs/RAS and amounts of previous years’ matters not cleared.

6.2 Funding Analysis for MDAs/RAS and Embassies/Missions for 2007/2008 and 2008/2009

This section gives a critical analysis of the funding portfolio of MDAs/RAS and Embassies/Missions for the financial year 2007/2008 and 2008/2009. MDAs/RAS and Embassies/Missions are mainly funded by Exchequer Issues from the Treasury.

6.2.1 Comparison of Exchequer Issues received and Actual

Expenditure for Supply Votes of MDAs, RAS, and Embassies/Missions

Records show that total exchequer issues released by Treasury for Supply Vote Account in the financial year 2007/2008 was Shs.2,771,960,445,151 whereas actual expenditure was Shs.2,142,720,153,992. On the other hand, the exchequer issues released by Treasury to MDAs in the year 2007/2008 was Shs.3,590,968,044,750 whereas actual expenditure was 3,533,021,852,627 (See Annexure IV)

The above data is summarized in the table below:


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Activity F/year 2007/08 F/year 2008/09

Actual release Shs. 2,830,069,934,973 3,590,968,044,750 Actual expenditure Shs. 2,766,275,839,979 3,533,021,852,627 Variance Shs. 63,794,094,994 57,946,192,123

The above information can be shown on the histogram below:-

Comparison of Exchequer Release Vs Actual expenditure - MDAs

0500,000,000,000

1,000,000,000,0001,500,000,000,0002,000,000,000,0002,500,000,000,0003,000,000,000,0003,500,000,000,0004,000,000,000,000

2007/2008 2008/2009

Years

Amou

nt

Actual release Actual expenditure

Regional Votes

Records show that total exchequer issues released by Treasury for Supply Vote Account in the financial year 2007/2008 was Shs.943,105,659,768 whereas actual expenditure was Shs.940,529,658,619. On the other hand, the exchequer issues released by Treasury to Regional Votes in the year 2008/2009 was Shs.1,227,284,940,426 whereas actual expenditure was 1,206,504,067,673.

Activity F/year 2007/08 F/year 2008/09 Actual release Shs. 943,105,659,768 1,227,284,940,426 Actual expenditure Shs. 940,529,658,619 1,206,504,067,673 Variance Shs. 2,576,001,149 20,780,872,753


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Comparison of Exchequer issues Vs Actual expenditure - RAS

0200,000,000,000400,000,000,000600,000,000,000800,000,000,000

1,000,000,000,0001,200,000,000,0001,400,000,000,000

2007/08 2008/09

Years

Am

ount

s

Actual release Shs.

Actual expenditure

6.2.2 Comparison of Actual exchequer released for MDAs

Supply and Development Vote Account 2007/2008 and 2008/2009

Records show that total exchequer issues released for Supply and Development Vote Account in the year 2007/2008 was Shs.2,820,012,285,104 and Shs.1,017,152,725,965 respectively recording a difference of Shs.1,802,859,559,139. In addition the exchequer issues released to supply and Development account in the financial year 2008/2009 was Shs.4,952,445,794,870 and Shs.1,635,263,360,853 recording a difference of Shs.3,317,182,434,017 (67 %) The above findings can be summarized as follows: F/year Supply Vote Shs. Development Shs. 2007/08 2,820,012,285,104 1,017,152,725,965 2008/09 4,952,445,794,870 1,635,263,360,853


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Alternatively, the above data can be presented in the form of histogram as follows:

EXCHEQUER ISSUES RELEASED

0

1,000,000,000,000

2,000,000,000,000

3,000,000,000,000

4,000,000,000,000

5,000,000,000,000

6,000,000,000,000

2007/08 2008/09

Years

Am

ount

SupplyVote Development

6.2.3 Comparison of approved budgets against actual funds

released by the Treasury for Development A/C for MDAs The approved budget for Development Vote A/c for MDAs in the year 2007/2008 was Shs.1,836,306,237,025 whereas the actual funds released was Shs.1,016,926,970,925 resulting into under funding of Shs.819,379,266,100 (55%). Likewise, the approved budget for Development Vote A/c for MDAs in the year 2008/2009 was Shs.2,268,306,465,161 while the actual funds released was Shs.1,635,263,360,853 resulting into under funding of Shs.633,043,104,308 (27.9%).

A summary of Approved budgets for Development Vote A/C – Ministerial Votes.

Approved budget Actual released Difference 2007/2008 1,836,306,237,025 1,016,926,970,925 819,379,266,100 2008/2009 2,268,306,465,161 1,635,263,360,853 633,043,104,308


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From the above table it can be concluded that a total amount of 633,043,104,308 or 27.9% approved for development activities in the financial year 2008/09 was not released by Treasury as compared to Shs. 819,379,266,100 or 48.6% for the financial year 2007/2008. This means that development activities of the same magnitude were not implemented.

Approved budget Vs Actual release

0

500,000,000,000

1,000,000,000,000

1,500,000,000,000

2,000,000,000,000

2,500,000,000,000

2007/2008 2008/2009

Years

Am

ount

s

Approved budgetActual released

From the above analysis, it is obvious that there is a serious problem of funding for Development activities. The trend for the two years reveals under funding whereby there has been decrease in funding as depicted by the summarized results shown in the table above.

6.2.4 Questionable Payments Shs.2,130,565,329

During the financial year 2008/2009 nine (9) MDAs incurred payments of Shs.2,130,565,329. However, the payments lacked relevant and sufficient information to establish the validity of the payments and hence qualify to be a proper


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charge to the public funds. However, there was no such payments in the Embassies/Missions.

A detailed analysis of these payments of questionable

nature is given in the table below:

S/No MINISTRY Vote AMOUNT 1. Bunge 42 48,719,843 2. Ministry of

Information, Culture and Sports

96 7,719,000

3. PMO – RALG 56 40,510,800 4. Commission for

Human Rights & Good Governance

55 1,940,750

5. Ministry of Finance and Economic Affairs

50 1,237,085,583

6. Ministry of Land, Housing and Human Settlement

48 1,648,068.80

7. National Service 39 20,000,000 8. Prime Minister’s

Office 37 226,000,000

9. President’s Office – Public Service Management

32 774,882,034

Total Shs. 2,130,565,329

Summarized results of questionable payments for financial year 2006/2007 and 2007/2008 are given in the table below for comparison purposes:-

Financial Year Amount (TShs) MDAs/RAS involved 2007/2008 10,056,706,649 14 2008/09 2,130,565,329 9


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6.2.5 Deferred Payments

Reg.54(4) of the PFR states that “No Accounting Officer or any officer shall cause to transfer expenditure from one financial year to another, and any such transferred expenditure shall be treated as unauthorized expenditure. Contrary to this requirement, we noted that payments amounting to Shs.482,538,225 relating to the previous year were withheld and paid during the year under review to avoid over expenditure in the financial year 2008/2009. Details are shown below:

Vote Name of Ministry Amount (Shs)

32 President’s Office – Public Service Management

39,392,188

53 Ministry of Community Dev.

29,680,246

56 PMO – RALG 41,717,754 64 Commercial Court 2,208,000 37 PMO 97,510,796.80 43 Ministry of Agriculture 26,002,090 40 Judiciary 8,080,512 28 Police 237,946,638

Total 482,538,225 Summarized results of deferred payments for financial year 2007/2008 and 2008/2009 are given in the table below:-

Financial Year Amount (TShs) MDAs/RAS involved

2007/2008 2,437,427,510 8 2008/2009 521,930,413 8

As summarized above, the number of votes with deferred Payments remained the same in 2007/08 and 2008/09.


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107

CHAPTER 7

REVIEW OF PROCUREMENT PROCESSES

7.0 Introduction

PPRA prepared and submitted a report on the performance of procuring entities for the period under review which highlighted most of the issues which largely featured also in my previous report. I appreciate the work done by the Authority which I found relevant and appropriate to incorporate in my report.

Summary of the findings and weaknesses observed are narrated below:

7.1 Performance of Procuring Entities (PEs)

Information collected from 25 out of 99 Procuring Entities indicates that contracts worth TShs.1, 120,493,918,464 were awarded in the financial year 2008/2009. On overall there has been poor response by Procuring Entities to provide information on awarded tenders which would have facilitated the collection and provision to the public of this important data on public contracts. It is expected that many Procuring Entities would come forward to provide information once they realize the usefulness of the contract award information to the public and for planning purposes.

Out of 25 procurement audits carried out, it was established that the average level of compliance of Procuring Entities to the PPA CAP 410 and its Regulations was 57%. The highest compliance level was 86% while the lowest was 20%. With this level of compliance, PPRA has a daunting task of ensuring that a compliance level of 80% is attained by 2010.


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7.2 Common weaknesses noted by PPRA

a) Establishment and composition of PMUs

Establishment and staffing of PMUs is a problem facing many procuring entities. The audits revealed that the overall level of compliance on establishment and composition of PMUs was 43%. The average level of compliance for MDAs, PAs and LGAs was 44%, 49% and 38% respectively. For the Central Government, the problem is due to the weakness in the PPA which is silent on the reporting mechanism of the Head of PMU within the PEs and in some cases PMUs were established as Committees of the Tender Board instead of administrative units within the PEs. b) Preparation of Annual Procurement Plan

The annual procurement plan is very important in that it helps the procuring entity to: • Avoid unnecessary emergency procurements;

• Aggregate its requirements wherever possible in order

to obtain value for money and reduce procurement costs.

• Make use of framework contracts wherever appropriate

to provide an efficient, cost effective and flexible means to procure works, services or supplies that are required continuously or repeatedly over a set period time.

• Avoid splitting of procurements and therefore use of appropriate procurement methods;

• To plan efficiently tender board meetings in order to

minimize procurement transaction costs.


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The review indicated an average level of compliance in this area of 46%, 47%, and 30% in MDAs, PAs and LGAs respectively. Specific weaknesses in the assessed procurement plans and their implementation included: • Appropriate templates are not used; processing times

for different stages of a procurement process are not indicated;

• Requirements from user departments are not aggregated;

• Some of the procurable items in the budget are not included;

• Too many tender board meetings; • Extensive use of quotations under minor value

procurements; and • Unrealistic plans. c) Contracts Management

In assessing the adequacy of contracts management, the review teams analyzed the following issues: • Whether contract documents contained all necessary

information; • Whether contracts were properly signed; • Time management issues; • Scope management issues; • Quality management issues; • Communication management issues; and • Cost management issues.

The audit indicated average levels of compliance of 51% and 34% for contracts administration, and quality assurance and control respectively. Generally, the following weaknesses were observed: • Contracts were not properly signed in some cases; • Some of the contracts lacked important contract

information and documents such as conditions of


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contract, drawings and specifications, and some contained non-contract documents such as invitation for bids/quotations and instructions to bidders;

• Liquidated damages were not applied for delayed contracts;

• Site meetings were not conducted for most of the reviewed contracts;

• There were no adequate quality assurance and control plans, completed works were not tested to ascertain whether they have attained the specifications as provided in the contract documents;

• Progress reports for works contracts were not prepared; • Site supervision reports were not prepared; • Extension of time were issued without justifiable

analysis and without following appropriate procedures; • Payment certificates were not attached with necessary

information such as measurement sheets and working/ take-off sheets to justify the quantities paid;

• In some cases payments were made for works which have not been done by exaggerating the quantities; and

• Goods Inspection and Acceptance Committees were not appointed to ascertain the quality and quantity of the supplied goods.

d) Records Keeping The audit teams assessed the availability, adequacy of the arrangement, adequacy of facilities, adequacy of storage space and location of the procurement records. The assessment indicated an average compliance level of 35% on records keeping. The major weaknesses included lack of a comprehensive list of tenders, quotations and contracts, procurement records scattered in different departments, lack of records on contracts management, inadequate space and shelves for records storage, and inappropriate filing. It was difficult for the review teams to ascertain the exact number of tenders floated and the retrieval of information was time consuming as records could not be obtained from one point.


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(e) Non submission of monthly and quarterly procurement reports to PPRA Monthly and quarterly procurement reports were not prepared. This is a requirement under the Checking and Monitoring System for procurement activities to all MDAs (A Circular was issued by PPRA on 23rd July, 2007), the following MDAs did not comply with the above Circular:

• RAS – Mtwara • RAS Kigoma • Occupational Safety and Health Authority (OSHA)

(f) Non submission of tender advertisement to PPRA

Tender advertisements were not submitted for posting into PPRA’s website. This is a requirement under Regs. 9(a) and 7(a) of G.N. No.97 and G.N No. 98 of 2005 respectively. The under listed MDAS did not adhere with the cited regulations • RAS Mtwara • RAS Manyara • RAS Lindi • RAS Mwanza • RAS Mara • RAS Rukwa

(g) Poor contract management

There were a number of weaknesses in contract administration such as delayed payments, lack of quality control, delayed compilation of projects, excessive variation order, incorrect claims assessment etc. Inadequate management of contracts was observed during audit in the following MDAs: • RAS Mtwara • RAS Manyara • RAS Lindi • RAS Mwanza • RAS Mara


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• RAS Rukwa • RAS Mbeya • RAS Tanga • RAS Shinyanga • RAS Kigoma • Tanzania Building Agency (TBA) • Anti Drugs Commission

7.3 Procurements made without Annual Procurement Plans

Sect.45 of the PPA of 2004 requires every Procuring Entity to plan its procurement in a rational manner to avoid unnecessary emergency procurement and be able to aggregate its requirements so as to obtain value for money, reduce procurement costs and have effective procurement contract arrangements. During the year under review, MDAs/RAS had effected procurement of goods and services without complying to the procurement plans as detailed here below: • RAS Manyara • RAS Lindi • RAS Mwanza • RAS Mara • RAS Rukwa • RAS Mbeya • RAS Tanga • RAS Shinyanga • RAS Coast • Tanzania Building Agency (TBA) • RAS Mtwara • Weight and Measure Agency

7.4 Procurements Made Without Tender Board’s Approval Shs.1,828,731,583

During the year under review, we noted instances whereby 3 MDAs effected procurements without Tender Board’s


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approval hence contravening requirement of Regs. 40 and 41 of the Public Procurement (goods, works, non consultant Services and disposal of public assets by tender) Regulations 2005 as summarized in the table below: Vote MDA Name Description Amount (Shs) 39 National Service Various

procurement of goods and services at Ruvu and Mafinga camps

553,296,000

50 Ministry of Finance and Economic Affairs

Advertisement on investment opportunities

1,237,085,583

RAS Mbeya Installation of 13 Horse reels at

the Regional and District

commissioners offices

38,350,000

Total 1,828,731,583

7.5 Irregularities in procurement and maintenance of motor vehicles Shs.4,018,535,583

All MDAs/RAS are required to service and maintain government vehicles through TEMESA or using private dealers who should be authorized by TEMESA upon submission of documentary evidence to confirm their competencies and capacities in the particular field as required by Reg. 5 of the Public Procurement (Goods, works, non consultant services and disposal of public assets by tender) Regulations 2005.

During the year under review, a test check has revealed the following irregularities noted on motor vehicles maintenance and services.


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VOTE NO.

DESCRIPTION AMOUNT PAID (SHS)

REMARKS

39 National Service 103,534,922 Questionable costs for maintenance of motor vehicles – value for monies doubted

48 Ministry of Lands and Human Settlement

39,000,000 Value of motor vehicle procured but no documentary, evidence to confirm the existence

96 Ministry of Information Culture and Sports

106,712,400 Value of goods and services planned for but not implemented

14 Fire and Rescue 81,963,360 Value of Tender awarded without competitive bidding

48 Ministry of Lands and Human Settlement

39,000,000 Value of motor vehicle procured but no documentary, evidence to confirm the existence

96. Ministry of Information Culture and Sports

106,712,400 Value of goods and services planned for but not implemented

21 Treasury 148,836,000 Procurement of hiring services in respect of one motor vehicles was not made in a competitive manner

29 Prison 55,600,000 Value of motor vehicle not compensated after being drowned in the sea owner of the MV Obus was supposed to compensate the government

43 Ministry of Agriculture and Food Security

94,763,744 Splitting procurement of goods and services to avoid compliance with Reg.49 (1 – 4)


225,000,000 Questionable emergency procurement of chemicals known as Thidoba

97 Ministry of East African

43,745,746 Questionable costs for repair of motor vehicle STJ 2666

23 Accountant General

35,286,000 Goods supplied contrary to specifications


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38 Ngome 86,791,628 Payments made on proforma invoice

50 Ministry of Finance 1,237,085,583 Questionable payments for advertisement

50 Ministry of Finance 1,600,000,000 Procurements made at the year end with no inspection committee in place.

90 Land Court 14,503,800 Payment for goods and service without Tender Board approval

TOTAL 4,018,535,583 7.6 Weakness in contracting and contract management

Shs.3,115,507,827 Part (x) of the Public Procurement (selection and employment of consultancy) Regulations 2005 spells out clear procedures for managing contracts. It was however, found out during the audit that there are substantial weaknesses in managing public procurement contracts as pointed out below from the sample tests conducted:

VOTE MDA/RAS AMOUNT (SHS) IRREGULARITIES

NOTED 32 President’s

Office Public Service Management

1,914,557,000 Outstanding contract works for construction of Mwanza Zonal Records centre.

34 Ministry of Foreign Affairs and International Cooperation

57,815,400 Payments made to suppliers without prior to award of the contracts weakness in contract. Services procured out of the Annual procurement plan


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90,721,600 Apparent loss on questionable addendum on contract No.013/2007


84,781,970 Procurement above the authorized limits


113,956,815 Delay in completion of construction works

51 Home Affairs 266,700,532 Interest for late payment

57 Ministry of Defence and National Service

105,128,000 Service procured without contract between the two parties

97 Ministry of East African

58,461,200 Payments made without contract agreement

61 National Electoral Commission

423,385,310 Payments made without addendum for extension of services

Total 3,115,507,827

7.7 Goods/services paid for but partly/not delivered- Shs.1,660,648,095

Goods worth Shs.1,660,648,095 were ordered and paid for but were found either to be partly delivered or undelivered in the MDAs/RAS listed in the table below. The noted practice contradicts the requirement of PPR No. 122 (1) (Goods, Works and non Consultant Services) Regulations 2005 which requires a procuring entity to obtain reports on


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the receipt of goods that have been delivered against contracts in order to authorize promptly payment to the supplier.

VOTE MDA/RAS Amount (Shs Description of Goods

and Services 14 Fire and

Rescue 705,197,958 Fire fighter

equipments paid for but not delivered. Fuel not recorded in the ledger

29 Prisons 764,322,637 Motor vehicles and cycles procured and paid for but not delivered


46,460,000 Motor vehicle procured but not delivered

93 Immigration Department

144,667,500 Payment for motor vehicle (Minibus not yet delivered)

Total 1,660,648,095 7.8 Stores not recorded in stores ledger – Shs.

2,273,828,586

Reg.198 of the Public Finance Regulations of 2001 (revised 2004) states that “except provided, all stores received must be brought on charge without delay in the stores ledger and supported by the relevant receipt in the manner described in these regulations”. Audit tests carried out on the management of stores revealed that 14 MDAs/RAS did not comply with the above stated regulation as follows:

List of procured stores not recorded in stores ledger in MDAs/RAS.


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VOTE NAME OF MDAS/RAS AMOUNT INVOLVED

REMARKS

91 Drug Control Commission

14,920,500 Stores not properly accounted for

39 National Service 80,289,000 Stores not recorded in ledger

14 Fire and Rescue 13,362,180 Fuel not recorded in the ledger

96 Ministry of Information Culture and Sports

71,005,205 Stores not adequately accounted for


421,563,420 Fuel purchased but not properly accounted for in the respective ledgers

49 Ministry of Water and Irrigation

42,200,000 Fuel paid for but not properly accounted for in the respective ledgers

38 Ngome 287,320,000 Stores not adequately accounted for in the respective ledger books


206,253,988 Misappropriate of stores item

Total Shs. 2,273,828,586

7.9 Stock verification reports on stores management

Part XV of the PFR deals with the need for having an Independent Stock Verification in stores of MDAs/RAS. In this regard therefore, I have received Stock Verification reports in accordance with Reg.245(3) of PFR 2001 (revised 2004) that “The Stock Verifier shall retain one copy of the report for his own record and send one copy each to the Accounting Officer concerned, the Permanent Secretary, Accountant General and to the Controller and Auditor General.”


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In compliance with the above requirements, the Stock Verification Unit under the Ministry of Finance and Economic Affairs conducted a thorough Stock Verification exercise for seventeen (17) MDAs and twelve (12) RAS for the year ended 30th June, 2009.

During the year under review, there has been a considerable gap in the management of stores as explained in a condensed summary of the Stores Mismanagement report submitted to me by the Stock Verification Unit of the Treasury shown as Annexure “V” ( i – xvi).


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CHAPTER 8

AUDIT RESULTS OF TANZANIA REVENUE AUTHORITY (TRA) AND THE NATIONAL CONSOLIDATED FINANCIAL STATEMENTS

8.0 Introduction

This chapter details the results of the audit of the Tanzania Revenue Authority (TRA) and the national Consolidated Financial Statements of the United Republic of Tanzania for the financial year ended 30th June, 2009.

8.1 Audit Results of Tanzania Revenue Authority (TRA)

Tanzania Revenue Authority was established by Act No.11 of 1995 as amended by Act No.8 of 1996 with responsibilities of administering Central Government taxes as well as several non-tax revenues. Since its establishment, TRA has been preparing one set of financial statements, which reflects both revenue and expenditure performance. However, on the advice of the auditors, effective from the financial year 2008/2009, the Authority has started preparing two separate sets of financial statements one for revenue and the other for expenditure.

8.1.1 Audit opinion

During the year 2008/09, I expressed “Unqualified opinion” on both the financial statements and revenue statements of the TRA. Nevertheless, an audit Management Letter detailing the audit findings together with implications and audit recommendations for improvement was issued along with the audit opinion for the TRA’s management action.

8.1.2 Outstanding matters from the previous year report –

2007/08 As at the date of issuing my report to TRA (31st December 2009); TRA had outstanding matters amounting to


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Shs.95,784,249,724 and USD 47,954,784 relating to the previous audit reports as detailed below:

Department Amount (Shs.) Amount (USD)

Customs & Excise Dept 20,615,133,666 699,541

Domestic Revenue Dept 388,718,459 Nil

Large Tax Payers Dept 74,780,397,599 47,255,243

Total 95,784,249,724 47,954,784

Some of the outstanding matters are dating back to the financial year 2001/2002 and most of them are waiting court judgments.

8.1.3 Revenue Performance for the year 2008/09

Revenue out-turn The Revenue Accounts for Tanzania Mainland closed with an actual collection of Shs.4,174,371,105,259 against an Approved Estimates of Shs.4,600,849,900,000 resulting in an under-collection of Shs.426,478,794,741 or 9.3% of the Revenue Estimates. Either, actual collection for Zanzibar was Shs.53,877,284,997 against an approved budget of Shs. 49,220,900,000; resulting in an over-collection of Shs. 4,656,384,997 or 9.5% of the estimated revenue figure. Details of revenue collected by each TRA department-wise against the approved estimates are as tabulated below:


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Tanzania Mainland

Depart-ment (a)

Target (a) Shs.

Net Actual Collection (b) Shs.

Over/Under Collection (c) =

(b-a) Shs.

% (c/a)

Domestic Revenue

712,619,600,000 721,305,430,531 8,685,830,531 1.2

Large Tax Payers Department

1,924,465,700,000 1,657,351,355,119 -267,114,344,881 -13.9

Customs & Excise

1,963,764,600,000

1,795,714,319,609 -168,050,280,391 -8.6

Sub -total 4,600,849,900,000 4,174,371,105,259 -426,478,794,741 -9.3

Zanzibar

Department Target

(a) Shs.

Net Actual Collection

(b) Shs.

Over/Under Collection (c) = (b-a)

Shs.

% (c/a)

Domestic Revenue

19,274,800,000

19,956,155,707

681,355,707 3.5

Customs & Excise

29,946,100,000

33,921,129,290

3,975,029,290 13.3

Sub -total

49,220,900,000

53,877,284,997

4,656,384,997 9.5

The overall revenue collections trend for the two sides of the government ie Tanzania Mainland and Zanzibar over the past three years is as depicted below:

Tanzania Mainland

F/y Target (a) Shs.

Actual collection (b) Shs.

Variance (c) = (b-a)

Shs.

% (c/a)

2006/2007 2,391,516,300,000 2,640,952,121,448 249,435,821,448 10.43

2007/2008 3,426,255,700,000 3,512,810,000,613 86,554,300,613 2.5

2008/2009 4,600,849,900,000 4,174,371,105,259 426,478,794,741 -9.3


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-1,000,000,000,000

0

1,000,000,000,000

2,000,000,000,000

3,000,000,000,000

4,000,000,000,000

5,000,000,000,000A

MO

UN

T SH

S.

2006/07 2007/08 2008/09

F/YEAR

THREE YEARS REVENUE COLLECTION PATTERN - TANZANIA MAINLAND

EstimatesActual Collection

Variance


125

Zanzibar

F/y Target (a) Shs.

Actual collection (b)

Shs.

Variance (c) = (b-a)

Shs.

% (c/a)

2006/2007 23,768,000,000 30,406,105,015 4,638,105,015 18

2007/2008 36,179,800,000 39,858,524,813 3,678,724,813 10.16

2008/2009 49,220,900,000 53,877,284,997 4,656,384,997 9.5

0

10,000,000,000

20,000,000,000

30,000,000,000

40,000,000,000

50,000,000,000

60,000,000,000

AM

OU

NT

SHS.

2006/07 2007/08 2008/09

F/YEAR

THREE YEAR REVENUE COLLECTION PATTERN-ZANZIBAR

Approved Budget

Actual collection

Variance

Revenue performance over the past three years in respect of Tanzania Mainland shows gradual increase in revenue budget/estimates coupled with proportionate increased actual collections. However, performance for the year under review was below the estimates by 9.3%. TRA management attributed the shortfall with the ambitious


126

target set by the government without identifying new tax bases and the general global financial crisis. On the other hand, revenue collection in Zanzibar has been consistently improving from one year to another; with average over collection of 12.6% for the three years. However, a comparison of last year performance against the year under review, showed slight decrease in performance. Notwithstanding the above performance, it was revealed that, the whole amount of revenue collections for Zanzibar are not remitted to the Commissioner’s Bank Account although it is the duty of TRA to account for the same.

8.1.4 Tax Exemptions Shs.752,398,800,000

The TRA revenue statements reported tax exemptions of Shs 752,398,800,000 granted to various institutions as summarized below:

Institution Customs & Excise

Dept (Shs )

Domestic Revenue Dept

(Shs)

Total (Shs)

Government Institutions

21,617,300,000

21,617,300,000

Parastatal Organizations

7,125,600,000 7,125,600,000

Religious Institutions

408,000,000

408,000,000

NGOs 37,237,700,000 37,237,700,000

Donor Funded Projects (DFP)

21,552,700,000 21,552,700,000

Private Companies & Individuals

51,236,400,000 51,236,400,000

Mining Sector 59,140,700,000 59,140,700,000

Tanzania Investment Centre

380,090,500,000 380,090,500,000


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Exemptions under VAT

170,097,500,000

170,097,500,000

Exemptions under Duty Free Shops

3,892,400,000

3,892,400,000

Total 578,408,900,000

173,989,900,000

752,398,800,000

Had the exemptions of Shs 752,398,800,000 been collected, which is 18% of the actual collections, would have off set the reported under collection of 9.3% in respect of Tanzania Mainland.

8.2 Result of audit of the National Consolidated Financial Statements

8.2.1 The national Consolidated Financial Statements (CFS) are a summary of the National financial performance and contributes to a transparent and accountable government. The CFS and associated financial analysis are designed to allow readers to assess the annual financial performance and position of the Government for the period under audit.

8.2.2 Outcome of the audit The financial statements for the year under review were received on 30th October 2009 and the detailed audit findings below were communicated to the Treasury management during an exit meeting held on 17th February 2010.

8.2.3 Outstanding matters from the previous year – 2007/08

During the previous year’s audit, several recommendations were made on some key issues which required management’s necessary attention and action for improvement. Most of the issues raised were implemented except for the following matters as shown below:-


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Para

Item Audit Recomme-

ndation

Management Response

Audit Remarks

F/Y 2006/2007 5.11 Report of National

Investment Shs. 5,296,890,205,858

Management was to submit analysis of entities in which the government has invested

Analysis submitted

The submitted analysis was not signed by the Accounting Officer.

5.15 Not issuing reports of foreign currencies Accounts Shs. 43,241,392,435

The Treasury was to submit a report on foreign currencies accounts

• The Treasury has not shown in the accounts balances of all Government accounts which are controlled by BoT.

• Treasury should also provide explanations on the difference of Shs. 1,377,209,940 which should then be reconciled

F/Y 2007/2008 2.2.7 Statement of

Commitments Shs. 289,387,271,000

It was recommended to the Treasury to avoid committing funds without contractual obligations and to

Follow up on idle funds has already started to identify all outstanding commitments transferred in the deposit account

Neither feed back nor evidences on the action taken have been submitted for audit verification. We are still waiting for the outcomes of


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surrender all unutilised funds to the Exchequer Account.

Further, it was recommended to the PMG to issue a circular requiring Accounting Officers to prepare a statement showing utilization of the funds which were committed

the action taken.

2.2.9 Statement of Government Guarantees.

Management was to specify nature of the security pledged by each borrower and ensure that all issued guarantees are within the authorized ceiling.

We have communicated with the Treasury Registrar and the Commissioner for Policy Analysis for response on the issues raised.

No responses have been received on this matter to-date (Jan., 2010)

2.2.10 Statement of Outstanding Liabilities Shs. 71,283,761,000.

It was recommended to the Treasury to ensure that the reported amount of outstanding liabilities does not include an amount of commitments and also to show the type of goods

Soon the Accountant General will issue Treasury Circular that will distinguish liabilities and commitments under the cash basis IPSAS. Also, the Office of the Accountant General will provide financial

No evidence has been received showing that the training has been conducted. Details of goods and services that gave rise to the outstanding liabilities were not included in the reply.


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and services provided under those liabilities.

management training concerning that matter.

2.2.11 Foreign currency transactions not submitted to audit

Management should submit all transactions related to the bank accounts and the related reconciliation statements of the Escrow accounts for audit purposes

Lists of foreign currency denominated payments have been submitted to audit but they were not supported with relevant documents to substantiate their legitimacy.

8.2.4 Expenditure performance

(i) Supply Vote The financial performance of the Consolidated Statement of the National Accounts for the recurrent Votes accounts of the Government was as follows:-

A B C A-B B-C Approved

Estimates (Shs). Exchequer

Issues Received (Shs).

Net Expenditure (Shs).

Under Releases

(Shs)

Unspent balance

(Shs)

5,275,374,900,000

4,952,445,794,870

4,929,614,519,420

322,929,105,130

22,831,275,450

The Consolidated statement for the Recurrent Vote Account of MDAs and LGAs reflected a total expenditure of Shs. 4,929,614,519,420 against the net approved estimates of Shs. 5,275,374,900,000 resulting into under release of Shs. 322,929,105,130 equivalent to 6.12% of the approved estimates. Total exchequer issues received during the year amounted to Shs.4,952,445,794,870 against the total consolidated net expenditure of Shs.4,929,614,519,420 resulting into under expenditure of Shs.22,831,275,450.


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(i) Development Vote Account (Out–turn) During the year under audit, the financial performance of the National Accounts on the Development Vote Account was as follows: A B C A-B B-C

Approved Estimates

(Shs).

Exchequer Issues Received

(Shs).

Net Expenditure

(Shs).

Under Releases

(Shs).

Unspent Amount (Shs).

2,429,534,880,498

1,615,602,034,842 1,606,484,994,991 813,932,845,656 9,117,040,851

The Development Vote Account of MDAs and LGAs closed with a total net expenditure of Shs. 1,606,484,994,991 against the approved estimates of Shs. 2,429,534,880,498. Actual exchequer issues received by the MDAs and LGAs during the year amounted to Shs. 1,615,602,034,842 thus closing with a consolidated cash balance of Shs. 9,117,040,851 with the Paymaster General’s Account.

8.2.5 Statement of Revenue

The Consolidated Statement of Revenue as at 30th June 2009 reflected a total revenue collection of Shs. 6,427,630,892,809 against the approved estimates of Shs.7,704,909,780,498 resulting in an under collection of Shs. 1,277,278,887,689 which is equivalent to 16.58% of the revenue budget. However, the total collection reported above excludes Shs.11,793,263,803 collected from Embassies /Missions which was not captured in the Consolidated Fund. Revenue collection pattern for the past three years is as shown below:

Year 2006/2007

(Shs.) 2007/008

(Shs.) 2008/2009

(Shs.)

Estimates 4,885,449,818,000 6,160,992,762,345 7,704,909,780,498 Actual Collection

4,450,376,445,000 5,305,427,340,743 6,427,630,892,809

Under collections

435,073,373,000 855,565,421,602 1,277,278,887,689


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Recurrent revenues are the tax, non-tax, external assistance and financing from Government investment revenues while development revenues mainly come from grants, external and domestic borrowings.

8.2.6 Total Government expenditure

The table below depicts the general trend for the recurrent and development expenditures in respect of MDAs and LGAs for the financial years 2007/08 and 2008/09. Recurrent expenditures increased from Shs.3,678,013,410,000 recorded in 2007/2008 to Shs.4,929,614,519,420 recorded in year 2008/2009 equivalent to 34%, while Development expenditures increased from Shs.1,339,364,786,000 recorded in year 2007/08 to Shs. 1,606,484,993,991 recorded in year 2008/2009 equivalent to 20%.

Expenditure Account

2007/08 (Shs)

%

2008/09 (Shs)

%

Recurrent 3,678,013,410,000 73% 4,929,614,519,420 75%

Development 1,339,364,786,000 27% 1,606,484,993,991 25% Total 5,017,378,196,000

100% 6,536,099,513,411

100%

8.2.7 Statement of arrears of Revenue

The statement of arrears of revenue shows that, arrears of revenue increased from Shs.789,247,000 in the year 2007/08 to Shs.10,020,246,900 in 2008/09 equivalent to 1,170%. This suggests that sufficient efforts were not exerted in collecting all government revenues due under the year of audit.

8.2.8 Decrease in Statement of Losses Shs.465,808,849

The Consolidated Financial Statements indicates that losses incurred by the Government in terms of public monies, stores written off and claims abandoned, decreased from 3,594,208,961 during the year 2007/2008 to Shs.


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3,128,408,112 in 2008/2009, being a decrease of Shs. 465,800,849 equivalent to 13%. In the last financial year, the increase was 51.6% compared with that of the 2006/07 financial year of Shs. 2,370,688,000.

8.2.9 Statement of Commitments Outstanding

The statement of government commitments outstanding reflects an amount of Shs. 369,744,135,196 as at 30th June 2009 representing an increase of Shs. 80,356,864,196 equivalent to 28% compared to the commitments reported in year 2007/08 amounting to Shs. 289,387,271,000.

The government should refrain from creating commitments for which no funds exists. In addition, all un-utilized funds, which have not been committed, should be surrendered to Exchequer Account. We further recommend to the PMG to issue a circular to all Accounting Officers requiring them to prepare statements that will show utilization of the funds, which were committed. This will assist in easy follow up of the amounts spent from the committed funds. In addition, all unclaimed funds that have remained in the accounts for five years or more should be transferred to the Revenue Account as per Reg No. 133(1) of PFR of 2001 (revised 2004).


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8.2.10 Statement of Contingent Liabilities Shs.42,730,980,828

As at 30th June, 2009, the Government had contingent liabilities in respect of nine votes as listed below: S/No Name of the Ministry Amount Claimed

(Shs.) 1. Ministry of Healthy and Social

Welfare 857,000,000

2. Ministry of Livestock Development and Fisheries

915,307,970

3. Ministry of Tourism and Natural Resources

1,440,000,000

4. Ministry of Agriculture, Food and Cooperation

1,590,773,952

5. Ministry of Education and Vocational Training

22,779,602,062

6. Lindi Region 108,750,000 7. Dodoma Region 9,100,000 8. Prime Ministers Office 260,000,000 9. Infrastructure Development 14,770,446,844

Total 42,730,980,828 However, the nature and the related liabilities were not disclosed. Since Contingent liabilities are a hidden burden to the Government when they crystallize, the government is advised to avoid decisions that may lead to the cropping up of contingent liabilities that could otherwise have been avoided.

8.2.11 Statement of Government Guarantees Shs. 632,035,342,026.84

As at 30th June 2009, the National Accounts reported a total of Shs.626,626,810,359 being government guarantees. However, the Treasury Statement of government guarantees reported government guarantees of Shs.632,035,342,026.84 arrived at as follows:


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On average, the above table indicates that, the amount guaranteed by the Government accounted for 81% of the total loans received by the Government. Analysis given on the table above indicates that the amount borrowed by Parastatals was guaranteed to the tune of 99%, whereas for Small and Medium Enterprises, the guarantee was on the average of 47%. As for the case of Export Guarantee Fund, the amount guaranteed was on the average of 79%, whereas borrowers under refinancing facilities were guaranteed on the average of 100%. However Sec.13 (1)(b) of the Government Loans, Grants and Guarantees Act of 1974 (revised 2004) stipulates that: “…….The extent of the guarantee covered shall not be more than 70% of the amount borrowed……..”

In this situation of guarantying over and above the set limit, the Government is exposed to higher risk of incurring large amounts of money to liquidate the defaulted loans and associated servicing costs. A comparison of the reported amount by Treasury Register (TR) of Shs.632,035,342,026.84 and that of the National Accounts of Shs.626,626,810,359 differ by Shs. 5,408,531,667.84. There is a need for the two figures to be reconciled.

S/N Category of Borrower

Loan Amount Shs.‘000’

Amount Guaranteed Shs.‘000

%

1 Parastatals 454,093,169,047.12 447,987,521,547.12 99 2 Small and

Medium Enterprises

4,765,662,000

2,256,784,876

47

3 Export Credit Guarantee Fund

229,985,808,980.62

181,725,850,003.72

79

4 Refinancing Facilities

65,185,600 65,185,600 100

Total 688,909,825,627.74 632,035,342,026.84


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In addition, Sec.13 (b) of the same Act stipulates that an organization or body corporate which benefits from such guarantees should provide adequate securities to cover the loan in the event of default by such borrowers. However, we have not been provided with evidence of securities pledged by these borrowers.

Furthermore, included in the guaranteed amounts, are guarantees issued to entities some years back some of which are no longer existing.

8.2.12 Outstanding Liabilities not reported Shs.21,630,000,000

A review of the Consolidated Financial Statements revealed a total amount of Shs.107,063,198,140 reported as outstanding liabilities for the year ended 30th June, 2009. This represents 50.2% increase compared to the previous year’s reported amount of liabilities of Shs. 71,283,760,606. In addition, our review revealed government’s outstanding liabilities totaling Shs.21,630,000,000 not reported in the Consolidated National Accounts. The amount was in respect of a loan issued by BoT to the government through participating banks under the Government empowerment scheme. The moneys were then issued as empowerment loans to Tanzanian citizens. It was further noted that these funds were issued to citizens in form of loans. However, the borrowers of these loans and respective amounts outstanding against them were not recognized and disclosed in the National Consolidated Financial Statements as amounts due to the government. It was further noted that a total amount of Shs. 52,774,221,360 out of the outstanding liabilities of Shs.107,063,198,139 (as detailed below) were incurred


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through supplies of goods and services implying that there were some LPOs that were not paid at the end of the year. This being the case, all outstanding LPOs should have been included in the Statement of Commitments in their respective Votes and not in the Statement of Outstanding Liabilities since the Government operates under the cash basis system. Analysis of Government Outstanding Liabilities as on 30th June 2009 Nature of liability Amount (Shs.) Salary Areas 14,791,066,545 Unclaimed Salaries 4,734,397,027 Motor vehicle maintenance 331,281,230 Office rent 582,792,045 Supplies (Goods and Service) 52,774,221,360 Utilities 14,682,031,548 Training 762,601,070 Assets 4,597,000 Contract work 12,989,719,725 Programme 4,640,045,089 Subsidized fertilizer 770,445,500

Total Shs. 107,063,198,139 8.2.13 Government Investments Shs. 7,074,822,870,933

According to the Consolidated Financial Statements, government investments recorded a remarkable increase from Shs. 3,834,160,789,296 in the year 2005/06 to Shs.5,296,890,205,898 in year 2006/07. In year 2007/08, investments increased slightly to Shs.5,850,455,182,908 followed by a remarkable increase to Shs.7,074,822,870,933 in year 2008/09. (Ref. table below):


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Table:- Analysis of Government Investments for the Past four years 2005/2006 t0 2008/2009

Description

2005/06 (Shs) 2006/07 (Shs) 2007/08 (Shs) 2008/09 (Shs)

Foreign Organisations

848,383,740,912

833,792,464,960

709,955,580,650

931,255,007,966

National Organisations

2,985,777,048,384

4,463,097,740,898

5,140,499,602,258

6,143,567,862,967

Total investment 3,834,160,789,296

5,296,890,205,858

5,850,455,182,908

7,074,822,870,933

However, audit noted that acquisitions of these investments are not reflected in the Consolidated Cash Flow Statement specifically as cash outflows from investment activities. Further, we noted that the reported amount may not include all government investments as there are 23 institutions whose accounts were not made available for audit review. Also, some of the institutions’ accounts used were either not of the financial year under audit or the Treasury Registrar’s Statement of Government Investments and Public Interest may not have been updated to reflect the correct position of the government’s share holdings for the year under audit.

8.2.14 Increase in Public Debt Shs.1,143,834,887,616

The Consolidated Financial Statements shows that the public debt has increased by 17.66% from Shs. 6,477,451,842,417.72 in 2007/08 to Shs. 7,621,286,730,033.80 in 2008/09 as shown in the table below:


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Table: Trend of the Public Debt for 2007/2008 and 2008/2009

F/y Domestic Debt (Shs) Foreign Debt (Shs) Total (Shs)

2007/2008 1,875,794,357,188.34 4,601,657,485,229.38 6,477,451,842,417.72

2008/2009 2,234,640,367,491.17 5,386,646,362,542.62 7,621,286,730,033.80

Increase 358,846,010,302.80 784,988,877,313.24 1,143,834,887,616.08 Percentage Increase 19.14 17.59 17.66

The table above indicates that during the year under review, the domestic debt increased by Shs. 358,846,010,302.80 equivalent to 19.14% from the previous year’s balance of Shs. 1,875,794,357,188.34. On the other hand, foreign debt increased by a total of Shs.784, 988,877,313.24 equivalent to 17.59% from the previous years’ reported balance. Generally, there was an overall increase of Shs. 1,143,834,887,616,08 from the previous year’s total National Debt Balance.

Percentage increase in domestic debt is relatively higher than that of the foreign debt; however, in terms of total amount borrowed during the year, the Government borrowed more from foreign institutions than from domestic ones. This situation implies that more payments will be made to foreign investors than to domestic ones and thus more capital flight to foreign financial institutions.

8.2.15 Foreign Currency Transactions not subjected to Audit We requested to be availed with expenditure particulars and related documents for the financial year under review in respect of the bank accounts shown below. However, up to the time of concluding our audit, the requested particulars together with the relevant foreign currency transactions involving these banks were not submitted for audit review. • MDRI • Paris Club • Escrow Accounts • HIPIC


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Transactions related to these bank accounts could not be subjected to audit review and their correctness could therefore not be confirmed.

8.2.16 Road Fund Collection Review

Audit review of the Road Fund reports has revealed that a total of Shs.255,563,765,111 was collected during the financial year 2008/09 as Road Funds by TRA as shown below:

F/y Fuel Levy (Shs) Transit Charges (Shs)

Over loading Fees (Shs)

Total (Shs)

2008/09

246,116,219,399

2,974,667,387.78

6,472,878,323

255,563,765,110

The Road Fund Account opened with a balance of Shs. 10,517,000,000 being unspent amount from the previous financial year, together with funds received during the year of Shs. 248,684,905,829 thus making a total of Shs. 259,201,905,828.77 available for utilization for the year under audit. A sum of Shs. 248,684,905,829 out of the total amount of Shs. 255,563,765,110.50 collected was remitted to the Treasury by TRA and TANROADS thus leaving a total of Shs. 6,878,859,281.73 yet to be transferred as at 30th June 2009. Further, during the year, a total of Shs. 218,474,400,000 was transferred to the Road Fund Board (RFB) and PMORALG by the Treasury, being 85.48% of the total collections for the year; thus leaving Shs. 40,727,505,828.77 as unspent balance as at 30th June 2009 with the Exchequer Account. General financial performance of the Road Fund for three consecutive financial years are as follows:


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F/Y 2006/07 (Shs) 2007/08 (Shs) 2008/09 (Shs) Estimates 89,018,200,000 221,343,500,000 260,805,000,000 Actual Collections

100,426,267,992 200,144,560,000 248,684,905,829

Over/Under Collections

(11,408,067,992) 21,199,000,000 12,120,094,171

8.2.17 Expenditure above approved budget Shs. 67,412,110,917

Audit examination of the consolidated accounts and submitted financial reports from MDAs revealed total payments made to Ministries, Departments and Regions amounting to Shs. 67,412,110,917 for the procurement of Supplies and Consumable Goods, Current Purchase/Construction of Non Current Assets Transfers and Subsidies made over and above the approved budgets. It was further noted that, there were no explanations in the submitted financial statements to justify the noted variances between budgeted amounts and actual amounts spent.

8.2.18 Understatement of the Consolidated Financial

Statements Shs.2,194,266,087

Audit review of the Consolidated Financial Statements noted a total amount of Shs. 60,785,393,624 reported as ending cash balance as 30th June 2009. We however, noted understatements of Shs. 2,194,266,087 between the consolidated accounts and individual MDAs and LGAs cash balances with the PMG’s account at the BOT.

8.2.19 Difference between Exchequer Issues on the supply and

Development Votes Shs.371,244,515,827 Audit review of the Consolidated Financial Statements revealed that, total Exchequer Issues to MDAs and LGAs in respect of the recurrent account exceeded total Exchequer Receipts received from the Treasury by Shs.


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334,905,843,835 and for the development account were less by Shs. 36,338,673,983 resulting to a net effect of Shs. 371,244,515,827. This means that the total annual payments from the exchequer account was more than the amounts receipted by MDAs and LGAs as summarised below:

Statement Recurrent (Shs) Development (Shs) Total (Shs) Amount as per the Statement of Exchequer Issues

4,952,445,794,870

1,615,602,034,842

6,568,047,829,712

Amount as per the statement of Cash Receipts and Payments

4,617,539,951,032

1,579,263,360,853,

6,196,803,311,885

Difference 334,905,843,835 36,338,673,983 371,244,515,827

We thus still insist that management should reconcile the difference between amounts issued from the Exchequer Account with those received by MDAs and LGAs in both the recurrent and development accounts.


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8.2.20 Bank overdraft Shs. 868,807,356,460

Audit examination of the Consolidated Statement of Cash Receipts and Payments for the financial year ended 30th June 2009 noted that, the Exchequer Account closed with an overdraft of TShs.868,807,356,459.98 as certified by BOT vide letter Ref. No. EA.4/263/03 of 18th January 2010. We were not informed of the reasons leading into the bank overdraft since the Government operates on a cash basis of accounting system.


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CHAPTER 9

REPORT ON PRE-AUDIT OF TERMINAL BENEFITS FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2009

Pre-audit of terminal benefit payments is carried out by virtue of the provisions of Article 143 of the Constitution of the United Republic of Tanzania (URT) 1977 and Sect 29 of the Public Audit Act No. 11 of 2008. Sect 5 (a) of the same Act requires the Controller and Auditor General to authorize the use of money paid out of the Consolidate Fund upon being satisfied that Article 136 of the Constitution has been or shall be complied with. It is thus essential to pre-audit all individual payments of the Government which can not easily be forecasted and appropriated such as terminal benefit payments.

9.1 Purpose of the pre-audit

The purpose of this audit is to observe the accuracy of terminal benefits payments to enable early detection of errors with the intention of ensuring that the retirees are being paid what they deserve. This is also made necessary, taking into account that, any wrongly paid terminal benefits may not be easily recovered from retirees. On the other hand, I have to ensure that the applicable pension laws, regulations, working policies in relation to public service, correspondences, and schemes of service salary structures are complied with.

Pre-audit coverage The findings and recommendations contained in this report, do not cover civil servants whose terminal benefit payments are processed and paid by the Public Service Pension Fund (PSPF). The pre-audit functions done by my office are terminal benefit payments involving:-


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• Civil Servants, Military Officers and Men, Teachers, and Intelligence Officers.

• Contract payments for Political leaders, Non citizens and re-appointed retired officers.

• Compassionate gratuity for non pensionable Civil Servants, and

• Gratuity for Rank and file Police Soldiers.

9.2 Detailed findings and recommendations

9.2.1 Out-turn

During the year under audit - 2008/09, the office started the pre audit exercise with 110 files on hand brought forward from the previous year - 2007/08. For the year under review, a total of 5,130 retirees’ files were submitted for examination out of which 5,203 files were examined, 356 were returned to the respective Accounting Officers requiring amendments, and 37 files were still under examination as at 30th June, 2009 as summarized below and further elaborated in Annexure VI.

Details Files Balance on 1st July, 2008 110 Received during the year 5,130 Available for audit 5,240 Examined 5,203 Balance on 30th June, 2009 37

9.2.2 Over /under calculation of terminal benefits Some pension paper files submitted for pre-audit were noted with over/under calculation of terminal benefit payments. Out of the 5,203 pension files examined, 191 files were noted to be overstated by a total amount of Shs.410.092,594.55 and 163 files were noted to be understated by a total amount of Shs.221,021,681.85 as analyzed below:-


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(i) Overstated amounts

No Details No. of cases Amount (Shs) 1 Period

overstated 134 318,548,883.75

2. Wrong

calculations 17 26,789,923.15

3. Overstated salaries

40 64,753,787.60

Total Shs. 191 410,092,594.45

(ii) Understated amounts

No Details No. of

cases Amount (Shs)

1 Period understated 70 49,597,625.13

2. Wrong calculations 38 80,834,164.83

3. Understated salaries

55 90,590,491.91

Total 163 221,021,681.85

The state of affairs above, would have given rise to a total loss of Shs.410,092,594.55 to the Government and pensioners would have suffered a total underpayment of Shs.221,021,681.85 if these pension payments had been paid without being subjected to pre-audit.

9.2.3 Problems encountered during the year under audit

During the year under audit, my Office encountered the following types of problems:- • Operational problems • Misinterpretation of the relevant pension laws,

regulations and related laws • Administrative problems


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• Using wrong salary as a basis of calculating terminal benefits payments

• Combining pensionable terms and contract terms • Conflicting resolutions by some civil servants which

contravenes pension laws • Non compliance with pension laws • Delay in submission of pension papers for audit • Incomplete documentation

(i) Using wrong salary as a basis of calculating terminal

benefits payments Pension laws require the basis of salaries in calculating terminal benefit payments to be the last salary before retirement and also using salaries applicable to the respective office. It has been noted that, some employees during their employment, were appointed to work outside the public service e.g. in Parastatal organizations or appointed to political posts receiving salaries personal to themselves which are not applicable in computing terminal benefits payments.

(ii) Double terminal benefit claims (Pension plus

contract benefits) Some public officers, during their pension service period were appointed to different posts under contract terms and at the same time maintaining their pensionability status. At the time of retirement, these employees may have been paid double terminal benefits i.e. contract gratuity and pension for the same period of service. This is contrary to the pension laws which restrict double terminal benefits. (iii) Combining pensionable terms and contract terms

Employees under contract terms were registered by the Public Servants Pension Fund as pensionable officers. Contrary to the pension laws regulations For example authorizing a retiree to be paid terminal benefits basing on the prevailing pension laws instead of the repealed ones


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(iv) Non compliance with pension laws We noted cases whereby some employees who were seconded or attached to different institutions force their terminal benefits to be governed by laws governing terminal benefits under those institutions while that is not appropriate. (v) Delay in submission of pension papers for audit Pension laws require pension papers to start being processed 6 months before the retirement date. This process is aimed at paying retirees on the retirement date. To the contrary, most of terminal benefit papers are received late after months or years after the retirement date. (vi) Incomplete documentation Despite of the delay as discussed above, a huge number of pension papers were submitted for audit with inadequate documentation which cannot adequately support payments ascertainment, and therefore require the remaining documents to be submitted. (vii) Weaknesses in terminal benefit processing

In general, the above encountered problems were mainly attributed to processing weaknesses by processors who failed to comply with governing terminal benefit laws and guidelines. Although the same problems were reported in my previous report the same were still persisting for the year under audit.

I wish to thank all those who have enabled my office accomplish the pre-audit exercise and also wish to remind Accounting Officers to ensure that, before submitting terminal benefit papers to me for pre audit, they should to ensure completeness and accuracy of the submitted papers


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supported by relevant documents and should be in conformity with the relevant pension laws and regulations.

9.3 The way forward

The Treasury and other government key players involved in the initial preparation of pension papers should initiate the preparation process of pension payments six months before an employee retires to give room for the pre audit exercise by my office and payments to be effected by the Treasury. On the other hand, all players dealing in issuing directives preparation and payments should ensure that, pension laws are adhered to and the anomalies pointed out in this chapter, are acted upon with a view of ensuring early preparation of pension papers and timely payment of beneficiary terminal benefits, preferably, retirees to receive their dues on the retirement date.


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CHAPTER 10

CONCLUSION AND RECOMMENDATIONS

10.1 Conclusions The Regularity Audit Manual in use at the office adopted 3 years ago, requires our audit to include risk assessment, payroll and IT audits. In actual fact the audit done by my office currently through the adoption of the Regulatory Audit Manual is what is known as comprehensive audit. Comprehensive audit refers to that public sector audit which goes beyond the audit of financial statements of the audited entity. In order for my office to be able to effectively undertake comprehensive audit in the public sector, its operational capacity urgently needs to be substantially enhanced. In the coming years, it is the intention of the office to perfect the system and widen the audit scope in such a manner as to continue to effectively enhance accountability of the use of public resources in the country. The capacity of my office will be enhanced in terms of training, increased number of qualified staff, increase office accommodation so as to meet the growing challenge arising from the modernization of the audit function. During the course of my audit I worked very closely with all stakeholders including the Parliamentary Oversight Committees ie. PAC, LAAC and POAC whose recommendations are part of my concluding remarks.

Inputs from our auditees regarding quality and improvement of this report were also taken into consideration. Contributions in terms of ideas and challenges from other stakeholders cannot be overemphasized.


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The outcome of this working cooperation is the timely submission of this General report to His Excellency the President of the United Republic of Tanzania (URT) Dr. Jakaya Mrisho Kikwete who will cause it to be tabled in Parliament. Remarkable improvements have been noted this year in terms of the overall financial reporting in the sense that all the audited accounts were prepared and presented in accordance with the requirements of the International Public Sector Accounting Standards (IPSAS) – cash basis of accounting. This is the second year the Accountant General has prepared the Government’s accounts based on IPSAS s cash accounting basis. However, the fact that financial statements of MDAs/RAS/Embassies/Missions showed substantial amounts of outstanding liabilities and commitments, this defeats the requirements of preparation of financial statements which are in compliance with IPSAS - cash accounting basis. The outcome of the audit of the financial statements for MDAs/RAS and Missions/Embassies in the year 2008/2009 has shown that there has been an increase in Unqualified Opinions from 73% in the financial year 2007/2008 to 88% in the financial year 2008/2009. Qualified Opinions have decreased from 26% in the financial year 2007/2008 to 8% in the financial year 2008/2009. Adverse Opinion have increased from 1 (1%) in the financial year 2007/2008 to 3 (3%) in the financial year 2008/2009. The above outcome was a result of widening the scope of audit in terms of coverage and an indicator of inadequate financial management and control, including inadequate concentration in implementing my recommendation which leads into them being issued with Adverse Opinion. Analysis of audit results revealed that out 73 MDAs and RAS audited, sixty four (64) or 88% were issued with Unqualified


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opinion with emphasis of matters, while nine (9) or 12% of all MDAs/RAS were issued with Qualified opinion. Two (2) votes and one (1) Embassy constituting 3% of MDAs performed badly and accordingly were issued with Adverse opinions. These are the Ministry of Natural Resources and Tourism (Vote 69), Regional Administrative Secretariat – Lindi (Vote 76) and Tanzania Embassy in Brussels (Sub Vote 2019) The status of audit opinions for Embassies/Missions revealed that eight (8) or 25% were issued with Unqualified opinion without emphasis of matter while fourteen (14) or 43.7% were issued with Unqualified opinion with emphasis of matter. One (1) or 3% of the Embassies/ Missions which performed badly was issued with an Adverse opinion. This is Tanzania Embassy in Brussels – Belgium (Sub Vote 2019) There has been improvements in dealing with questionable payments whereby in the year 2007/2008 a total of Shs.10,056,706,649 involving 14 MDAs/RAS as compared to Shs. 2,130,565,329 involving 9 MDAs/RAS queried in the year under review as shown on the table below:

Financial Year Amount (TShs) MDAs/RAS involved 2007/2008 10,056,706,649 14 2008/09 2,130,565,329 9

There has been significant improvement on the quantum of deferred payments queried whereby in the year under review only a total of Shs.521,930,413 was questioned as compared to Shs. 2,437,427,510 questioned in year 2007/2008 as shown on the table below:

Financial Year Amount (TShs) MDAs/RAS involved

2007/2008 2,437,427,510 8 2008/2009 521,930,413 8


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Revenue collected by TRA for the past two years of 2006/2007 to 2007/2008 has indicated a remarkable increase as shown in Chapter 8 Para 8.2.5. However, total government revenue collection for the year under review has shown under collection of Shs.1,277,278,887,689 (16.58%). In addition, there were tax exemptions granted by the Government during the year under review amounting to Shs. 752,398,800,000 which would have reduced the amount under collected to Shs.524,880,087,689 if the tax exemption had not been granted.

In addition, our review of the National Accounts for the year under review revealed government’s outstanding liabilities totaling Shs.21,630,000,000 not reported in the Consolidated National Accounts. The amount was in respect of a loan issued by BoT to the government through participating banks under the Government empowerment scheme. The moneys were then issued as empowerment loans to citizens. It was further noted that these funds were issued to citizens in the form of loans. However, the borrowers of these loans and respective amounts outstanding against them were not recognized and disclosed in the National Consolidated Financial Statements as amounts due to the government. Procurement is a dominant activity in Central Government which takes a substantial part of Government expenditure which is between 70% to 80%. Considering the magnitude of the funds that goes into procurement and looking at the extent of non compliance with procurement laws that audit tests found, it is obvious that MDAs/RAS have not got to the point of effectively managing procurements. Ineffective management of procurements in its broad sense means conducive environment for losses, misappropriations, corruption and poor performance of procurement contracts as pointed out in this report.


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Pre-audit of terminal benefits is one of my responsibilities of the controllership of public resources. From the matters I have reported in this report, I conclude that arrangements of paying terminal benefits to retirees are still inefficient. There is significant non compliance to laws governing terminal benefits and use of inaccurate information in arriving at the payable terminal benefits.

Regarding audit of donor funded projects during the year under review, audit of TASAF and the Water Sector were conducted in all the Local Councils and separate reports and management letters issued to the management of the respective Councils. In addition, audits of the Agriculture Sector Development Programme, Basket Fund and Global Fund are in progress and matters arising from these audits will be reported separately.

According to the statement of performance submitted along with the financial statements on the National Debt, we observed that during the year under review, the Government increased both its Domestic and Foreign Debts by Shs.358,846,010,303 (16%) and Shs.784,988,877,313 (14.6%) respectively, implying expansion of the Government activities which corresponds positively with the growth of the economy.

10.2 Recommendations (i) Review of revenue retention schemes Revenue collection in our Embassies/Missions should clearly be controlled by the Ministry of Finance and Economic Affairs including restatement of the retention rates. In this regard, I strongly urge the PMG to comply with Article 135 of the Constitution of the URT (1977) and Sect.11 of PFA 2001 (revised 2004) which requires all public revenues to be credited to the Consolidated Fund.


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(ii) Liabilities and Outstanding Commitments Shs.1,637,290,544,945

During the year under review, the Government incurred liabilities and commitments aggregating to Shs.1,637,290,544,945 which includes Public Debt of Shs.1,143,834,887,616 and other liabilities and commitments amounting to Shs.493,455,657,329 pertaining to the supply of goods and services and employee benefits. The fact that these liabilities and commitments existed during the year under review defeats the government’s IPSAS - cash basis reporting framework and the government’s cash budgeting system. Spending beyond the approved limit is illegal and therefore calls for disciplinary actions against Accounting Officers who fail to comply with the government’s cash budget system.

• The government should refrain from creating

commitments for which no funds exists. In addition, it is high time for the government to consider imposing stern measures to Accounting Officers who fail to comply with the requirements of the cash budget system.

• The outstanding liabilities totaling Shs.21,630,000,000

should be recognized in the National Accounts.

(iii) Mismanagement of Government Properties Most of the offices and residential houses of most of our Embassies are in terrible conditions. Others are almost abandoned eg. Lusaka, Cairo, Kinshasa and Maputo. The situation of these offices/houses is so bad that one wonders as to who or which Ministry/Department of the Government is responsible for these Government properties? Is it the Ministry of Foreign Affairs and International Cooperation, is it the Ministry of Infrastructure Development or is it the Tanzania Building Agency? I think it is important for the Government to clearly


157

assign responsibility of these houses to an entity which should be held responsible for their upkeep.

In addition, the Government has spent millions of Tanzania shillings for procurement of Visa sticker machines which are not in effective use by most of our Embassies/Missions which indicates that the Government has not realized value for money from these important sticker machines. (iv) Underfunding of Embassies/Missions Exchequer issues released by the Ministry of Foreign Affairs and International Cooperation to the Embassies/Missions are not sufficient to finance costs for recurrent and development expenditure inspite of this Missions/Embassies being allowed to retain and use own source generated revenues. In accordance to Article 135 of the Constitution of the URT 1977 (revised 2005) all government revenues shall be paid to the Consolidated Fund. Therefore, the instruction by the Permanent Secretary Ministry of Foreign Affairs and International Cooperation to transfer retention funds from one Embassies/Missions to another without the consent of PMG is illegal. All revenue collected in the Embassies/Missions should be paid to the Consolidated Fund. Funding of Embassies/Missions should strictly be in line with the Appropriation Act. (v) Updating the Foreign Services Staff Regulations

1979 There is an urgent need to update the Foreign Services Staff Regulations, 1979 Part I and II to suite the current situation. (vi) Ownership of land and buildings Land and buildings owned by Tanzania Embassies/Missions in London, Nairobi and Maputo do not have title deeds.


158

Based on the audit findings, in order to have a stronger control of the educational expenditure management and push forward the development of the educational undertaking, we make the following recommendations to the Government.

(vii) Strict financial discipline should be enforced The financial management of the Education Sector as well as the secondary and Primary schools should be reinforced. Acts violating the regulations including the seizing and misusing of the educational expenditures should be seriously handled.

(viii) Measures to eradicate nuisance contributions • Strict follow up measures should be instituted by the

government and ensure that nuisance contributions and similar practices are not allowed to continue since they put more burden on parents.

• The government should ensure there is strict control

over expenditure of which no budget exists. In addition, there should be adequate funds allocation for the education sector.

• Requirement for adequate teaching staff should be

expedited • The Ministry should strictly abide by the decision and

requirements of Local Authorities and the President’s Office - Public Service Management which is responsible for determining the required number of teachers and other staff in line with the requirement of education sector.

• The Governments’ intervention is of paramount importance in ensuring availability of approved funds for the Ministry of Energy and Minerals. This sector for instance is a major driver of economic growth in the country. The importance of this sector is clearly manifested by the power crisis that our country went


159

through from 1995 todate, which saw a remarkable increase in the cost of production and a downfall in the industrial output.

• Timely release of funds to the Ministry of Energy and

Minerals need to be given due consideration. Untimely release of funds by the Ministry of Finance at the end of the Financial year as indicated below should be discouraged:

(ix) Preparation and compliance with annual procurement plan

If the need to prepare procurement plan will be properly addressed by providing appropriate training and by closely monitoring implementation of the annual procurement plans, there will be automatic improvement in areas such as obtaining compulsory approvals in the procurement processes, advertising of bid opportunities, providing adequate time for bidders to prepare bids, and applying appropriate methods of procurements. These areas are supposed to be part and parcel of the annual procurement.

• It is recommended that in the next financial year more resources should be allocated in order to focus on contracts management issues. In addition, PPA general training should also focus on this area.

• It is recommended that staff in the PMUs should be trained on records management. In addition, the guideline on how procurement records should be kept (which is under preparation by PPRA) should be disseminated to PEs.

Year Exchequer release No

Amount Date Released

Remarks

2007/2008 No.58/EB/AG/159/071/516

180,000,000 20/6/2008 10 days to close the Financial Year

2008/2009 No.58/EB/AG/159/08/606

7,500,000,000 25/6/2009 5 days to close the Financial Year


160

(x) Tax exemption The Government to review its tax exemption policy with a view of narrowing down the scale of exemptions to a minimum tolerable level that is essential for the public interest. In addition, TRA should rigorously review the revenue collection budget with a view of making it more realistic.

• In spite of the legal right of taxpayers to seek justice

through courts, TRA management should consult the Attorney General and the Chief Justice to ensure that all matters pertaining to Taxation are channeled through the Tax Appeals Board and in case of referrals to the High Court-Commercial Court as these are the most competent in Tax issues.

• The internal check system of TRA needs to be strengthened to ensure all tax returns and payments are well scrutinized to improve revenue collections and avoid loopholes that may cause losses or misuse of public funds.

• TRA should look for a possibility of broadening the tax base by incorporating the informal sector.

• The Government should make a thorough study and identify reasons for failure to meet annual collection targets and thereafter, in collaboration with TRA devise measures that will alleviate the situation.

• Since Embassies/Missions are allowed by law to retain revenues they collect to offset budget deficit, I therefore recommend to the Government that the remaining balance of revenue should be remitted to the Paymaster General’s account and Consolidated in the revenue statement.

• Transfers of revenue collections from Consulates should be controlled by the Ministry of Finance and Economic Affairs.

(xi) Umoja bridge

• There is an urgent need to establish the necessary infrastructure at the bridge. We need a police post, customs, immigration services at the bridge. For a start, there is an office building and staff quarters adjacent to


161

the road which were used by the contractors which could temporarily be used as the base from which the above mentioned services could be provided from.

• To maximize the use of the bridge, the two governments

should endeavor to look for financing of the tarmac road from the bridge to the Masasi – Tunduma road (about 70 km stretch) and to the nearest District Headquarters in Mozambique (about 165 km stretch). This will ease accessibility to the bridge and encourage more users of the bridge.

• Since the construction cost of the bridge of over USD 27.0

million has been financed purely by the two governments, and since it is very likely that the majority of motorist users of this bridge are not going to be citizens of the two countries, there is need to introduce a user charge by all motorists crossing the bridge by establishing a road toll point at the bridge.

• There is an urgent need of the two governments sitting

down and agreeing on how to manage and operationalize the bridge. This could include the establishment of a joint committee or Commission to oversee the operations and maintenance of the bridge. It should also be agreed to establish a joint account to be financed either by contributions from the two governments or by the user charges charged on those motorists crossing the bridge. These funds will be used to pay for the maintenance costs of the bridge.

• Of the two sides of the bridge, the Tanzania side is more

lively and more promising. The leadership of the Nanyumbu District should be urged to mobilize potential investors and invest in the area to make it more accommodating and therefore take advantage of the users of the bridge.


162


163

ANNEXURE I

Analysis of MDAs Opinions in financial years 2007/08 and

2008/2009 Vote Name of MDA Type of Opinion Issued 2007/08 2008/2009 14 Fire and Rescue Force

Department N/A Qualified

16 Attorney General’s Chamber N/A Unqualified 20 President Office – State

House Unqualified Unqualified

21 Treasury N/A Unqualified 22 Public Debt Unqualified Qualified 23 Accountant General’s

Department Unqualified Unqualified

25 Prime Minister’s Office Unqualified Unqualified 26 Vice President’s Office Unqualified Unqualified 27 Registrar of Political Parties Unqualified Unqualified 28 Police Force Department Qualified Unqualified 29 Prison Service Department Unqualified Unqualified 30 President Office and Cabinet

Secretariat Unqualified Unqualified

31 Vice President’s Office Unqualified Unqualified 32 Public Service Management Unqualified Unqualified 33 Ethics Secretariat Unqualified Unqualified 34 Foreign Affairs &

Int.Cooperation Unqualified Unqualified

37 Prime Minister’s Office Unqualified Unqualified 38 Ngome Unqualified Unqualified 39 National Service Unqualified Unqualified 40 Judiciary Unqualified Unqualified 41 Justice and Constitutional

Affairs Unqualified Unqualified

42 Office of the Speaker Qualified Unqualified 43 Agriculture and Food

Security Qualified Un qualified

44 Industry Trade and Marketing

Unqualified

Unqualified

46 Education and Vocational Qualified Unqualified


164

Training 48 Lands and Human

Settlement Unqualified Unqualified

49 Ministry of Water Unqualified Unqualified 50 Ministry of Finance Unqualified Unqualified 51 Ministry of Home Affairs Qualified Qualified 52 Ministry of Health Unqualified Unqualified 53 Community Dev, Gender and

Children Qualified Unqualified

55 Commissioner for Human Right s

Unqualified Unqualified

56 PMO –RALG Unqualified Unqualified 57 Defence and National

Service Unqualified Unqualified

58 Ministry of Energy and Mineral

Qualified Unqualified

59 Law Reform Commission Unqualified Unqualified 60 Industrial Court Adverse Unqualified 61 National Electoral

Commission Unqualified Unqualified

64 High Court Commercial Court


65 Labour and Youth Development


66 Planning, Economy and Empowerment


68 Higher Education, Science and Technology

Unqualified Qualified

69 Ministry of Resources and Tourism

Qualified Adverse

90 High Court Land Court Division

Qualified Unqualified

91 Commission for Prevention of Drugs


92 Tanzania Commission for AIDS


93 Immigration Services Department

Adverse Qualified

94 Public Service Commission Unqualified Unqualified 96 Information, Culture and

Sports Unqualified Unqualified

97 East African Cooperation Qualified Unqualified


165

98 Infrastructure Development Qualified Unqualified 99 Ministry of Livestock

Development Qualified Unqualified

70 Arusha Unqualified Unqualified 71 Coast Unqualified Unqualified 72 Dodoma Qualified Unqualified 73 Iringa Unqualified Unqualified 74 Kigoma Unqualified Unqualified 75 Kilimanjaro Unqualified Unqualified 76 Lindi Qualified Adverse 77 Mara Unqualified Unqualified 78 Mbeya Unqualified Unqualified 79 Morogoro Unqualified Unqualified 80 Mtwara Qualified Unqualified 81 Mwanza Qualified Unqualified 82 Ruvuma Qualified Unqualified 83 Shinyanga Unqualified Unqualified 84 Singida Unqualified Unqualified 85 Tabora Qualified Unqualified 86 Tanga Qualified Unqualified 87 Kagera Unqualified Unqualified 88 Dar es Salaam Unqualified Unqualified 89 Rukwa Unqualified Unqualified 95 Manyara Unqualified Qualified


166

Annexure II

MDAs with unqualified Opinion without emphasis of matters

(i) President’s Office – State House – Vote 20 (ii) President’s Office – Cabinet Secretariat – Vote 30 (iii) Vice President’s Office – Vote 31 (iv) Prime Minister’s Office (v) Ethics Secretariat (vi) Prime Minister’s Office (vii) Labour Court – Vote 60 (viii) Commercial Court (ix) Drugs Control Commission

Annexure III

Outstanding matters of previous years’ Audit 2007/2008 2008/2009 Vote

Ministry/Indepe-ndent Dept/Region

JPY Shs. JPY TShs USD

22 Public Debt and General Services

657,297,268,712 662,771,902,567

2,100,000

23 Accoun-tant General’s Depart-ment

958,476,612 0

26 Vice President’s Office

0 0

28 Police Force

23,006,894,235 29,598,445, 103

29 Prison Service Depart-ment

8,557,606,793 1,188,600,129

32 Public Service Manage-ment

0 254,110,486

34 Ministry 209,900,000 6,105,595,013


167

of Foreign Affairs and Interna-tional Coopera-tion

37 Prime Minister’s Office

1,383,210,994 1,304,084,447

38 Ministry of Defence and National Service (Ngome)

0 264,581,124

39 National Service

954,745,087 574,975,820

40 Judiciary 609,468,772 4,365,155,732 41 Ministry

of Constitu-tional Affairs and Justice

35,970,523 5,928,920

42 Office of the National Assembly

4,264,701,311 1,219,080,641

43 Ministry of Agricu-lture and Food Security

0 5,297,000

44 Ministry of Industry Trade and Marketing

129,063,000 548,255,080

46 Ministry of Education and Vocational Training

1,242,586,802 604,803,370

48 Ministry of Land

236,988,525 2,512,752,183

49 Ministry of Water

1,796,773,904 2,175,945,608

50 Ministry 17,139, 263,211,606,702 17,089, 252,203,515,


168

of Finance and Affiliated Bodies

499,858 499,858 073

51 Ministry of Home Affairs

4,577,860,148 2,235,000,000

52 Ministry of Health and Social Welfare

39,069,800 566,469,754

53 Ministry of Commu-nity Develo-pment Gender and Children

253,444,406 19,234,540

57 ministry of Defence and National Service

7,568,619,817 6,768,619,817

58 Ministry of Energy and Minerals

53,001,303 58,503,421,420

65 Ministry of Labour Emplo-yment and Youth Develo-pment

0

69 Ministry of Natural Resources and Tourism

192,330,868 2,266,745,361

93 Immigration Service

48,673,383,426 11,830,811,510

94 Public Service Commi-ssion

459,294,956 0

96 Ministry 33,097,500,807 0


169

of Culture Informa-tion and Sports

98 Ministry of Infrastru-cture Develo-pment

51,323,988 0

99 Ministry of Livestock Develo-pment and Fisheries

1,216,100 0

92 Tanzania Commi-ssion for Aids

16,030,000 0

70 Arusha 4,422,000 0 71 Coast 7,395,000 28,272,388 72 Dodoma 0 1,708,174,000 73 Iringa 4,767,254 4,067,254 74 Kigoma 8,863,090 0 75 Kilimanjaro 105,319,138 29,807,200 76 Lindi 40,668,159 2,205,056,733 78 Mbeya 18,922,426 224,463,720 80 Mtwara 232,195,322 700,232,844 81 Mwanza 125,490,563 64,822,375 82 Ruvuma 178,957,361 9,800,000 83 Shinyanga 18,747,766 69,327,233 85 Tabora 0 748,245,785 86 Tanga 689,377,175 982,511,571 89 Rukwa 3,027,570 1,206,220 95 Manyara 648,099,294 791,284,523 Sub Total

Grand Total

17,139,499,858 1,036,225,348,815 17,089,

499,858 1,055,460,602,

544 2,100,000


170

ANNEXURE IV(A)

COMPARISON OF ACTUAL RELEASE AGAINST ACTUAL

EXPENDITURE FOR FINANCIAL YEAR 2007/2008 AND 2008/2009

SUPPLY VOTE – MINISTERIAL VOTES

VOTE NAME ACTUAL FUNDS

RELEASED ACTUAL SPENT

FUNDS RELEASED FUNDS SPENT

2007/08 2007/08 2008/09 2008/09 SHS SHS (SHS) (SHS)

14

FIRE AND RESCUE FORCE DEPARTMENT - - 3,729,099,044 3,729,099,044

16

ATTORNEY GENERAL’S CHAMBER - - 9,734,303,051 9,731,700,895

20 STATE HOUSE 5,891,233,000 5,891,130,164 6,591,007,000 6,591,002,475.25

21 Treasury - - 361,040,689,886 360,607,833,172

22

PUBLIC DEBT & GENERAL SERVICES 561,123,561,140

561.123,561,409

682,296,992,996 640,132,024,378

23

ACCOUNTANT GENERAL’S DEPARTMENT 91,958,999,539 91,949,319,988 106,659,387,952 106,607,172,673

25

PRIME MINISTER’S OFFICE 3,326,718,300 3,324,200,000 3,449,303,850 3,437,896,748

26

VICE PRESIDENT’S OFFICE 3,057,650,060 3,057,650,059.27 2,533,642,875 2,521,146,795

27

REGISTRAR OF POLITICAL PARTIES 18,167,289,000 18,158,502,270 19,959,117,370 18,337,028,775

28 POLICE FORCE 138,583,000,000 138,534,000,000 165,815,529,407 165,815,529,407

29 PRISONS SERVICES 68,240,802,948

68,113,555,31077,393,121,102 77,393,121,102

30

PRESIDENT’S OFFICE & CABINET SECRETARIAT 130,892,608,003 130,892,066,425

163,503,963,908163,503,038,708

31

VICE PRESIDENT’S OFFICE 36,209,074,257 36,206,890,137.80 36,640,673,258.00 35,130,346,613.00

32

PUBLIC SERVICE DEPARTMENT 14,245,759,102 14,245,566,268 13,139,395,000 13,139,395,000

33 ETHICS SECRETARIAT 1,239,454,000.00 1,239,453,201.00 1,646,680,980 1,644,771,318

34

FOREIN AFFAIRS & INTERNA-TIONAL COOPERATION

79,263,648,037

79,263,646,580 78,439,303,573 78,439,303,535


171

37

PRIME MINISTER’S OFFICE 11,695,070,000 11,685,380,000 17,348,818,571 17,325,090,864

38

MINISTRY OF DEFENCE AND NATIONAL SERVICE 207,624,284 207,624,284 257,515,558,775 257,515,558,775

39 NATIONAL SERVICE 46,495,940,000 46,494,760,000 57,171,163,767 57,170,862,678

40 JUDICIARY 36,999,606,147 36,987,766,082 4,680,909,400 4,680,909,400

41

JUSTICE & CONSTITUTIONAL AFFAIRS 7,688,834,343 7,688,438,712 5,332,603,230 5,439,966,328

42 OFFICE OF THE SPEAKER 46,009,940,000 45,755,780,000 56,423,472,677 56,370,578,032

43

AGRICULTURE & FOOD SECURITY 72,813,830,000 69,975,770,000 141,606,315,038 141,316,927,031

44 INDUSTRY & TRADE 16,388,268,000 16,376,869,000 20,167,507,828 20,167,050,123

46

EDUCATION VOCATIONAL AND TRAINING 138,974,330,000 138,515,430,000 475,685,253,122

475,318,776,451

48

LAND & HUMAN SETTLEMENT 12,161,448,658 12,156,257,546 17,327,070,837 16,942,997,717

49 WATER & AND IRRIGATION 22,193,236,000 22,031,630,000 17,536,035,392 17,535,525,344

50

MINISTRY OF FINANCE AND ECONOMIC AFFAIRS 153,600,231,313 153,501,876,240 36,227,993,998 35,749,849,439

51 HOME AFFAIRS 3,737,554,250 3,734,436,710 4,992,292,872 4,992,292,770 52 HEALTH 178,042,009,216 174,045,834,935 207,523,719,167 207,521,103,915

53

COMMUNITY DEV. GENDER & CHILDREN 7,087,322,533 7,086.373,424 11,150,660,054 11,150,214,082

55

COMM. FOR HUMAN RIGHTS & GOOD GOVERNANCE 2,359,569,256

2,359,569,2562,994,284,627 2,988,042,989

56

REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT 84,666,283,958 84,664, 404,224 95,882,855,243 95,985,810,330

57

DEFENCE & NATIONAL SERVICE 9,327,027,000 9,327,027,000 13,136,993,334 13,136,978,479

58 ENERGY & MINERALS 40,557,226,000 40,527,373,000 43,940,473,778 43,830,058,251

59 LAW REFORM COMMISSION 810,085,885.00 797,343,966.56 1,240,700,082 1,234,751,226

60 INDUSTRIAL COURT 813,086,450 812,912,907 1,1565,317,960 1,155,824,632

61 NATIONAL ELECTORAL 15,878,842,019 15,861,703,264 13,726,408,626 13,726,321,200


172

COMMISSION

62

COMMUNI-CATION & TRANSPORT - -

64

HIGH COURT – LAND DIVISION 816,144,220. 814,194,600. 1,170,947,842 1,158,229,952

65

LABOUR & YOUTH DEVELOPMENT 6,366,564,658 6,366,193,280 6,863,921,848 6,860,638,337

66

PRESIDENT’S OFF. – PLANNING & PRIVATISA-TION 20,485,976,530 20,485,782,450 8,296,523,634 8,247,170,998

68

SCIENCE TECH. & HIGHER EDUCATION 243,624,685,893 243,614,134,914 23,725,713,908 23,725,612,330

69 NATURAL RESOURCES 31,977,881,376.00 31,856,666,130 13,080,541,521 12,982,573,500

90

HIGH COURT – LAND DIVISION 813,086,450 812,912,907 1,148,178,088 1,147,529,488

91 Drugs Control Commission

1,111,802,000 1,110,451,0001,189,713,581 1,189,238,112

92 TACAIDS 3,489,144,987 3,489,144,987.00 3,174,748,380 3,174,748,380

93

IMMIGRATION SEERVICES (Mainland) 14,024,100,000 14,023,450,000 18,591,315,449 18,589,564,475

94

PUBLIC SERVICE COMMISSION 5,933,081,139 5,929,364,000 7,305,368,662 7,286,814,132

96

MINISTRY OF INFORMATION CULTURE AND SPORTS 11,611,993,897 11,610,460,088 12,223,779,114 12,223,779,114

97

MINISTRY OF EAST AFRICAN CORPORATION 8,073,301,303 7,959,776,330 10,406,274,401 10,394,259,942

98

MINISTRY OF INFRUSTRUCTURE DEVELOPMENT 197,478,260,000 197,463,930,000 219,310,761,692 219,307,013474

99

MINISTRY OF LIVESTOCK DEVELOPMENT 197,478,260,000 197,463,930,000 18,731,637,000 18,718,779,699

GOVERNMENT PRESS

TOTAL 2,771,960,445,151 2,142,720,153,992 3,590,968,044,750 3,533,021,852,627


173

Annexure IV(B) SUPPLY VOTE – REGIONAL ACCOUNTS

VOTE NAME ACTUAL FUNDS

RELEASED ACTUAL SPENT ACTUAL FUNDS

RELEASED AMOUNT OF

FUNDS SPENT

2007/2008 2007/2008 2008/2009 2008/2009

70 Arusha 40,432,695,865 40,416,345,341

56,561,404,649.04

47,895,284,894.97

71 Coast 35,285,219,315 35,250,463,464 46,551,535,796 46,547,417,411

72 Dodoma 45,471,865,000 45,470,932,000 60,003,156,915 60,001,300,538

73 Iringa 51,104,118,000 51,050,871,910

70,418,811,936

70,413,506,817

74 Kigoma 34,887,526,696 34,886,332,890 15,213,379,673 15,139,957,880

75 Kilimanjaro 58,904,958,000 58,904,555,000 79,640,285,147 79,624,313,033

76 Lindi 26,279,821,461 26,278,503,261 32,814,856,842 28,828,260,462

77 Mara 43,026,865,000 43,026,865,000 58,126,241,155 58,124,455,524

78 Mbeya 61,658,791,000 61,658,736,000 82,081,411,537 82,022,097,378

79 Morogoro 52,853,942,055 52,853,940,414 73,487,504,296 68,879,451,734

80 Mtwara 32,417,557,444 32,410,414,000 43,883,275,652 43,721,284,268

81 Mwanza 70,869,708,000 70,868,068,000 96,696,855,531 96,571,834,602

82 Ruvuma 36,801,957,000 36,801,898,000 52,736,835,311 51,620,716,000

83 Shinyanga 59,855,099,366 59,855,094,123 79,579,144,224 79,573,117,858

84 Singida

30,729,757,698

30,727,502,694 41,840,857,759 39,936,554,848

85 Tabora 39,621,295,092 39,620,810,164

51,420,989,409 51,420,869,905

86 Tanga 53,530,027,334 50,879,469,191

68,903,308,001 68,893,108,229

87 Kagera

48,845,472,384.00

48,845,423,115.00

68,670,182,311.20

68,667,432,653.07

88 Dar Es Salaam

60,164,558,00O 60,163,650,000 67,778,265,284 67,760,551,939

89 Rukwa 29,650,437,058

29,650,462,052 38,591,253,971 38,577,166,672

95 Manyara 30,713,988,000 30,709,322,000 42,285,385,027 42,285,385,027

TOTAL 943,105,659,768

943,105,659,768

1,227,284,940,426

1,206,504,067,673


174

ANNEXURE V

Stock Verification Reports on Stores Management

SUMMARY

STOCK VERIFICATION MAJOR OBSERVATIONS

( I ) UNSUPPORTED ISSUES OF STORES-

TSH 623,495,866.00 VOTE MINISTRY/DEPARTMENT/REGION AMOUNT

41 Ministry of Justice and Constitutional Affairs 5,060,000.00

43 Ministry of Agriculture and Food Security 22,551,800.00

46 Ministry of Education and Vocational Training 334,588,687.00

48 Ministry of Land,Housing and Human Settlement 2,030,000.00

52 Ministry of Health and Social Welfare 44,102,065.00

53 Ministry of Community Development,Gender and Children 6,417,850.00

58 Ministry of Energy and Minerals 37,740,740.00

69 Ministry of Natural Resources and Tourism 6,921,100.00

93 Tanzania Immigration Services 9,663,600.00

99 Ministry of Livestock Development and Fisheries 10,133,799.00

28 Police Force 47,176,205.00 29 Tanzania Prison Services 8,951,600.00 40 Judiciary 21,525,060.00 59 Law Reform Commission 1,042,750.00 71 Coast 25,069,310.00 72 Dodoma 3,415,200.00 78 Mbeya 24,553,450.00 79 Morogoro 652,650.00

82 Ruvuma 5,302,250.00

87 Kagera 6,597,750.00

TOTAL 623,495,866.00


175

(II) UNSUPPORTED RECEIPT OF

STORES-TSH 3,742,375,612.00

VOTE MINISTRY/DEPARTMENT/REGION AMOUNT


46 Ministry of Education and Vocational Training 3,016,641,834.00

98 Ministry of Infrastructure Development 15,657,380.00




51 Ministry of Home Affairs 1,792,400.00




28 Police Force 86,987,630.00

29 Tanzania Prison Services 154,029,115.00

32 Public Service Commission 19,331,500.00

40 Judiciary 15,595,270.00

59 Law Refrom Commission 4,609,600.00

93 Tanzania Immigration Services 4,272,000.00

71 Coast 21,431,450.00

72 Dodoma 950,500.00

79 Morogoro 5,300,000.00 82 Ruvuma 2,107,000.00 83 Shinyanga 2,709,300.00 85 Tabora 75,638,000.00 88 Dar es salaam 2,445,500.00

TOTAL 3,742,375,612.00


176

(III ) UNACCOUNTED RECEIPTS OF

STORES-TSH 438,546,912.00








28 Police Force 77,626,110.00 29 Tanzania Prison Services 4,243,750.00 42 Speaker ' s Office 1,030,000.00 59 Law Reform Commission 6,645,560.00 93 Tanzania Immigration Services 4,928,000.00 70 Arusha 1,803,550.00 71 Coast 13,736,330.00 TOTAL 438,546,912.00

(IV) UNACCOUNTED ISSUES OF STORES-

TSH 65,367,400.00



87 Kagera 1,159,500.00 88 Dar es salaam 56,544,000.00 TOTAL 65,367,400.00

(V) DEFICIENT STORES-TSH

453,238,280.00






177







28 Police Force 11,040,500.00 29 Tanzania Prison Services 3,833,800.00 32 Public Service Commission 2,054,000.00 40 Judiciary 58,058,500.00 59 Law Reform Commission 2,482,150.00 76 Lindi 8,611,800.00 87 Kagera 725,000.00 88 Dar es salaam 4,239,940.00 TOTAL 453,238,280.00

(VI) UNACCOUNTED PURCHASES OF STORES-TSH 1,967,286,593.27









51 Ministry of Home Affairs 12,808,000.00 58 Ministry of Energy and Minerals 74,024,638.00



28 Police Force 94,383,582.00 29 Tanzania Prison Services 21,878,877.00


178

32 Public Service Commission 9,088,200.00 40 Judiciary 48,304,574.00 59 Law Reform Commission 21,982,400.00 93 Tanzania Immigration Services 27,033,158.00 70 Arusha 58,308,646.00 71 Coast 21,689,450.00 72 Dodoma 27,670,235.67 76 Lindi 75,064,710.00 78 Mbeya 2,160,880.00 79 Morogoro 4,566,650.00 82 Ruvuma 19,810,000.00 87 Kagera 8,378,955.00 88 Dar es salaam 75,826,199.60

TOTAL 1,967,286,593.27

(VII) UNRECEIPTED ISSUES OF STORES-

TSH 419,923,422.00








51 Ministry of Home Affairs 1,555,050.00



28 Police Force 37,090,600.00

29 Tanzania Prison Services 42,398,700.00

40 Judiciary 2,490,150.00

42 Speaker ' s Office 8,977,800.00 93 Tanzania Immigration Services 3,879,500.00 71 Coast 5,549,412.00 72 Dodoma 2,234,800.00


179

76 Lindi 7,634,500.00 88 Dar es salaam 79,668,680.00 TOTAL 419,923,422.00

( IIX ) DOUBTFUL PURCHASES OF STORES-


88 Dar es salaam 3,760,485.00 TOTAL 3,760,485.00

( IX ) UNTRANSFERRED BALANCE OF STORES-TSH 51,454,056.00




58 Ministry of Energy and Minerals 20,667,067.00 28 Police Force 4,406,650.00 71 Coast 11,404,800.00

TOTAL 51,454,056.00

( X ) STORES NEITHER IN MASTER REGISTER NOR INVENTORY SHEET-TSH 2,632,963,342.00


46 Ministry of Education an Vocational Training 843,012,020.00






28 Police Force 62,679,413.00 42 Speaker ' s Office 35,690,000.00 59 Law Reform Commission 162,390,000.00 93 Tanzania Immigration Services 12,835,000.00 71 Coast 51,777,000.00 72 Dodoma 14,773,000.00 83 Shinyanga 7,690,000.00 TOTAL 2,632,963,342.00


180

( XI ) OUTSTANDING LOAN OF STORES-



46 Ministry of Education an Vocational Training 41,079,100.00


52 Ministry of Health and Social Welfare 27,137,000.00 59 Law Reform Commission 9,000,000.00 88 Dar es salaam 1,800,000.00 TOTAL 90,260,400.00

( XII ) FUEL ISSUED FOR PRIVATE USE -


70 Arusha 3,927,530.00 TOTAL 3,927,530.00

(XIII ) UNREPORTED VEHICLE ACCIDENT -

TSH 32,056,000 VOTE MINISTRY/DEPARTMENT/REGION AMOUNT


TOTAL 32,056,000.00

( XIV ) UNACCOUNTED FUEL-TSH

10,447,650.00 VOTE MINISTRY/DEPARTMENT/REGION AMOUNT


42 Speaker ' s Office 2,400,000.00 75 Kilimanjaro 771,600.00 83 Shinyanga 2,276,050.00 TOTAL 10,447,650.00

( XV ) MAINTANANCE AND REPAIR OF GOVERNMENT VEHICLES TO PRIVATE GARAGE WITHOUT PRIOR APPROVAL FROM E & M DIVISION-TSH 3,174,830.00

VOTE MINISTRY/DEPARTMENT/REGION AMOUNT 87 Kagera 3,174,830.00 TOTAL 3,174,830.00


181

( XVI ) UNDELIVERED STORES-TSH

24,791,400.00



TOTAL 24,791,400.00

GRAND TOTAL 10,563,069,778.27

ANNEXURE VI SUMMARY OF AMOUNT OVERSTATED

OVER SALARY

S/NO

CHEQUE NO.

EMPLOYER

AMOUNT(SHS) COMMENTS

1 2119517 TSD 3,720.80 Salary overstated

2 6489256 TSD 581,852 Salary overstated 3 1587489 TSD 6,569,572.33 Overstated

Salary 4 2194886 TSD 90,683.60 Salary overstated 5 1951590 TSD 2,516,006.50 Salary overstated 6 8967835 TSD 108,960 Salary overstated 7 6736318 TSD 75,125.O5 Salary overstated 8 TOTAL 9,870,795.23

SUMMARY OF AMOUNT UNDERSTATED

UNDERSTATED SALARY

S/NO CHEQUE NO.

EMPLO-YER AMOUNT(SHS) COMMENTS

1 3394605 TSD 1,756,294 Understated Salary

2 6218119 TSD 81,096 Understated Salary 3 3413625 TSD 538,597.44 Understated Salary 4 5019744 TSD 32,7549.51 understated salary 5 8849339 TSD 12,600 understated salary 6 4475105 TSD 129,284 under stated salary 7 2102355 TSD 21,770,585.77 understated salary 8 479O259 TSD 31,565.00 understated salary 9 1285110 TSD 9,781,869 Understate Salary 10 3203226 TSD 370,238 Understated salary 11 2865009 TSD 77,000 Understated salary 12 8284086 TSD 1,463,427.34 Understated salary


182

13 K.3439 TSD 372,667 Understated salary 14 M.7549 TSD 1,401,4OO Understated salary 15 3529780 TSD 278,721 understated salary 16 K.2979 TSD 296,201.20 Understated salary 17 42002244 TSD 366,571.55 Understated salary 18 4712842 TSD 466,694.66 Understated salary 19 6008617 TDS 89469.18 Understated salary

S/NO CHEQUE

NO EMPLOYER AMOUNT

(SHS) COMMENTS

1 4764900 TSD 9,718.50 Period overstated 2 17190446 TSD 3,213,125.33 Period overstated 3 8109910 TSD 21,844.66 Period

Overstate 4 Tourism/

Natural Resources

9,400 Period Overstated

5 287335350 TSD I72,567 Period stated 6 2827696 TSD 1,601.97 Period overstated 7 2256432 TSD 3,107.75 Period

Overstated 8 4402738 TSD 203,513.01 Period

Overstated 9 6629854 TSD 62,894.66 Period

Overstated 10 6727392 TSD 263,334.67 Period overstated 11 2508865 TSD 20,162.17 Period overstate 3,981,269.72


183

UNDER PERIOD

S/NO CHEQUE

NO EMPLOYER AMOUNT(SHS) COMMENTS

1 2237677 TSC 2,449,195 Period understated 2 4752293 TSD 333,394.66 Period understated 3 3052675 TSD 849,751.33 Period understated 3,632,340.99

WRONG CALCULATION-OVERSTATED

S/NO CHEQUE NO

EMPLOYER AMOUNT(SHS) COMMENTS

1 2191450 TSD 8,461.44 Wrong Formula 2 83928446 TSD 449,713.33 Wrong formula 3 3434956 TSD 20,501.19 478,675.96

WRONG CALCULATION – UNDERSTATED

S/NO CHEQUE

NO EMPLOYER

AMOUNT(SHS) COMMENTS

1 2437330 TSD 5,547.40 Understated Amount 2 2195388 TSD 2,208,827 Understated amount 2,214,374.40

SUMMARY OF THE AMOUNT OVER PAID

S/NO CHEQUE

NO EMPLOYER AMOUNT(SHS) COMMENTS

1 2826356 Tabora 12,039,599.24 Wrong period 2 7212169 Moshi 1,402,021.50 Wrong period 3 Kilimo 13,353,092.80 Wrong period 4 3155266 Sheria 5,384,390.20 Wrong period 5 2502210 Kilosa 6,468,401.48 Wrong period 6 1401084 Kilimo 7,486,693.00 Wrong salary 7 1906730 Afya 263,552.00 Wrong period 8 2002019 Afya 459,122.00 Wrong period 9 2419169 Tanga 4,137,792.00 Wrong period 10 1373277 Afya 400,768.00 Wrong salary 11 Hazina 5,966,189.40 Wrong salary 12 2000200 Ikulu 12,605,864.60 Wrong salary 13 Hazina 4,386,396.00 Wrong period 14 PMO 670,977.05 Wrong period


184

15 6816870 Maji 1,249,049.00 Wrong period 16 2384246 Maji 122,388.10 Wrong period 17 6281209 Kilimo 2,290,176.60 Wrong period 18 7476158 Kilimo 298,468.00 Wong salary

78,984,940.97

SUMMARY OF THE AMOUNT UNDER STATED

S/NO CHEQUE NO


1 1391688 Afya 17,853,309.80 Wrong salary 2 2302889 Kigoma 608,268.10 Wrong period 3 2983032 Singida 202,954.30 Wrong period 4 3981896 Moshi 2,118,388.60 Wrong salary 5 4126359 Kilimo 16,321.00 Wrong period 6 4216409 Hazina 15,787.50 Wrong salary 7 2989046 Hazina 1,999,293.03 Wrong period 8 4405036 Morogoro 1,237,226.00 Wrong salary 9 Afya 1,100,190.10 Wrong salary 10 3212987 Moshi 1,833,711.80 Wrong salary 11 1302088 Kilimo 340,202.00 Wrong period 12 3550447 Elimu 3,412,666.00 Wrong salary 13 3642637 Hazina 2,993,755.05 Salary and under

age 14 6222761 Maliasi 107,985.30 Wrong salary 15 5563694 Afya 1,635,147.00 Wrong period 16 1724190 Elimu 711,864.85 Wrong period 17 1103791 Mbeya 2,561,339.00 Wrong salary 18 5908695 Afya 961,680.00 Wrong salary 19 - Mahakama 353,860.00 Wrong calculation 20 - Elimu 1,687,790.70 Wrong calculation 21 - Mwanza 457,500.00 Wrong calculation 22 - Elimu 122,340.00 Wrong salary 23 - Elimu 106,498.00 Wrong calculation 24 - Elimu 2,183,529.60 Wrong calculation 25 - Elimu 168,180.20 Wrong calculation 26 - F/Affairs 768,000.00 Wrong salary 27 - Elimu 102,000.00 Wrong salary 45,659,787.93


185

SUMMARY OF THE AMOUNT OVERSTATED

S/NO CHEQUE NO


1 10144268 Utumishi 581,000 Wrong calculation 2 - F/Affairs 3,251,032.30 Wrong salary 3 - Elimu 341,978.05 Wrong calculation 4 - Elimu 915,701.70 Wrong salary

5,089,712.05

OVERSTATED – PERIOD

S/NO CHEQUE NO EMPLOYER AMOUNT (SHS) COMMENTS 1 P 3646 TPDF 53,129,554.85 Overstated period

and salary 2 MT 27070 TPDF 65,792.30 Overstated period 3 MT 26553 TPDF 1,717,896.10 Overstated period 4 MT 22104 TPDF 726,764.00 Overstate period 5 MT 67009 TPDF 36,875.85 Overstated period 6 MT 33266 TPDF 60,563.65 Overstated period 7 MT 39809 TPDF 214,737.00 Overstated period 8 MT 41566 TPDF 60,563.55 Overstated period 9 MT 41481 60,563.65 Overstated period 10 P 7263 TPDF 5,646,587.95 Overstated period 11 UD 8574 TPDF 3,124,025.00 Overstated period 12 MT 10818 TPDF 99,775.80 Overstated period 13 MT 28785 TPDF 456,320.00 Overstated period 14 MTM 1430 TPDF 257,082.00 Overstated period 15 MT 17975 TPDF 503,832.65 Overstated period 16 TR 4795 TPDF 3,770,375.00 Overstated period 17 MT 19712 TPDF 71,578.35 Overstated period 18 MT 2997 TPDF 2,046,775.00 Overstated period 19 MTM 0742 TPDF 1,184,262.00 Overstated period 20 5497175 TPDF 2,376,181.00 Overstated period 21 MT 43266 TPDF 15,844.20 Overstated period 22 MT 1889 TPDF 2,369,950.00 Overstated period 23 MT 14614 TPDF 1,513,223.15 Overstated period 24 MT 42678 TPDF 56,761.00 Overstated period 25 MT 43359 TPDF 711,552.90 Overstated period 26 MT 23073 TPDF 50,563.15 Overstated period 27 MT 8445 TPDF 83,972.10 Overstated period 28 MT 30255 TPDF 39,626.60 Overstated period 29 MT 19077 TPDF 82,342.85 Overstated period 80,533,941.65


186

OVERSTATED – SALARY

S/NO CHEQUE NO

EMPLOYER

AMOUNT (SHS) COMMENTS

1 MT 29799 TPDF 4,279,506.00 Overstated salary. 2 MT 27304 TPDF 4,530,960.00 Overstated salary. 3 P 6283 TPDF 2,050,133.30 Overstated salary. 4 MT 43381 TPDF 377,579.85 Overstated salary. 5 MT 37534 TPDF 1,355,143.90 Overstated salary. 6 MT 63138 TPDF 1,940,586.10 Overstated salary. 7 MT 26508 TPDF 529,480.00 Overstated salary. 8 MT 23776 TPDF 371,614.05 Overstated salary. 9 MT 50968 TPDF 1,135,994.95 Overstated salary. 10 MT 28350 TPDF 439,841.60 Overstated salary. 11 MT 30530 TPDF 3,697,301.05 Overstated salary. 12 MT 24897 TPDF 2,121,575.80 Overstated salary. 13 MTM 0344 TPDF 1,968,847.30 Overstated salary. 14 MT 53906 TPDF 335,264.65 Overstated salary. 15 MT 42635 TPDF 3,833,336.00 Overstated salary. 28,967,164.55

WRONG CALCULATIONS (OVERSTATED)

S/NO CHEQUE

NO EMPLOYER AMOUNT (SHS) COMMENTS

1 MTM 0345 TPDF 503,832.55 Wrong calculation 2 MT 20503 TPDF 7,445,498.95 Wrong calculation 3 MT 39567 TPDF 671,838.00 Omitted liability 4 P 1292 TPDF 10,800,800.00 Omitted liability 19,421,969.50

UNDERSTATED PERIOD

S/NO CHEQUE NO

EMPLOYER AMOUNT (SHS) COMMENTS

1 MTM 0737 TPDF 60,563.95 Understated period 2 MT 37004 TPDF 271,130.00 Understated period 3 MT 21174 TPDF 715,792.05 Understated period 4 MTM 0483 TPDF 1,007,665.50 Understated period 5 MT 11010 TPDF 49,887.65 Understated period 6 MT 30198 TPDF 71,579.00 Understated period 7 MT 29516 TPDF 537,912.00 Understated period 8 MT 25756 TPDF 60,563.70 Understated period 9 MTM 0361 TPDF 83,972.20 Understated period


187

10 MT 10967 TPDF 60,563.65 Understated period 11 MTM 0199 TPDF 83,972.65 Understated period 12 MTM 0358 TPDF 65,792.75 Understated period 13 MT 53235 TPDF 297,875.55 Understated period 14 MT 72740 TPDF 151,833.14 Understated period 15 MT 39906 TPDF 55,493.55 Understated period 16 MT 68168 TPDF 30,730.30 Understated period 17 MT 54911 TPDF 1,360,000.00 Understated period 18 MT 10791 TPDF 60,563.95 Understated period 19 MT 21222 TPDF 121,127.35 Understated period 20 MT 40098 TPDF 249,438.00 Understated period 21 MT 40936 TPDF 60,564.20 Understated period 5,457,021.14

UNDERSTATED SALAY

S/NO CHEQUE


1 MT 51254 TPDF 448,714.70 Understated salary 2 MT 42038 TPDF 3,584,015.85 Understated salary 3 TR 4498 TPDF 5,256,980.00 Understated salary 4 MT 52635 TPDF 481,740.00 Understated salary 5 MT 36156 TPDF 1,319,918.10 Understated salary 6 MT 25636 TPDF 16,228.60 Understated salary 7 MT 19470 TPDF 3,704,616.10 Understated salary 14,812,213.35

WRONG CALCULATIONS (UNDERSTATED)

S/NO CHEQUE


1 MT 38627 TPDF 1,219.30 Wrong calculation 2 MT 67696 TPDF 2,957,235.10 Wrong formula

applied 3 MT 69044 TPDF 2,917,979.65 Wrong formula

applied 4 MT 24101 TPDF 772,148.00 Wrong calculation 5 MT 42275 TPDF 3,825,105.25 Wrong calculation 6 MT 26995 TPDF 870,428.35 Wrong calculation 7 MT 9565 TPDF 83,972.65 Wrong calculation 8 MT 69685 TPDF 1,973,669.75 Wrong calculation 9 P 2162 TPDF 19,558,244.45 Wrong calculation 32,960,002.50


188

SUMMARY OF UNDERSTATED PERIODS

S/NO C/NO EMPLOYER AMOUNT COMMENTS

1 TP 107/4/28 Ministry of Home Affair 59,146 Understated periods

2 TP 107/11/7 Community Development

726,359.10 Understated periods

3 TP 107/8/4 Ministry of Health 1,630,730.00 Understated periods

4 TP 107/11/10 Ministry of Land 98,298.33 Understated periods





7 TP 107/12/1 Ministry of Education 181,488.17 Understated periods

8 TP 107/12/2 Ministry of Education 6,827.67

Understated periods

9 TP 107/9/22 Court of Appeal 3,685.00 Understated periods

10 TP 107/10/14 State House 213.690 Understated periods

11 TP 107/10/6 State House 816,938 Understated periods



13 TP 107/4/26 Ministry of Natural Resources and Tourism



15 TP 107/3/2 Ras - Tanga 1,493,136.4 Understated periods


2,118,675.8 Understated periods

17 TP 107/4/11 Ras – Iringa 177,038.00 Understated periods

18 TP 107/4/17 Ministry of Foreign Affairs


19 TP 107/4/3 Ministry of Education 77,760.00 Understated periods

20 TP 107/3/6 (2) DED - Bagamoyo 895.75 Understated periods

21 TP 107/4/20 Ministry of Home Affairs


22 TP 107/6/4 (2) Ministry of Water 320,250.00 Understated periods

23 TP 107/4/38

Ministry of Home Affairs

1,250,553.00 Understated periods

24 TP 107/4/23 Ministry of Education 333,987.00 Understated


189

periods 25 TP 161/12/12 TSD 99,200.00 Understated

periods 26 TP 105/12/13 Treasury 11,764.00

Understated periods

27 TP 105/1/5 Treasury 2,075,801.20 Understated periods

28 TP 105/7/7 (2) Treasury 75,780.00 Understated periods

29 TP 105/1/10 Treasury 906,998.00 Understated periods

30 TP 105/3/4 Treasury 520, 885.28 Understated periods

31 TP 107/1/7 Ministry of Water 601,355.00 Understated periods

32 TP 107/12/2 State House 127,200.00 Understated periods


34 TP 106/3/3 TISS 3,884,452.00 Understated periods

35 TP 106/3/2 TISS 9,053,033.22 Understated periods


37 TP 105/11/65 Treasury 3,378,473.27 Understated periods



40 TP 105/9/14 Ministry of Treasury 1,294,456.00 Understated periods

41 TP 105/12/13 Ministry of Treasury 211,764.45 Understated periods


43 TP 107/2/3 Ras-Dodoma 147,104.00 Understated periods

44 TP 105/12/2 Ministry of Treasury 3733,929.33 Understated periods

45 TP 105/12/9 (2) Ministry of Treasury 3,720,673.55 Understated periods

46 TP 16/12/12 TSD 99,200.00 Understated periods

40,507,663.00


190

SUMMARY OF UNDERSTATED SALARY AMOUNTS

S/NO C/NO EMPLOYER AMOUNT COMMENT 1 TP/107/2/6 Ministry of

Health 713,320.00 Overestimated

salary 2 TP/107/10/3 Ministry of

Defence 393,563 Overestimated

salary 3. TP/107/9/21(

2) Court of Appeal

39,420.00 Overestimated salary

4 TP/107/1/14 Ministry of Education and vocation training


5. TP/107/2/4 Ministry of Land


6. TP/107/4/45 Ministry of Tourism and Natural Resources


7. TP/107/3/7 Ministry of Infrastructure and Development


8. TP/107/3/1 Ministry of Defence and Natural Service


9. TP/153/9/5 Ministry of Home Affairs


10 TP/105/2/15 Treasury 3,167,911.70 Overestimated salary

11 TP/105/2/11 Treasury 819,004.00 Overestimated salary


13 TP/105/12/12

Treasury 2,476,770.73 Overestimated salary


15 TP/105/3/1 Treasury 3,228,887.60 Overestimated salary

16 TP/105/9/11



191

17 TP/107/9/13

Defence and National Service

1,131,892.00 Overestimated salary

18 TP/105/11/5


19 TP/105/12/1


20 TP/105/10/1

Treasury 3,014,106,.22 Overestimated salary

21 TP/105/10/6

Treasury 612,735.55 Overestimated salary

22 TP/105/10/8


23 TP/105/10/3


24 TP/105/10/9


25 TP/107/1/6

Ras - Mara 1,129,887.51 Overestimated salary

26 TP/107/1/11

Ministry of Education


27 TP/107/1/10

Ministry of Health


28 TP/107/10/20 (2)


1,381,618.00 Overestimated salary

29 TP/105/12/3


36,166,447.91

SUMMARY OF OVERSTATED SALARY AMOUNTS

S/NO C/NO EPLOYER AMOUNT COMMENT

1 TP/107/4/21 Ministry of Education

2,642,315.50 Overstated salary

2 TP/107/3/6 DED-Bagamoyo

999,351.25 Overstated salary

3 TP/107/2/5 Ministry of Infrastru-cture and Develop-ment

24,225.67 Overstated salary

4 TP/105/2/2

Treasury 3,940,188.2 Overstated salary

5 TP/105/2/6 Treasury 2,356,904.05 Overstated


192

salary 6 TP/105/1/12

Treasury 1,604,865.82 Overstated



salary 8 TP/105/1/7

Treasury 253,269.48 Overstated

salary 9 TP/105/1/8


salary 10 TP/161/12/9

TSD 512,174.25 Overstated

salary 11 TP/105/3/15



Treaslury 145,069.15 Overstated

salary 13 TP/105/7/18




salary 15 TP/105/12/5


salary 16 TP/105/12/4

Treasury 1,874,198,45 Overstated

salary 17 TP/105/10/4


salary 18 TP/105/10/10

Treasury 2, 140,157.30 Overstated

salary 25,915,827.84

SUMMARY OF OVERSTATED PERIODS

S/NO C/NO EPLOYER AMOUNT COMMENT

1 TP 107/4/18 Ministry of Tourism and Natural Resources

7,211.66 Overstated Period

2 TP 107/4/22 Ministry of Education


3 TP 107/4/43 Ras- Iringa 1,891,609.16 Overstated Period

4 TP 107/4/37 Ras - Mbeya 55,340.00, Overstated Period

5 TP 107/8/12 Court of Appeal 21,635.00 Overstated Period


1,955,492.00 Overstated Period


193

7 TP 107/4/31 Mbulu District Council


8 TP 107/4/43 Ras - Iringa 1,737,400.00 Overstated Period

9 TP 107/10/13 Ras - Singida 213,650.00 Overstated Period

10 TP 107/11/12 Ministry of Home Affairs


11 TP 107/9/24 Ministry of Natural Resource and Tourism


12 TP 107/10/8 Ministry of Water 328,067.00 Overstated Period

13 TP 107/10/4 Ministry of Defence

497,100 Overstated Period

14 TP 107/10/11 Ras - Tabora 17,804.20 Overstated Period

15 TP 107/10/9 Ras - Tabora 3,261.65 Overstated Period

16 TP 107/10/22 ministry of agriculture


17 TP 107/4/2 Ras - Ruvuma 17,804.16 Overstated Period

18 TP 107/3/4 Ministry of Health 6,936.00 Overstated Period

19 TP 107/3/2 Permanent Secretary


20 TP 107/8/27 (2)

Community Development


21 TP 107/4/47 Cout of Appeal 272,340.00 Overstated Period

22 TP 107/12/6 Ras - Kigoma 25,213.34 Overstated Period

23 TP 107/4/8 Ministry of Education

81,939.00

Overstated Period

24 TP 107/7/8 (2) Ministry of Education


25 TP 107/12/4 Court of Appeal 80,128.33 Overstated Period

26 TP 107/2/2



27 TP 107/10/18

Energy and Minerals


28 TP 107/11/13

Ministry of Labour 634,626.7 Overstated Period

29 TP/107/ 1/16 Ras-Singida 356,083.30 Overstated


194

Period 30. TP/107/3/3 Ras- Mbeya 27,562.50 Overstated

Period 31 TP/107/4/26 Ras-Iringa 3,131,158.75 Overstated

Period TP/153/4/1 Ministry of

Defence 478,160.00 Overstated

Period 32 TP/107/10/12 Ras- Singida 37,237.20 Overstated

Period 33 TP 105/1/5



34 TP 107/1/5

Ras - Lindi 2,580.00 Overstated Period

35 TP 107/1/1

Ministry of Livestock Development and Fisheries


36 TP 107/1/13

Ministry of Livestock Development and Fisheries


37 TP 107/1/8 Ministry of Community Development


38 TP 107/9/17

Court of Appeal 12,936.67 Overstated Period

49 TP 105/8/36

Treasury 2,945,840.00 Overstated Period

50 TP 105/5/38


51 TP 107/8/37

Ras - Morogoro 8, 958.36 Overstated Period

52 TP 105/8/29 Treasury 749,7734.00 Overstated Period

53 TP 107/12/6

Ras - Singida 45,616.60 Overstated Period

54 TP 105/11/2


55 TP 105/2/4


56 TP 105/2/5


57

TP 105/2/10


58 TP 106/5/1

TISS 5,030,886.60 Overstated Period


195

59 TP 105/3/11


60 TP 105/10/5


61 TP 105/3/21


62 TP 105/3/23

Treasury 1,390,784,.05 Overstated Period

63 TP 107/11/3

Treasury 7,500.00 Overstated Period

64 TP 107/1/4

Community Development


65 TP 105/8/34


66 TP 105/7/20

Treasury 94,831.99 Overstated Period

67 TP/105/3/14


68 TP/107/4/58



69 TP 105/3/13 Ministry of Treasury

21906.95 Overstated Period

70 TP 105/ 3/3 Ministry of Treasury


71 TP 105/ 2/1 Ministry of Treasury




73 74

TP 161/8/16 Ministry of Treasury






155,048,731.44


196

SUMMARY OF OVERSTATED AMOUNTS CAUSED BY MIS -CALCULATIONS

S/NO C/NO EMPLOYER AMOUNT COMMENT

1 TP/107/4/6 Justice 55,175.45 Wrong deductions of NSSF amount

2 TP/107/4/45 Ras- Iringa 500,000.00 Wrong deduction of NSSF amounts

3. TP/107/4/41 Ministry of Agriculture

359,849.45 Wrong deduction of NSSF amount

4 TP/107/4/46 Ministry of Water

828488.75 Wrong deduction of NSSF amount

5 TP/107/3/6 Ministry of Communication

2,996.70 Overpayment

6 TP/105/3/10 (3)

Treasury 53,054.90 Overpayment

1,799,565.65

CAG REPORT:Central Government for the year ended 30th June, 2009

Documents

audit report

auditor general office

public audit act

audit staff

audit cycles

audit process

efficient audit services

quality of public services