Issue No.

005/11

CAG 2009/10 Report ndings

Tanzania lost approx Tri 2.4 in 2009/10-CAG Reports
It appears shoddy government expenditure and failure of government to respond to issues raised and recommendations made by the CAG has become a chronic disease, whose effects, if not addressed, will continue to taint government image and cost citizens dearly. According to the four volumes of the Controller and Auditor General (CAG) audit reports, a total of Trillion 2.4 (Approx USD 16 billion) was either lost, misspent or could not be accounted by various Ministries, Departments and Agencies during the 2009/10 nancial year. The stated amount is equivalent to 25% of the national budget of 2009/10 as it had Tri 9.4. The report which was released in April, 2011 speaks of government ofcials complete disregard of public nancial rules and regulations and running government ministries and departments contrary to prudent accountability in governments expenditure. The CAG, Mr Ludovick Utouh, said some key recommendations made to the government in the past in regard to problems raised in the previous reports had equally been ignored. My recommendation and advice issued in the past have not been implemented the government has not been strict in ensuring that my advice is implemented to the latter, Mr Utouh said in his report. The 2009/2010 audit report looked into the expenditure of Tsh 468, 627,883,842/- by 46 ministries, government departments and agencies and Regional Administrative Secretariates briey referred to as MDAs and RAS. He said the foregoing sum had not been audited by his ofce in the past, adding that out of the lot, the Ministry of Finance and Economic Affairs led the pack with Tsh 361,327,312,329,79/The Finance ministry was followed by the Prisons department which failed to account for Tsh19,261,840,595/-, and the last spot was taken by Lindi Regional Administrative Secretariat (Lindi RAS) with Tsh 10,146,855,167/- unaccounted for The report called on the government to fulll its part by ensuring that recommendations made by the CAG are implemented to the last word by nance ofcials so as to avoid future problems as far as government expenditure is concerned. It was also discovered MDAs/RAS and ve regions violated regulation number 5 (in respect to

procurement of goods, works, non consultant services and disposal of public assets by tender) of the Public Procurement Act of 2005.
Details Unqualied Unqualied with emphasis of matter 31 9 40 21 61 56.5% Qualied Adverse Disclaimer Total

MDAs RAS Sub total Embassies Grand total

11 3 14 8 22 20.4%

13 7 20 2 22 20.4%

1 1 2 2 1.8%

1 1 1 0.9%

56 21 77 31 108 100%

Source: CAG Report 2009/10 The foregoing institutions spent Tsh176, 722,089/- in repairing their vehicles when the law required them to use Tanzania Electrical and Mechanical Service Agency, TEMESA. The names of institutions which fell victim to this illegitimate expenditure with the money they spent in brackets are RAS Morogoro, (Tsh7,887,983), Kagera RAS (Tsh3,464,678), the Ministry of Infrastructure Development (Tsh40,545,082), Kilimanjaro RAS (Tsh13,833,969). The CAG advised government institutions to adhere to Regulation number 59 (1) and (2) of the Public Procurement Act of 2005 by ensuring that vehicle repairs are approved by the TEMESA before and after completion of repair work on any given vehicle. During the year under review, ten MDAs and RAS effected payments on procurement of goods and services amounting to Tsh. 50,685,371,565.58 in violation of section 45 of the PPA of 2004. The foregoing section requires every procuring entity to plan its procurement in a rational manner to avoid unnecessary emergency procurement and be able to aggregate its requirement so as to obtain value for money, reduce procurement costs and have effective procurement contract arrangements. Those who violated section 45 of the PPA of 2004 and the amount of money spent in bracket are the Accountant Generals Department (Tsh. 49,433,343,399.58), Ministry of Livestock and Fisheries (Tsh.320, 871,938), RAS Mwanza (Tsh.54, 424,314) and the Ministry of Finance and Economy (Tsh.373, 184,960). Others are the Ministry of Foreign Affairs and International Cooperation (Tsh. 92,750,000), Ministry of Foreign Affairs and International Cooperation (Tsh. 120,147,447.23), Drugs Control Commission (Tsh. 40,748,400), RAS Ruvuma (Tsh. 11,654,400).

Outstanding matters of previous years audit

Vote Vote
14 16 21 22 28 29 32 34 37 38 39 40 41 42 43 44 46 48 49 50 51 52 53 56 57 58 68

F/Y 2009/10 JPY

0 0 390,000,000 0 N/A N/A N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A N/A 0 309,000,000 N/A N/A N/A N/A N/A N/A N/A

MDAs
Fire and Rescue Force Attorney Generals Chamber Treasury Public Debt and General Services Police Force Prison Service Department Public Service Management Ministry of Foreign Affairs and International Cooperation Prime Ministers Ofce Ministry of Defence and National Service (Ngome) National Service Judiciary Ministry of Constitutional Affairs and Justice Ofce of the National Assembly Ministry of Agriculture and Food Security Ministry of Industry Trade and Marketing Ministry of Education and Vocational Training Ministry of Land Ministry of Water Ministry of Finance and Afliated Bodies Ministry of Home Affairs Ministry of Health and Social Welfare Ministry of Community Development Gender and Children Ministry of Regional Administration and Local Government Ministry of Defence and National Security Ministry of Energy and Minerals Ministry of Science and Technology

TShs
705,197,958 468,274,892 10,687,912,018.10 9,479,812,094 1,093,746,278 19,261,840,595 2,789,182,969 200,000,000 N/A N/A N/A 4,441,030,198.90 N/A 37,989,400 370,174,310.60 669,380,063.87 5,273,641,831 3,897,267,830 32,142,466 361,327,312,329.79 N/A 328,205,308 73,065,253.87 290,296,059 6,768,619,817 464,148,122 115,982,516

USD
N/A N/A N/A 2,100,000 N/A N/A N/A 151,000 N/A N/A N/A 0 N/A N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A N/A N/A N/A continues next page

69 90 93 94 96 98 99 92

Ministry of Natural Resources and Tourism Land court Immigration service Public Service Commission Ministry of Culture Information and Sports Ministry of Infrastructure Development Ministry of Livestock Development and Fisheries Tanzania Commission for Aids

N/A N/A N/A N/A N/A N/A N/A N/A

N/A 24,860,250 88,144,000 459,294,659 65,181,000 37,190,988 454,034,805 130,558,176

N/A N/A 75,580 N/A N/A N/A N/A N/A

Source: CAG Report, 2009/10 on Central Government *N/A Not Applicable It was also discovered in the course of auditing during the period under review that almost All MDAs and RAS did not adhere to the Public Procurement Act. This was despite the fact that they received clean audits. The report further noted that the Public Procurement Act number 21 of 2004 and its regulations of 2005 are hardly adhered to by government institutions. Despite efforts to tackle the perennial problem of ghost workers, the problem continues to exist. For instance, audit of payroll carried out during the year under review showed that eight MDAs/RAS paid a total sum of Tsh. 1,842,607,565.29. Institutions involved and the money they spent in brackets are the Vice Presidents Ofce (Tsh. 3,735,894.72), Presidents Ofce-Public Service Management (Tsh. 1,686,726,709), the Ministry of Lands and Human Settlements (Tsh. 26,020,151.77), the Ministry of Health and Social Welfare (Tsh. 83,768,896), Ministry of Natural Resources and Tourism (Tsh. 10,052,511.80), RAS Tabora (Tsh. 6,315,000), RAS Kagera (Tsh. 21,662,551), Immigration Service Department (Tsh. 4,325,851). The CAG audit also discovered violation of the government circular No. C/CA134/213/01G/69 of 30th January, 2006 of payment of furniture allowance to entitled ofcers. The circular issued by the Presidents Ofce, Public Service Management amended the previous ones aimed at eliminating interpretation confusion which had in the past led to double standard during its implementation. Contrary to the provisions of the above cited circular, ten MDAs and RAS paid Tsh. 650,714,800.66 towards procurement of furniture for ofcers who were living in their own houses, thus causing nugatory expenditure. Government institutions which contravened the circular and the money they spent in brackets are the Vice Presidents Ofce (Tsh. 90,207,007), Vice Presidents Ofce, Public Service Management
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(Tsh. 111,163, 427), Ministry of Agriculture, Food Security and Cooperatives (Tsh. 29,685,000). Others are the Ministry of Education and Vocational Training (Tsh. 86, 563,593), Ministry of Community Development, Gender and Children (shs. 55,895,840), Ministry of Energy and Minerals (Tsh. 92,365,000). Others are the Law Reform Commission (Tsh. 13, 695, 000), Ministry of Communication, Science and Technology (Tsh. 18, 839, 539), Ministry of Natural Resources and Tourism (Tsh. 119, 373,094.66) and Ministry of Information, Youth, Culture and Sports (Tsh. 32,936,800.66). The CAG audit further discovered expenditure by MDAs and RAS not supported by proper documents to the tune of Tsh. 362,026,933,382.25. The foregoing expenditure was contrary to regulation 95(4) of the Public Finance Regulation of 2001(revised 2004). The names of government institutions involved in the racket with the money they spent in brackets are the High Court of Tanzania (Tsh. 825,240,000), District and Primary Courts (Tsh. 29,527,500), Treasury (Tsh. 150,611,256), Public Debt and General Services (Tsh. 279,993,233m165,09) and Prisons Department (Tsh. 80,559, 598). Others are the Presidents ofce, Public Service Management (Tsh. 8,052,888,683), the Judiciary (Tsh. 363,966,918.60), Ofce of the Speaker (Tsh. 48, 539,438), the Ministry of Education and Vocational Training (Tsh. 342,039,444), the Ministry of Finance and Economy (Tsh. 70, 000.000,000) and the Ministry of Health and Social Welfare (Tsh. 597,967,673). Others are the Ministry of Natural Resources and Tourism (Tsh. 165,448,602), RAS Ruvuma (Tsh. 34,627,787), RAS Tabora (Tsh. 119,742,418), TACAIDS (Tsh. 1,044,265,701), the Presidents Ofce, Public Service Commission (Tsh. 94,712,958) and RAS Manyara (Tsh. 83,562240.56). The CAG audit in the year under review also discovered that government institutions paid 13,865,874,762/- to various suppliers in the country for the purchase of goods that were at the end of the day not delivered! Involved government institutions are the Prisons Department (Tsh. 295,463,511), the Judiciary (Tsh. 204833,667), the Ministry of Lands, Housing and Human Settlement (Tsh. 126,835,900), the Ministry of Health and Social Welfare (Tsh. 1,648,407,271) and the Prime Ministers Ofce, Regional Administration and Local Government (Tsh. 611,104,553). Others are RAS Kilimanjaro (Tsh. 329,877,640), RAS Mbeya (Tsh. 208,439,409), RAS Rukwa (Tsh. 19,728,778) and the Ministry of Infrastructure Development (Tsh. 5,830,802,264). It was also discovered, in the course of the audit in the year under review, that payments amounting to 5,296,243,598/- was charged by government institutions to wrong expenditure codes without authority or allocation. This practice was contrary to Regulation 51 (1-8) of the Public Finance Regulation of 2001(revised in 2004).

Culprit government institutions with the money they spent in bracket are the National Service (Tsh. 308,972,400), the Ministry of Industry, Trade and Marketing (Tsh. 263,963,996), the Ministry of Education and Vocational Training (Tsh. 362,445,738) and the Ministry of Health and Social Welfare (Tsh. 3,894,809,822). Others are the Prime Ministers Ofce, Regional Administration and Local Government (Tsh 30,313,727), the National Electoral Commission (Tsh. 262,025,808), RAS Kilimanjaro (Tsh. 12,471,000), RAS Tanga (Tsh. 80,991,107) and the Presidents Ofce, Public Service Commission (Tsh. 79, 250,000). During 2008/2009 nancial year, three MDAs failed to produce relevant and sufcient information to justify their expenditure of 15,711,104,612/-. In a nutshell, the expenditure of 15.7bn/- by the three institutions was nothing but questionable. The names of the culprits, the vote they drew the money from and the money they spent in bracket are the Judiciary, vote 40, (Tsh. 267,658,188), the Ministry of Finance and Economy, vote 50, (Tsh. 15,415146,424) and RAS Manyara, vote 95, (Tsh. 28,300,000). In conclusion, the CAG states in his report that he was not provided with the list of individuals who had beneted, through loan facilities, from the stimulus package that was to the tune of Tsh 48,000,270,000/It would be recalled that the Bank of Tanzania, BoT, was provided with the foregoing amount of money as part of the governments initiative to rescue business affected by the global nancial and economic crisis. Therefore the absence of a list of individuals which could have clearly shown who had been given what, raises very serious questions over the expenditure of the 48bn/- stimulus package. For instance, was the money spent for the purpose it was designed or was it diverted to other uses? For the government to succeed in its endeavour to turn around the countrys economy, it is important that what is raised by the CAG report is taken seriously by dealing, in accordance with the law, with those who have made a profession out of eating tax-payers money.

CAG Reports 2009-2010 of Local & Central Governments

6

The total unnecessary expenditures, misusage and an accounted of funds as per CAG Report 2009-10
Details Procurements made without annual procurement plans Motor vehicles repair works not routed through TEMESA Salaries paid to retirees, absentees and ineligible ofcers Payment of furniture allowance to ineligible ofcers Expenditure not properly supported Goods not delivered Payments charged to wrong expenditure codes Questionable costs Government debt and outstanding commitments Tax exemptions Uncollected debts Contingent liabilities Government guarantees Unearned claims without proper explanations: Outstanding liabilities Lost funds and government assets: Special funds Unspent balances not returned to PMG account Stimulus and rescue package not substantiated Payment to Banks without supporting documents Total of Misused funds during the period: Budget as per nancial year Total amount of funds misused equivalent to 20% of the whole budget Amount 50,685,371,565.58 176,722,089.00 1,842,607,565.29 770,087,895.00 4,303,339,515.00 13,865,874,762.00 4,953,226,683.00 15,595,054,755.00 254,616,874,180 680,667,900,000.00 116,320,437,345.00 26,276,785,317.00 711,804,989,096.00 134,046,000,000.00 160,756,067,190.00 11,152,048,065.00 78,014,807,604.00 31,821,562,811.00 48,000,270,000.00 70,000,000,000.00 2,415,670,026,437.87 11,000,000,000,000.00 2,415,670,026,437.87

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The total unnecessary expenditures, misusage and an accounted of funds as per CAG Report 2009-10
Other important things to be considered: An increase of national debt by 38% amounting Non-current assets Accumulated funds not accounted for due to Banking irregularities and errors over a long time: Exchequer account statement overdraft Government investments Trilioni 10 Trilioni 7.9 Bilioni 747.1 Trilioni 1.3 Trilioni 8.7

Outstanding matters of previous years audits for three consecutive years (FY 2007/08, 2008/09, and 2009/10):

Financial Year 2007/2008 2008/2009 2009/2010

Amount of outstanding matters (Shs) 32,903,395,306 53,463,558,647 122,128,377,615

No. of Councils involved 112 126 129

This brief was prepared by Michael J. Dalali on behalf of Agenda Participation 2000(AP2000) based on information obtained from the Tanzania Corruption Tracker System (CTS) whose website is www.corruptiontracker.or.tz AP2000 is a Tanzanian Non Governmental Organisation engaged in promoting good governance and hosts the Tanzania Corruption Tracker System. The CTS is supported by the Finish Embassy and the Swiss Agency for Development Corperation (SDC).

Agenda Participation 2000 5th Floor, Ubungo Plaza, P.O Box 55756, Dar es Salaam, Tanzania Tel: + 255 22 2460036/ 2460039, Fax: + 255 22 2460040, Cell: 0754 844410 Email: info@corruptiontracker.or.tz Website: www.corruptiontracker.or.tz

ISSN No. 978-9987-9441-3-2

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