Loans Board spendthrift shocks Bunge team

 

President John Magufuli

BERNARD LUGONGO in Dodoma

HIGHER Education Students’ Loans Board (HESLB) came under condemnation here yesterday, with the Parliamentary Public Accounts Committee (PAC) questioning its administrative spendthrift during the 2014/15 fiscal year.

The board spent 15.7bn/- in administration, the amount the committee described too huge to use on unnecessary administrative requirements, instead of giving loans to students.

The committee was discussing the board’s financial statement and the Controller and Auditor General report on HESLB accounts for 2014/15 financial year. Some of the administrative costs that came under criticisms include special allowances (582m/-), other payroll allowances (999m/-), board expenses (832m/-) and relationship and hospitality expenses (526m/-).

There were also management expenses (526m/-), expenses on domestic travels (979.5m/-) and expenses on foreign travels (697m/). Acting chairman of the committee, Mr Japhet Hasunga, directed the chairman of HESLB board of directors to reduce the unnecessary spending, especially on allowances.

A committee member, Ms Shally Raymond (Special Seats - CCM), decried the wasteful administrative costs, asking: “Why it doesn’t bother you to see majority of students failing to get loans due to limited funds yet you spend so unnecessarily.” She criticised the HESLB decision to hire loan collection agencies, saying that was part of areas leading to increased unnecessary costs.

“There are poor students whom we are paying for their fees after they had been denied loans only because you have failed to do your job well,” she reprimanded. It was also noted during the meeting that the HESLB possesses 13 bank accounts in six different banks, compelling the board to spend heavily in their maintenance.

Reacting to the committee’s concerns, Executive Director of the HESLB Abdul-Razaq Badru, said administrative costs was part of the areas they plan to slash.

Mr Badru, who was appointed to the post recently, blamed the high spending on the current administrative structure, promising that they are now going to drop some of the directorates to maintain a lean organisational structure.

“We have now suspended special allowances, being part of efforts to cut down costs,” he said. Other measures, he said, would include removing relationship and hospitality allowances and reducing the rented office space as for now HESLB has rented six floors at its headquarters in Dar es Salaam while some of them are not used.

He said currently loan collection agencies are no longer deployed, noting the latter were previously used as pilot in order to establish whether they could bear a good return. “We are optimistic that these administrative costs would go down.

We are now focusing on training our staff for more efficiency,” he said. He went further saying they also have plan to close some of the bank accounts in order to have few accounts, a move that is also aimed at reducing operations costs.