PAC orders special audit on TPA’s 440bn/- fixed deposit accounts

LYDIA SHEKIGHENDA in Dodoma

CONTROLLER and Auditor General (CAG) was yesterday ordered to conduct special audit on Tanzania Ports Authority (TPA)’s 440bn/- fixed deposits that attracts minimal interest rates in various commercial banks.

The parliamentary Public Accounts Committee (PAC) Chairperson, Ms Naghenjwa Kaboyoka, directed the CAG to collaborate with the Bank of Tanzania (BoT) and Financial Intelligence Unit to establish the agreed interest rate and the profit generated, so far.

“This is a huge amount of money ... we request CAG to conduct special audit to establish the reason behind commercial banks offering low interest rate on the TPA’s fixed deposits,” she said.

According to CAG, the fixed deposit accounts were opened at CRDB Bank, National Microfinance Bank (NMB), National Bank of Commerce (NBC) and Standard Chartered Bank. Msalala MP Ezekiel Maige (CCM) said there was need for the committee members to find out the applicable commercial rate for fixed deposits and how much earning TPA was expecting.

Mr Maige proposed legal actions against the commercial banks and TPA officials who facilitated theft of the public funds. “This is colossal amount of money, yet TPA has been earning peanut... this embezzlement was done deliberately and as the committee, we should ensure that all people and institutions involved are held accountable,” Mr Maige said.

He explained that financial institutions have minimum rates for fixed deposit reserves, noting that according to the survey, the minimum rate is 7.5 per cent although it can increase subject to the deposited amount.

Financial institutions, Mr Maige charged, normally pay 7.5 per cent interest on fixed reserves below 500m/- and nine per cent on between 500 and 2bn/-. He further explained that for fixed reserve above 2bn/-, the 13 per cent interest rate is always applicable.

“TPA deposited 440bn/- in 2014/2015, it was therefore supposed to earn the maximum interest rate of above 13 per cent but according to the CAG report, the authority was paid 17bn/-, which means that deposit attracted below two per cent interest rate,” Mr Maige said.

At the rate of 13 per cent, TPA was supposed to earn 57bn/-, said the legislator, charging that the authority had been duped of the whopping 40bn/-.“Preliminary reports show that TPA officials have been collaborating with banks officials to get low interest rate and benefit from the remaining amount,” Mr Maige said.

Another Committee Member, Jamal Ally (Magomeni - CCM), proposed the involvement of the central bank, as the banking sector regulator, in the investigations of the embezzled funds to ensure legal action is taken against all the culprits.

The lawmakers also quarried TPA’s excessive expenditure while contributing negligibly to the basket fund. According to TPA financial report, 14bn/- was spent on travelling while publication and workers’ council consumed 12bn/- and 9bn/-, respectively.

“How can TPA board approve such huge amount of money these are unnecessary spending...this is misuse of public funds and the new management should take stern disciplinary action against all officials involved,” said Sikonge MP Joseph Kakunda.

TPA’s Board Chairman, Prof Ignas Rubaratuka, conceded to the problems, promising to work on the committee directives for increased efficiency.