Audit exposes loss of billions in Tanzania's public sector

Tanzania's President John Pombe Magufuli. Auditor General report notes that state entities channelled trillions of shillings into ghost ventures. PHOTO | THE CITIZEN 

In Summary

• Audit report notes that state entities channelled trillions of shillings into ghost ventures and diverted funds to areas not open to scrutiny.
• Auditor General raises doubts over the authenticity of payments for goods and services worth Tsh1.5 billion ($662,000) made by 11 government institutions to different bidders without a proper contract.
• The CAG established that eight state-owned entities bought equipment valued at Tsh53 billion ($23 million), which was never delivered.

By VICTOR KAREGA
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A report by Tanzania’s Controller and Auditor General paints a grim picture of public finance management in the country.

Prof Mussa Assad, who presented an executive summary of audited reports for the financial year 2016/17 to President John Magufuli, noted that state entities channelled trillions of shillings into ghost ventures and diverted funds to areas not open to scrutiny.

In seven government entities, items worth of Tsh3 billion ($1.3 million) were purchased without approval by the procurement board.

The CAG also raised doubts over the authenticity of payments for goods and services worth Tsh1.5 billion ($662,000) made by 11 government institutions to different bidders without a proper contract, which is contrary to section 10 of sub-regulation (4) of the Public Procurement Regulations of 2013.

The report exposed 14 institutions which bought and received products worth Tsh1.7 billion ($748,000) without consulting the committee responsible for auditing and inspection of records, in accordance with the procurement regulations.

State-owned entities

The CAG established that eight state-owned entities bought equipment valued at Tsh53 billion ($23 million), which was never delivered.

He cited the Tanzania Revenue Authority (TRA), National Social Security Fund, Tanzania Ports Authority and National Identification Authority (Nida) as public institutions involved in dubious deals.

For instance, TRA failed to submit the rail revenue to the Reli Assets Holdings Company (Rahco) amounting to Tsh194 billion ($85.6 million). Also Rahco spent a total of Tsh20 billion ($8.8 million) on the feasibility study in the 2016/2017 project that did not materialise.

Highlighting about Nida, CAG said the government lost Tsh402 million ($177,000) to fake rented office space. Also a total of Tsh167 million ($73,695) was lost when Nida transacted in foreign currency through commercial bank rates instead the Bank of Tanzania rates.

Prof Assad revealed a scam that involved the NSSF and four institutions where the fund was to lend Tsh60 billion ($26,477), but mysteriously, the NSSF approved Tsh67 billion ($29,566).

He also cited ineffective store control at the Medical Store Department leading to a loss of Tsh4.5 billion ($2 million) over expired drugs.

Another concern was the insufficient capability and efficiency of Tanzania Ports Authority (TPA) to monitor the container terminal service as it has failed to generate eligible income for every container offloaded at the harbour.

Also, the road fund board lost Tsh15 billion ($6.7 million) in uncollected revenue from petroleum products destined for neighbouring nations.