Public Accounts Audit by CAG Tanzania 2012/2013

O f f i c e o f t h e C o n t r o l l e r a n d A u d i t o r
G e n e r a l A G R / C G / 2 0 1 2 / 1 3

2012/2013

THE UNITED REPUBLIC OF TANZANIA

NATIONAL AUDIT OFFICE

THE ANNUAL GENERAL REPORT OF THE
CONTROLLER AND AUDITOR GENERAL ON THE
FINANCIAL STATEMENTS OF THE CENTRAL
GOVERNMENT (MDAs) FOR THE YEAR ENDED 30
TH

JUNE, 2013

The Controller and Auditor General,
National Audit Office
Samora Avenue/Ohio Street
P. O .Box 9080
Tel: +255 (022) 2115157/8
Fax: +255 (022) 2117527
e-mail ocag@nao.go.tz
website: www.nao.go.tz
Dar es Salaam.

This general report covers 60 Ministerial Votes,
Departments and Agencies, 25 Regional Administrative
Secretaries and 32 Embassies
Office of the Controller and Audit Page ii
General AGR/CG/2012/13

In reply, please quote
Ref.Na.FA.27/249/01/2012/13
28
th
March, 2014

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 THE ANNUAL GENERAL
REPORT OF THE CONTROLLER AND AUDITOR
GENERAL ON THE FINANCIAL STATEMENTS OF
THE CENTRAL GOVERNMENT FOR THE
FINANCIAL YEAR ENDED 30
TH
JUNE, 2013

Pursuant to Article 143(4) of the Constitution of the
United Republic of Tanzania of 1977 (revised 2005),
and Section 34 (1) (c) of the Public Audit Act No. 11
of 2008.

I have the honour and respect to submit to you the
General Audit Report on the Central Government
for the financial year ended 30
th
June, 2013 for
your information and necessary action.

THE UNITED REPUBLIC OF TANZANIA

NATIONAL AUDIT OFFICE

Office of the Controller and Auditor General, Samora Avenue, P.O. Box 9080,
DAR ES SALAAM. Telegram: Ukaguzi", Telephone: 255(022)2115157/8,
Fax: 255(022)2117527, E-mail: ocag@nao.go.tz, Website: www.nao.go.tz
Office of the Controller and Audit Page iii

I have provided constructive recommendations
which if implemented can mitigate the incidence of
irregularities and substantially improve financial
accountability in the Government.

I submit.

Ludovick S. L. Utouh
CONTROLLER AND AUDITOR GENERAL
Office of the Controller and Audit Page iv

TABLE OF CONTENTS

LIST OF TABLES ............................................... ix
Office of the Controller and Auditor General ............. xii
Vision, Mission and Core Values ............................. xii
Foreword ....................................................... xiv
Acknowledgement ............................................ xix
LIST OF ABBREVIATIONS ..................................... xxi
Executive summary .......................................... xxiv
CHAPTER ONE .................................................. 1
1.0 BACKGROUND AND GENERAL INFORMATION .......... 1
1.1. Audit Mandate and Rationale for Audit. .............. 1
1.2 Applicable Auditing Standards and Reporting
Procedures. ............................................... 5
1.3 Number of audited entities and NAOTs set up ...... 7
1.4 Statutory Responsibilities of the audited entities ... 9
CHAPTER TWO ................................................. 12
AUDIT OPINION OVERVIEW, TYPES, BASIS AND THE
ACTUAL AUDIT RESULTS ...................................... 12
2.0 An overview of the audit opinion ..................... 12
2.1 Types of the audit opinions ............................ 13
2.2 Basis of the audit opinion and the actual audit
results .................................................... 14
2.3 Trend of Audit Opinions ................................ 24
2.4 Audited entities issued with qualified, adverse
and disclaimer of opinions with their actual specific
basis of their qualifications ........................... 28
CHAPTER THREE .............................................. 56
FOLLOW UP ON THE IMPLEMENTATION OF THE
PREVIOUS YEARS' AUDIT RECOMMENDATIONS .............. 56
3.0 Introduction .............................................. 56
3.1 Responses of accounting officers/ heads of
departments on individual reports submitted to
them by the Controller and Auditor General ....... 57
3.2 Follow up on the PMG's structured responses upon
the recommendations issued by the Controller and
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Auditor General on the general report of Central
Government in 2011/2012 ............................. 60
3.3 Responses on implementation of the PACs
recommendations ....................................... 74
CHAPTER FOUR ................................................ 88
PUBLIC FINANCE MANAGEMENT .............................. 88
4.1 REVENUE COLLECTION AND FUNDING ANALYSIS .... 88
4.2 NATIONAL ACCOUNTS ................................. 103
4.3 EXPENDITURE MANAGEMENT ........................ 134
CHAPTER FIVE ............................................... 150
EVALUATION OF INTERNAL CONTROL SYSTEM AND
GOVERNANCE ISSUES ........................................ 150
5.0 Introduction ............................................ 150
5.1 Inadequate Performance of Internal Audit Units . 151
5.2 Inadequate Performance of Audit Committees ... 152
5.3 Inadequate Risk Management process ............. 154
5.4 Weaknesses in Information Technology - General
Controls ................................................ 154
5.5 Inadequate Fraud Prevention and Control ........ 156
5.6 Inadequate utilization of IFMS/Epicor System .... 157
CHAPTER SIX ................................................. 160
HUMAN RESOURCES AND PAYROLL MANAGEMENT ....... 160
6.0 INTRODUCTION ........................................ 160
6.1 Key issues raised from audit of MDAs and RS ..... 161
6.2 Absence/Inadequate Open Performance Review
and Appraisal System (OPRAS) ...................... 167
6.3 Outstanding staff claims ............................. 168
6.4 Inadequate number of staff ......................... 169
6.5 Deductions made to employees above two third
(2/3) of the gross salary ............................. 170
6.6 Problems associated with the application of
Human Capital Management Information System
(HCMIS) LAWSON ...................................... 171
6.7 Absence of Important Posts of Tourist Officer .... 172
CHAPTER SEVEN ............................................. 174
REVIEW OF PROCUREMENT MANAGEMENT ................ 174
7.0 INTRODUCTION ........................................ 174
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7.1 Major Issues Identified on Procurement Audit .... 175
7.2 Procurement without competitive quotation ..... 175
7.3 Assets Procured but not operational ............... 177
7.4 Payments Made Above Invoice/Contractual
Amount ................................................. 178
7.5 Procurements out of Annual Procurement Plan .. 179
7.6 Procurement without approval of Tender Board . 180
7.7 Procurement using Imprests ......................... 181
7.8 Stores procured but not accounted for in stores
ledgers .................................................. 183
7.9 Issues Identified by PPRA ............................ 184
7.10 Compliance with PPA 2004 and its regulations of
2005 ..................................................... 185
7.11 Assessment of contracts management ............. 185
7.12 Management of procurement records .............. 186
7.13 Evaluation of Procurement Information
Management System (PIMS) .......................... 186
7.14 Recommendations given by PPRA ................... 187
7.15 Anomalies in procurement and stores management
observed by Directorate of Government Assets
Management Division (Stock Verifier) .............. 189
CHAPTER EIGHT ............................................. 192
ASSETS MANAGEMENT AND LIABILITIES ................... 192
8.0 INTRODUCTION ........................................ 192
8.1 Non maintenance/establishment of proper Non
current asset register ................................ 193
8.2 Grounded and un-serviceable Noncurrent asset .. 196
8.3 Partial revaluation of Property, Plant and
Equipment ............................................. 197
8.4 Property, Plant and Equipment lacking ownership
documents ............................................. 198
8.5 Improper recognition of intangible assets ......... 199
8.6 Absence of monitoring devices (CCTV camera) at
weighbridge stations ................................. 200
8.7 Misclassification of Development Funds Transfer 201
8.8 Inadequate management of Ivory tusks stockpile and
other trophies ......................................... 202
8.9 Non disclosure of imprest as receivables .......... 205
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8.10 Unsettled liabilities amounting to . ..... 206
CHAPTER NINE ............................................... 208
9.0 SPECIAL AUDIT ......................................... 208
9.1 Introduction ............................................ 208
9.2 Report on the audit conducted on Designated
objectives. ............................................. 210
9.3 Ministry of Works on Procurement of MV
Misungwi for financial year 2004/2005 ............ 211
9.4 Ministry of Agriculture, Food Security and
Cooperatives on the National Agricultural Inputs
Voucher Scheme (NAIVS) ............................. 213
9.5 Ministry of Health and Social Welfare on financial
impropriety of training fees at Mkomaindo
Nursing Training Centre .............................. 217
CHAPTER TEN ................................................ 219
OTHER ISSUES ................................................ 219
10.0 INTRODUCTION ........................................ 219
10.1 Government Agency Appraisal ...................... 219
10.2 Payment of Rent Charges by MDAs 226
10.3 Challenges facing Tanzania Prison Service (TPS) . 228
10.4 The role of Controller and Auditor General in
Auditing PPP projects ................................ 234
10.5 Common issues emerging from the ongoing audit of
Political Parties accounts .......................... 243
CHAPTER ELEVEN ........................................... 247
11.0 CONCLUSION AND RECOMMENDATIONS ............. 247
11.1 Non implementation of some of the previous
years recommendations ............................. 248
11.2 Procurement Management ........................... 249
11.3 Unattended Shortage of Workforce in MDAs and RS 251
11.4 Salaries Paid to non Exiting Employees .......... 252
11.5 Expenditure Management ............................ 253
11.6 Operation of Embassies .............................. 255
11.7 Operations of Designated Hospitals ................ 257
11.8 National Agricultural Inputs Voucher Scheme
(NAIVS).................................................. 259
11.9 IPSAS preparedness and implementation .......... 260
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11.10 Monitoring and evaluation of projects financed
through debt proceeds .............................. 265
11.11 Lack of Unified Debt Management Office ........ 266
11.12 Converted Liquidity Papers into financing papers . 266
11.13 Release of funds towards the end of the
financial year ......................................... 267
11.14 Management of Customs and Bonded
Warehouses ............................................ 268
14.0 ANNEXURES ............................................ 270

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LIST OF TABLES
Table 1: Number of Auditees ....................................... 7
Table 2: List of the audited entities issued with unqualified
opinion ..................................................... 15
Table 3: List of audited entities issued with unqualified
opinion with other matters ............................ 18
Table 4: Trend of audit Opinion for the past four years ..... 26
Table 5: List of MDAs issued with Qualified Opinion and the
their basis ................................................. 30
Table 6: List of audited entities issued with Adverse Opinion
and the basis of adverse opinion ...................... 55
Table 7: PMG's structured responses ............................ 61
Table 8: PAC's recommendations from the report ............ 75
Table 9: The estimates and actual revenue performance for
the financial year 2012/2013 and
2011/2012 ................................................. 90
Table 10: Analysis of Exchequer issues released for Supply
vote:........................................................ 93
Table 11: Analysis of Exchequer issues released for
Development vote: ...................................... 94
Table 12: Analysis of exchequer issues and actual
expenditure for the supply vote for the financial
years 2011/2012 1nd 2012/2013. ..................... 95
Table 13: Analysis of exchequer issues released for
development vote. ...................................... 96
Table 14: Summary of non-tax revenue .......................... 98
Table 15: Analysis of Expenditure arrears is shown below:- . 101
Table 16: Outstanding matters for TRA for 2010/2011 and
2011/2012 ................................................ 114
Table 17: TRA Revenue Performance Tanzania
Mainland .................................................. 115
Table 18: TRA Revenue Performance - Zanzibar ............... 115
Table 19: TRA Revenue Collection Pattern - Tanzania
Mainland .................................................. 116
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Zanzibar .................................................. 117
Table 21: Summary of tax exemptions issued to institutions 119
Table 22: TRA Exemptions against actual collection for
financial year 2011/12-2012/13 ..................... 120
Table 23: TRA Revenue Yield for Tanzania with Exemptions
considerations .......................................... 121
Table 24: Recurrent expenditure trend ......................... 126
Table 25: Exchequer issues released in each quarter ......... 127
Table 26: Long outstanding imprests ............................ 135
Table 27: Summarized results of long outstanding imprests: 135
Table 28: Summarized payments charged to wrong
expenditure codes: ..................................... 136
Table 29: Overpayment ............................................ 137
Table 30: Summarized payments overcharged: ................ 138
Table 31: Summarized payments made out of approved
budget: ................................................... 139
Table 32: Summarized payments inadequate
supported:................................................ 140
Table 33: Missing acknowledgement receipts/ EFR receipts 142
Table 34: Payments without statement of expenditure ...... 143
Table 35: Summarized payments whose vouchers were
missing: ................................................... 146
Table 36: Deferred payments ..................................... 148
Table 37: List of MDAs and RS with unclaimed salaries ....... 162
Table 38: Penalty for Delayed Staff Deductions ............... 164
Table 39: Payment to employees who were no longer in
service .................................................... 165
Table 40 Unauthorized statutory deductions from ex-
government employees ................................ 165
Table 41: Absence/inadequate Open Performance Review
and Appraisal System (OPRAS) ........................ 167
Table 42: Outstanding staff claims ............................... 169
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Table 43: Deductions made to employees over and above
two third (2/3) of the gross salary ................... 170
Table 44: MDAs/RSs which did procurement without
quotation ................................................. 176
Table 45: Assets Procured but not operational ................ 177
Table 46: Payments Made Above Invoice/Contractual ........ 178
Table 47: Procurements out of Annual Procurement Plan ... 180
Table 48: Procurement without approval of Tender
Board ...................................................... 181
Table 49: Procurement using Imprest............................ 182
Table 50: Stores procured but not accounted in store
ledgers .................................................... 184
Table 51: Stock Verifier Reports .................................. 190
Table 52: List of MDAs/RS noted with anomalies in asset
register management .................................. 195
Table 53: List of MDAs and RS lacking ownership documents 198
Table 54: List of MDAs and RS with Transfer of Development
funds ...................................................... 202
Table 55: List of MDAs and RS Non disclosure of receivables 205
Table 56: Insufficiency in government funding of
agencies .................................................. 222
Table 57: Under collection of own source revenue ........... 224
Table 58: Payment of Rent Charges by MDAs ................... 227
Table 59: Limited budget .......................................... 230
Table 60: Under release of funds ................................. 231
Table 61: TPS increase of liabilities from suppliers and staff
claims to 30th June 2013 .............................. 232

Office of the Controller and Audit Page xii

Office of the Controller and Auditor General,
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) together with 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.

Core Values
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 the
highest quality audit services based on best
practices;
Integrity: We observe and maintain the highest
standards of ethical behavior and the rule of law;
People focus: We focus on our stakeholders needs
by building a culture of good customer care and
having competent and motivated work force;
Office of the Controller and Audit Page xiii

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 appropriate training,
adequate working tools and facilities that promote
their 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.

Office of the Controller and Audit Page xiv

Foreword

Mr. Ludovick S. L. Utouh (CAG)

This is the first year the MDAs and RSs are preparing
their financial statements under IPSAS accrual basis
of accounting. I congratulate the Government
through the Accountant General for the deliberate
effort undertaken to adopt the IPSAS accrual basis
of accounting.

Apart from the challenging nature, it is beyond
doubt that if compared with the cash basis of
accounting; accrual basis of accounting provides a
more comprehensive financial information that is
important in guiding managements and other users
of financial information in arriving at more
informed decisions.

While I commend this effort, I also urge the
government through the Accountant General again,
to correctly monitor and evaluate implementation
of the roadmap towards the full adoption of the
IPSAS accrual basis of accounting.

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.
Office of the Controller and Audit Page xv

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 issue 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, 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.

Operational independence of my office has greatly
improved following the enactment of the Public
Audit Act No. 11 in 2008 and the Public Audit
Regulations (GN.47) of 2009. However, in
accordance with international standards and best
practice, there is need for further improvement in
terms of control of salaries and recruitment of staff
to enable me to effectively fulfill my Constitutional
mandate.

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
Office of the Controller and Audit Page xvi

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 financial management framework lies
with each Accounting Officer.

The Parliament and the Tanzanian citizens look
upon the Controller and Auditor General for
assurance in regard to financial reporting and public
resources management in the public sector 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 has a role
to play in contributing to Parliamentary and public
confidence building in 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 expectations of the
Parliamentarians and the public at large, NAO
continuously reviews its audit approaches and
processes 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 to discuss with our
Office of the Controller and Audit Page xvii

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 the Parliament, has
increased interactions with all Accounting Officers
of MDAs and RS. With these efforts, I believe the
Central Government has a crucial role to play in
order to make sure that the Committee is
empowered to ensure that the Accounting Officers
take actions on the recommendations issued to
them. The Committee should also make full use of
the already existing powers they have in this
regard.

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 working for many
hours in very difficult conditions marked with,
insufficient of working tools, low salaries and
sometimes working in very remote locations which
are not easily accessible.

I would also like to acknowledge the work done by
the Division of Government Assets Management
under the Ministry of Finance for preparing and
submitting reports on stock verification for the
sampled MDAs and RSs for the financial year
2012/13 that highlighted issues which features in
this report. I appreciate the work done by this
Division which I found appropriate and relevant to
be incorporated in my report.
Office of the Controller and Audit Page xviii

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. 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, 2014

Office of the Controller and Audit Page xix

Acknowledgement

I would like to express my special appreciation and
thanks to every member of my staff for their
tireless efforts in ensuring that the statutory
reporting deadline of submitting the report to H.E
the President of URT of 31
st
March was met.

I would like also to thank members of the
Parliamentary Oversight Committee - the Public
Accounts Committee, for their brilliant comments,
directives and suggestions during the hearing of
Accounting Officers. As an institution charged with
providing assurance and confirming credibility in
respect of how public funds have been utilized, we
pay critical attention to the accountability role our
Committee plays in facilitating common
understanding of the Controller and Auditor-
Generals mandate to both internal and external
stakeholders.

I acknowledge with thanks the donor community
particularly the Government of Sweden through
SIDA and SNAO, the World Bank through the PFMRP
project, the African Development bank (AfDB), GIZ,
USAID, Government of China and all well wishers
who have contributed immensely towards the
transformation of my office. Their contributions in
developing the human resource, IT systems and
physical assets of our office has had tremendous
impact in our success.

I am equally indebted to all other stakeholders
including the Minister of Finance, the Paymaster
General, all Accounting Officers of the MDAs and
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RS; Division of Government Assets Management and
Public Procurement Regulatory Authority under the
Ministry of Finance for their cooperation and
provision of 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 our
stakeholders including the public servants, media,
activists and the public at large without forgetting
the role of taxpayers of this country to whom this
report is dedicated. Their invaluable contributions
in building the nation cannot be underestimated.

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

Office of the Controller and Audit Page xxi

LIST OF ABBREVIATIONS

AAG Assistant Auditors General
ADS Administrative Sector
AfDB African Development Bank
AFROSAI-E African Organization of Supreme Audit
Institutional- English Speaking Countries
AGR Annual General Report
ATCL Air Tanzania Company Limited
BoT Bank of Tanzania
CAG Controller and Auditor General
CCTV Closed Circuit Television
CEO Chief Executive Officer
CG Central Government
CS-DRMS Commonwealth Secretariat-Debt Recording and
Management System
DAG Deputy Auditors General
DDH Designated District Hospitals
DGAM Directorate of Government Assets Management
DMO Debt Management Office
DSA Debt Sustainability Analysis
EFD Electronic Fiscal Device
EPS Economic and Productive Sector
GIZ German International Cooperation
GN Government Notice
GoT Government of Tanzania
H.E His Excellency
HCMIS Human Capital Management Information
System
IFAC International Federation of Accountants
IFMS Integrated Financial Management System
IFRS International Financial Reporting Standards
INTOSAI International Organization of Supreme Audit
Institutions
IPSAS International Public Sector Accounting
Standards
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ISA International Standards on Auditing
ISSAIs International Standards of Supreme Audit
Institutions
IT Information Technology
LGA Local Government Authorities
MAFC Ministry of Agriculture, Food Security and
Cooperatives
MDAs Ministries, Departments and Agencies
MFAIC Ministry of Foreign Affairs and International
Cooperation
MoF Ministry of Finance
MoHSW Ministry of Health and Social Welfare
MTEF Medium Term Expenditure Framework
NA National Accounts
NAIVS National Inputs Voucher Scheme
NAO National Audit Office
NAOT National Audit Office of Tanzania
NHIF National Health Insurance Fund
NIDA National Identification Authority
NSSF National Social Security Fund
OPRAS Open Performance Review and Appraisal
System
PA Public Authorities
PA&S Performance Audit and Specialized Audit
PAA Public Audit Act No. 11 of 2008
PAC Public Accounts Committee
PAR Public Audit Regulations
Para Paragraph
PCCB Prevention and Combating of Corruption
Bureau
PE Procuring Entities
PFA Public Finance Act
PFMRP Public Financial Management Reform
Programme
PFR Public Finance Regulations
PIMS Procurement Information Management System
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PMG Paymaster General
PMO-RALG Prime Ministers Office Regional
Administration and Local Government
PMU Procurement Management Unit
PO-PSM Presidents Office Public Service Management
PPA Public Procurement Act
PPE Property, Plant and Equipment
PPF Parastatal Pensions Fund
PPP Public Private Partnership
PPRA Public Procurement Regulatory Authority
PSPF Public Sector Pension Fund
RAS Regional Administration Secretariat
RAs Resident Auditors
REA Rural Electrification Agency
RS Regional Secretariat
Sect. Section
SES Service Sector
Shs. Tanzania Shillings
SNAO Swedish National Audit Office
SOS Social Sector
SSRA Social Security Regulatory Authority
TANROADS Tanzania Roads Agency
TCRA Tanzania Communications Regulatory Authority
TRA Tanzania Revenue Authority
TSSU Technical Support Services Unit
URT United Republic of Tanzania
USAID United State Agency for International
Development
VAH Voluntary Agency Hospitals
VAT Value Added Tax
VT Vote
AccGen Accountant General

Office of the Controller and Audit Page xxiv

Executive summary

This general report provides a summary of the final
audit results of the financial statements of Central
Government (MDAs, Embassies & RS) in the country
for the financial year ended 30
th
June, 2013. An
audit of financial statements is the examination of
the financial statements of an entity with the view
of expressing an independent opinion on whether
they present true and fair view of its operations in
accordance with the adopted financial report
framework. This part of the report therefore, gives
an overview of the audit outcomes followed by
highlights of salient features noted in the course of
audit and summary of recommendations.

(i) General trend of audit opinions
The statutory audit on the financial statements for
the year ended 30
th
June, 2013 which comprised of
60 MDAs, 25 RSs and 32 Tanzania Missions has been
completed. The summary of the main findings of
the audit is incorporated in this general report and
the details of the same have been issued separately
in the management letters to Accounting Officers.
The following table shows the outcome of the audit
opinion issued including the general trend:

Trend of audit opinion for the last four years
Opinion
Years Total % Total % Total % Total %
2009/10 78 76 21 21 2 2 1 1 102
2010/11 99 93 8 7 0 0 0 0 107
2011/12 103 95 5 5 0 0 0 0 108
2012/13 85 72 30 26 1 1 1 1 117
Unqualified Qualified Adverse Disclaimer
Total
Audited
entities

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The Adverse Opinion was issued to Tanzania
Embassy in Muscat and disclaimer opinion was
issued to National Consolidated Accounts.

Generally, there has been a significant regression of
the audit opinions as compared to the previous
years. Entities issued with unqualified opinion
regressed from 46 to 26 entities, representing a
decrease of 43% as compared to last years results.
While entities issued with unqualified opinion with
matter of emphasis increased to 59 from 57
recorded in the last year. Entities issued with
qualified opinions increased from 5 entities of last
year audit to 30 entities which is 6 times the last
year. Also 1 entity was issued disclaimer of opinion
and 1 entity was issued with adverse opinion during
the year which was not the case for the last year's
audit.

These audit results are not good as they signifies
that, the financial statements did not sufficiently
meet the requirements of the International
Accounting Standards, in this case; IPSAS accrual
basis of accounting. This means that, there were
some areas of the financial statements which did
not portray fair results of the operations of the
audited entities. The possible causes of these
setbacks may be due to the following factors:

a) The migration to IPSAS accrual basis of
accounting. Areas that need improvement
include accounting treatment of; expenses
incurred during the year, recognition of capital
grants received in the cash flows statement,
identification and recognition of intangible assets
Office of the Controller and Audit Page xxvi

and reconciliation between cash book and Bank
statement.

b) Weaknesses in the IFMS, whereby the same
Epicor configurations used in IPSAS cash basis of
accounting was used in IPSAS accrual basis of
accounting. As a result, accounting transactions
such as imprests were directly expensed, the
system did not recognize accrual transactions
such as payables and receivables, etc.

c) There was inadequate, capacity building through
training across departments of the audited
entities to staff who are either indirectly or
directly involved in the preparation of financial
statements.

d) Financial reporting framework is under IPSAS
accrual basis of accounting while the basis of
accounts of the budget is still under cash basis
which has resulted into mixed concepts on
accounting for various items of expenditure in
the financial statements e.g. accrual expenses
were not reported in the statement of financial
performance.

e) Adoption of IPSAS accrual basis of accounting
prior to amendment of the existing legislation
e.g. Public Finance Act No. 6 of 2001 (amended
2004) contradicts with the IPSAS accrual basis of
accounting philosophy.

Office of the Controller and Audit Page xxvii

(ii) Highlights of the salient features in the
current years audit
During the course of the audit, we once again noted
a number of weaknesses which are covered in
details under the respective chapters of this report.
These weaknesses are mainly on non compliance
with the existing legislations/regulations, lack of
proper internal control systems and where such
systems exist they are to a large extent neglected.
Major irregularities and weaknesses noted during
the course of my audit include the following:

(a) Follow up on the implementation of audit
recommendations
In my previous general reports I issued several
recommendations that needed Government's
responses. In last year's audit my report had 28
issues that needed PMG's structured responses. I
received responses from the PMG in which five
(5) issues have been cleared while the remaining
23 issues were still awaiting for responses.

I also made a follow up on the implementation
of my recommendations on the individual audit
reports issued to each of the Accounting Officers
of the MDAs. For MDAs, there were 960 issues
from 52 MDAs. Out of 960 issues, 401 (42%) were
completely implemented, 276 (29%) were
partially implemented and 283 (29%) were not
implemented at all. For Regional Secretariats
(RS), there were 578 issues from previous years'
observations in 21 RAS out of which 272 (45%)
were completely implemented, 105 (18%) were
partially implemented and 201 (37%) were not
implemented at all.
Office of the Controller and Audit Page xxviii

The analysis shows that implementation of my
recommendations is below 50%. This is not good
pace in improving Government operations and
accountability. Failure to implement audit
recommendations causes the recurrence of
weaknesses in future operations. I advise
government to hold public officers accountable
and implement the outstanding
recommendations.

(b) Follow up on the PAC report
The Public Audit Act, 2008 requires the PMG to
prepare responses and action plan on the reports
of the CAG by taking into account observations
and recommendations of the Parliamentary
Oversight Committees. Last year Parliamentary
Oversight Committees set and discussed
observations as raised in my reports from
MDAs/RS. PAC issued a total of eleven (11)
recommendations to government for
implementation through its report which was
tabled in the National Assembly on 7th
December 2013. Up to the time of writing this
report, I had not received any responses from
government concerning the implementation of
the PAC recommendations but I expect to make
follow up on their implementation in the
forthcoming audit.

(c) Funds release and budget
There have been remarkable delays in release of
funds from Treasury and probably development
partners for implementation of development
projects. This has led to delayed
implementation or non implementation of
Office of the Controller and Audit Page xxix

earmarked projects and increase in project costs
as well as having huge amounts of unspent
balances at the year end. During the year under
review, development funds to the tune of
Shs.997,940,092,853 was not released while
Shs.44,428,749,202 of the released funds were
not spent. Recurrent account had
Shs.315,463,083,291 unreleased while
Shs.35,141,163,606 of the released funds were
not spent.

In order to tackle the challenge of late release
of approved funds, the government is advised to
align Exchequer Issues with budget and revenue
collections to avoid release of funds close to the
end of the financial period. By so doing, it is
expected that planned activities will be
implemented according to the approved
timetable.

In order for the Government to reduce reliance
in the external assistance for implementation of
the national development plans, the government
is encouraged to explore alternative internal
sources of revenue. Details of findings are in
chapter four of this report.

(d) Expenditure management
On expenditure, we have noted weaknesses in
internal control systems over payments, lack of
supporting documents in payments, fruitless and
wasteful expenditure, unauthorized
expenditure, missing payment vouchers non
retirement of imprests and weak budgetary
controls together with, funds being used for
Office of the Controller and Audit Page xxx

unintended purposes. These weaknesses are
detailed under chapter four of this report.

(e) Lack of Debt Management Office
The continuous absence of a unified Debt
Management Office (DMO) is becoming a major
concern in Public Debt management in the
country. The records about the public debts
have become scattered across various players
thus making it difficult to have an accurate data
without cross examining with data from other
players.

Coordination, which is a key aspect of debt
management, is not clearly defined as BoT,
Planning Commission, AccGen, External Finance
Department, and Treasury Registrar are all
tasked with different functions of debt
management apart from their core activities.
Thus, the absence of a unified DMO has derailed
smooth coordination and operations of public
debt management.

(f) Government preparedness in implementation
of IPSAS accrual basis
On reviewing the progress of IPSAS accrual
implementation, I noted that the government
still faces challenges such as backlog activities,
lack of adequate coordination, high risk on
property, plant and equipment, and
governments budget system, financial
procedures, and policies are still on cash basis.

On reviewing the consolidated financial
statements of the United Republic of Tanzania, I
Office of the Controller and Audit Page xxxi

observed that they did not include the revenue,
expenditure, assets and liabilities of the Local
Government Authorities (LGAs) and Parastatal
Institutions which are in fact using the same
IPSAS accrual financial reporting framework.
This is contrary to IPSAS 6 which requires a
Controlling entity to issue consolidated financial
statements
which consolidates all government controlled
entities, foreign and domestic.

I also noted that, the government lacked
actuarial valuation of benefits plan for
Government retirees contrary to IPSAS 25.
Without performing actuarial valuation, the
government has failed to arrive at the initial
liability for the Defined Benefit Plans and for
that case, the Government could neither
determine the amount of actuarial gains/losses,
the past and current services nor interest cost of
the benefit plan.

(g) Assessment of Internal control system
During the year under audit, I noted that
Internal Audit and audit committees
underperformed due to inadequate staffing,
resources, and inadequate composition of audit
committees. It was also noted that most of the
MDAs/RS had no documented IT policy and IT
disaster recovery plans. Details of these
observations are in chapter five of this report.

(h) Human resources and payroll
Human resource is a driver of other resources
and therefore, it needs a special attention. On
Office of the Controller and Audit Page xxxii

Human Resource Management, we noted non
updating of staff records on the payroll,
shortage of staff as compared to established
level, weakness in staff performance appraisal
systems and delayed submission of statutory
deductions. Details of these anomalies and
recommendation thereon have been detailed in
chapter six of this report.

(i) Procurement and contract management
On procurement and contracts management, we
wish to recognize efforts made by the Public
Procurement Regulatory Authority (PPRA) in
capacity building programmes which have
significantly contributed in enhancing Procuring
entities to be more compliant with the
requirements of the Public Procurement Act No.
21 of 2004 together with its underlying
Regulations of 2005. However, some MDAs and
RS still do not comply fully with the
requirements of the Public Procurement laws in
approving tenders, functioning of procurement
management units, appointment of tender
evaluation team and goods inspection and
acceptance committees. These are detailed in
chapter seven of this report.

(j) Asset and liability management
Assets management is a key function to ensure
MDAs and RAS efficiently meet their objectives
so as to generate economic benefits. Major
problems are the lack of evidence of legal
ownership of properties and equipments Non
maintenance of fixed asset register, grounded
and un-serviceable noncurrent assets, partial
Office of the Controller and Audit Page xxxiii

valuation of assets, improper recognition of
intangible assets, misclassification of transfer
funds and unsettled liabilities. Government
through its respective accounting officers of
MDAs/RS should ensure that internal controls are
strengthened to avoid occurrence of the below
noted anomalies in the coming years .Detailed
findings are in chapter nine of this report.

(k) Special audit
Section 29 (2) of the Public Audit Act, 2008
underpinned by Regulation 78 of the Public
Audit Regulations, 2009 allows me to conduct
special audits. Under this mandate, therefore,
during the year 2012/13 I carried out four (4)
special audits for MDAs. Separate reports have
been compiled and availed to the Accounting
Officers concerned. However, details of the
special audits conducted are in chapter eleven
of this report. Salient issues raised from the
special audits are summarized below:

A special audit on payrolls and other charges in
respect of referral hospitals, district designated
hospitals and voluntary agency hospitals for the
years 2010/2011 and 2011/2012 noted payment
of salaries to non-existing employees
Shs.754,992,183, Unclaimed salaries retained in
hospitals Shs.Shs.3,047,574,792 were used to
finance other unintended activities.

A special audit on procurement of MV Misungwi
noted inadequate supervision and monitoring of
the contract between Permanent Secretary,
Ministry of Works and Sinnautic International.
Office of the Controller and Audit Page xxxiv

MV Misungwi was not officially handed over to
the Ministry of Works and Spare parts for MV
Misungwi costing Euro 41,140 were not
delivered by M/S Sinnautic International even
though they have been paid for.

A special audit on National Agriculture Input
Vouchers Scheme noted that people who were
not in the approved list of beneficiaries
received agriculture input vouchers without
following formal procedures; Inadequate
supervision by the Agricultural Extension
officers on the seeds issued by Agro dealers and
lack of seeds and fertilizers inspection. Delays
in procurement and distribution of the
agriculture input vouchers and lack of
operational manual of the system, information
on fertilizer and seed supply in the country and
poor recording keeping of the systems
transactions.

Another special audit on Mkomaindo Nursing
Training Centre noted improper record keeping
and misappropriation of fees collections.

(l) Other issues
I came up with other issues as the results of the
power vested in me under Sect. 12 of Public
Audit Act of 2008 and Reg. 34 of Public audit
regulation, 2009 which gives me power to make
recommendations to the Government for any
matter that the CAG considers to be better for
the management of Public monies, Stores,
Securities Stamps and other Properties issues.
Matters dealt with in this regard are in chapter
Office of the Controller and Audit Page xxxv

twelve where I have exercised my power and
have made recommendation on:

1) Operations of Government Executive
Agencies,
2) Government (MDAs) rental cost of office
buildings.
3) Issues relating to Management of Prisons
Department.
4) Role of CAG in auditing PPP Project and
Issues raised on Auditing of Political parties

Summary of Recommendations
It is the duty of the Accounting Officers to ensure
the existence of a sound and effective internal
control system within the Votes operations in order
to reduce the enormous internal control
deficiencies noted. Apart from the detailed
recommendations issued to Accounting Officers and
sub accounting officers for votes and
Embassies/High commissions through the individual
management letters issued to the Accounting
Officer, I have the following general
recommendations to make for this year of audit:

Non implementation of some of the previous
years audit recommendations
The government should put more efforts to ensure
that the issued audit recommendations are
attended accordingly. The Paymaster General
should instruct Accounting Officers to take
necessary measures to improve documentation,
which is one of the main causes that contribute to
missing documentation and therefore failure to
reply to some of the raised audit issues.
Office of the Controller and Audit Page xxxvi

Accounting Officers lack clearly documented action
plans to guide the implementation of the CAGs
recommendations. The action plan will be specific
for issues which cannot be done within a reasonable
short period of time, i.e. those medium and long
terms recommendations.

Insistence of having a register of implementation of
CAGs recommendation to be kept by every
Accounting Officer is another important
mechanism. A register is a good tool to record and
track outstanding audit issues not attended to
including the progress attained so far.

Lack of Debt Management Office
The need for a unified Debt Management Office at
the Ministry of Finance is one of the key issues that
were addressed during the financial year
2010/2011. I advised the government to hasten the
establishment of a unified DMO in order to
effectively and efficiently execute the government's
debt management functions.

The government also needs to take proactive and
bold measures including but not limited to,
refraining from periodically converting liquidity
papers for budget financing, improvement on
government revenue collection through TRAs
Revenue Gateway System, fiscal discipline and
effective budget estimates.

Bonded warehouses
The government is advised to ensure adequate
controls over the operation of Customs and Bonded
Warehouses in order to collect respective custom
Office of the Controller and Audit Page xxxvii

dues. In addition, TRA is urged to comply and
enforce existing legislations.

IPSAS implementation and Assets Management
Since the Government has a provision of five years
as first adopter of IPSAS accrual basis, the
Government is advised to do the following so as to
effectively use this transition period:

Allocate enough resources in terms of finances
and human capital to facilitate smooth
operation of the exercise.

The government through SSRA to fully comply
with IPSAS 25 (Employee benefits) over
accounting for Defined Benefit Plans in order to
determine its initial liability for defined benefit
plans due to IPSAS accrual first year adoption.

Establish IPSAS National Coordination Committee
made up of professional accountants/auditors
and other professions who will be overseers of
the five years roadmap to make sure each step
is taken seriously and on time. So far one year
has lapsed remaining with four years. The
committee should be chaired by the Accountant
General.
DGAM should work closely with stakeholders so
as to enhance the implementation of the action
plan for smooth compliance with IPSAS 17, and
make necessary adjustments in the financial
statements by separating land and building into
two distinct asset categories.

Office of the Controller and Audit Page xxxviii

The government is advised to initiate the
process of consolidating the financial statements
of LGAs, RSs and controlled entities in the
financial statements of URT.

To properly configure the IFMS Epicor and the
government's budget systems for these systems
to process transactions and generate financial
statements according to IPSAS accrual
requirements.

Procurement Management
Government through PPRA has to conduct several
seminars with the aim of building capacity of PMUs,
Tender Boards, Accounting Officers and User
Departments on the importance of complying with
the Public Procurement Act and its regulations. Also
its important to have Procurement Information
Management Systems (PIMS) in effective operation.
This system is hosted by PPRA. PPRA has to make
sure that this system is user friendly to end users so
that MDAs/RS can easily use this system to improve
procurement activities.

Human resource and Payroll management
The PO-PSM should revisit the establishment levels
of MDA and RS and come up with the ideal required
level. In order to ensure good performance within
the government, the audited entities noted with
high level of understaffing, should find ways of
filling the vacancies to comply with the
establishment level. Accounting officers of MDAs
and RS should work hard to ensure that they are
equipped with sufficient and qualified number of
Office of the Controller and Audit Page xxxix

staff. Shortage of staff should be communicated to
the respective authorities including PO-PSM.

Salaries Paid to non Exiting Employees
To avoid such losses in future, Accounting Officers
of the respective MDAs/RS should check their
payrolls periodically to confirm validity of all
entries. Communication should also be enhanced to
ensure that names of retirees, absconders or
terminated employees are deleted from payrolls
once they cease to be in employment. Apart from
that, Accounting Officers should ensure unclaimed
salaries in respect of employees who are no longer
in public service for one reason or another are
surrendered timely to Treasury as per given
instructions. Furthermore, Accounting Officers
should ensure that Human Capital Management
Information System (LAWSON) is fully utilized in
order to obtain the anticipated value for money in
installing the software package.

Expenditure Management
This is one of the areas noted during audit to
accommodate a number of challenges. Mostly,
these challenges are caused by having Internal
Controls which are not correctly supervised and/or
overridden by the entrusted officers.
Accounting Officers of MDAs/RS/Missions should
ensure all payments are authenticated by proper
authorities and proper supporting documents in line
with the requirement of Regulation 95(4) of the
Public Finance Regulations of 2001. Internal check
need to be strengthened including strengthening
the pre-audit functions.

Office of the Controller and Audit Page xl

Operation of overseas Tanzania missions
A separate study is ongoing in this area. However,
basing on what was noted during audit; I have the
following general recommendations to make:
The respective Embassies/High Commissions, in
corroboration with MFAIC should cease paying
Foreign Service allowances to the retired
officers who were in the missions and make
arrangement for immediate repatriation to their
place of domicile. I also recommend that
management/relevant authority should consider
recovery of the amount paid to this staff.
Embassies/High Commissions management
should communicate with the MFAIC for the
need of replacement of home based staff who
overstayed in one station. This will have positive
effects in the services delivery of the respect
embassy/missions.
MFAIC management should consider a
possibility of setting aside fund in the budget
for carrying out economic diplomacy and
promoting tourism attraction, taking into
consideration that this is an important task to
the Countrys economy.

Special audits
The MoHSW in collaboration with the Treasury
should improve communication with Hospital
managements to ensure immediate deletion of
ghost workers who are still in the Government
Computer Payrolls. District Designated and
Voluntary Agency Hospitals to adhere to the
contract agreement signed between MoHSW and
the respective Hospitals on Board members'
appointment.
Office of the Controller and Audit Page xli

Appropriate action should be taken against the
public officers who failed to supervise and
manage the execution of the Procurement
contract of MV Misungwi and Legal action should
be taken against M/S Sinnautic International who
failed to implement all works and deliver spare
parts of MV Misungwi as per contracts despite of
being paid.

In respect of the National Agricultural Inputs
Voucher Scheme (NAIVS), the Beneficiaries
registered list should be reviewed and assessed
if they truly exists and are meeting the criteria
for their existence; Agricultural Extension
Officers, the Agriculture Seeds Agency and
Agriculture Research Institutions should be
involved in the review and assessment of the
seeds and fertilizers issued in the country. The
procurement and distribution of vouchers should
be timely done and the Ministry should to come
up with a simplified Swahili version of an
operational manual of the system.

In respect of special audit conducted on
Mkomaindo Nursing Training Centre, the
Accounting Officer is urged to strengthen
internal control system including improvement
of record keeping.

Office of the Controller and Audit Page 1

CHAPTER ONE

1.0 BACKGROUND AND GENERAL INFORMATION

1.1. Audit Mandate and Rationale for Audit.

1.1.1 Audit Mandate
This report is issued in accordance with
Article 143 of the Constitution of the United
Republic of Tanzania, and Section 10 of the
Public Audit Act No. 11 of 2008, I am
required to examine, inquire into and audit
Ministries, Regions, Independent Government
Departments and Agencies.

I am required by Article 143 (2) (C) of the
Constitution of the United Republic of
Tanzania to audit and issue audit report at
least once every year in respect of the
financial statements prepared by Accounting
Officers of the Government of the United
Republic of Tanzania, financial Statements of
all Courts of the United Republic of Tanzania
and financial statements prepared by the
Clerk of the National Assembly.

On the other hand, Section 10 (2) (a) of the
Public Audit Act No. 11 of 2008 requires the
Controller and Auditor General to satisfy that
all audited financial statements have been
kept in accordance with generally accepted
accounting principles. Currently, Ministries,
Regions, Independent Government
Departments and Agencies are required to
prepare and present financial statements in

accordance with either International Public
Sector Accounting Standards accrual basis of
accounting or International Financial
Reporting Standards (IFRS).

The submitted financial statements of the
MDAs RS and Embassies/High Missions were
prepared in compliance with IPSASs -accrual
basis of accounting. Also Section 25(4) (a)
and (b) of the Public Finance Act require
Accounting Officers to submit to the
Controller and Auditor General financial
statements prepared in accordance with
generally accepted accounting practice and
in accordance with any instructions issued by
the Accountant General and approved by the
Permanent Secretary to the Treasury and
stating the basis of accounting used.
Accounting Circular No. 11 of 2012/2013
issued by Accountant General requires
Accounting Officers to prepare and present
financial statement using IPSAS accrual basis
of accounting.

A complete set of financial statements
prepared according to IPSAS - accrual basis
includes the following components:

i. Statement of financial position;
ii. Statement of financial performance;
iii. Statement of changes in net
assets/equity;
iv. Cash flows statement;
v. Statement of comparison of budget and
actual amount and

vi. Accounting policies and notes to the
financial statements.

Section 34 of the Public Audit Act, 2008 and
Regulation 88 of the Public Audit
Regulations, 2009 requires the Controller and
Auditor General after examination and audit
of all financial statements to prepare and
submit an annual general report. The annual
general report shall be submitted by the
Controller and Auditor General to the
President of URT by 31
st
March each year and
shall be laid by the Minister or appropriate
Minister to the National Assembly within
seven days of the next sitting of the National
Assembly.

1.1.2 Rationale for Audit

1.1.2.1 Audit objectives
The main objective of conducting the audit
is to enable the Controller and Auditor
General to express an independent audit
opinion on the financial statements of
Ministries, Independent Government
Departments, Agencies, Regional
Administrative Secretariats, Tanzania
Revenue Authority and Consolidated
National Accounts for the year ended 30
th

June, 2013. Also, to establish whether the
financial statements were prepared in all
material respects, in accordance with the
International Public Sector Accounting
Standards (IPSAS) accrual basis of
accounting.

1.1.2.2. Audit methodology
A risk based audit methodology is used in
auditing financial statements. It
emphasizes the need for a detailed
understanding of the entity and its
environment, including its internal
controls and risk assessment analytics, and
seeks to place reliance where possible on
governance arrangements and
organization's processes. The Offices
audit methodology is supported by a
robust Regularity Audit Manual and
TeamMate Electronic Working papers.

To ensure that the audit methodology is
kept up to date, NAOT Management
through TSSU performs an annual update
to the existing audit methodology. This
upgrade incorporates all relevant changes
to the audit, accounting, and legal
frameworks.

1.1.2.3 Audit scope
The audit was carried out in accordance
with the International Standards of
Supreme Audit Institutions (ISSAIs) to
provide reasonable assurance as to whether
the financial statements are free from
material misstatement. Audit procedures
include examination of records, internal
controls, information systems, control
procedures and statutory disclosure
requirements.
The general audit report summarizes
findings from the audit that was conducted

on a sample basis; therefore, the findings
are confined to the extent that records,
documents and information requested for
the purpose of the audit were made
available to me.

1.2.0 Applicable Auditing Standards and
Reporting Procedures.

1.2.1 Applicable Auditing Standards
The National Audit Office of Tanzania is a
member of the International Organization of
Supreme Audit Institutions (INTOSAI), the
African Organization of Supreme Audit
Institutions (AFROSAI), and the African
Organization of Supreme Audit Institutions -
English Speaking Countries (AFROSAI-E).
Cooperation with other Supreme Audit
Institution (SAIs) allows NAOT to share
knowledge and information about best
practice and development in public sector
auditing.

For the purpose of MDAs, the National Audit
Office audits in accordance with the
International Standards of Supreme Audit
Institutions (ISSAIs) issued by the
International Organization of Supreme Audit
Institutions (INTOSAI).

1.2.2 Reporting Procedures.
The effectiveness of my audit relies heavily
on good communication with the
Management of the audited entities.
Communication is necessary throughout the

audit process which involves the following
steps:
i. Issuing engagement letter to auditees
before the audit commences, to explain
the nature, timing and scope of the
audit;
ii. Preparing Overall Audit Strategy at the
end of planning to explain the audit
approach to be adopted basing on the
preliminary evaluation of the audited
entity;
iii. Conducting Entrance meeting with the
management of the audited entity;
iv. Issuing an interim management letter or
audit queries to provide a list of audit
findings and to provide management with
an opportunity to respond at the end of
an audit;
v. Issuing draft management letters to
inform the audited entities of all issues
found during the audit and provide
management with an opportunity to
respond.
vi. Conducting exit meeting with the auditee
to discuss audit findings.
vii. Issuing final management letters to
inform the audited entities of all
significant issues found during the audit
and provide management with an
opportunity to respond.
viii. Issuing individual audit report to provide
an overall opinion on the financial
statements and other aspects included in
the engagement letter.


1.3.0 Number of audited entities and NAOTs set
up

1.3.1 Number of Auditees
During the financial year 2012/2013, I
audited 116 government entities comprising
of 59 MDAs, 25 Regional Administrative
Secretariats and 32 Tanzania Missions
abroad. Individual audit reports were issued
for each of them. The proportional
distributions of these auditees are as shown
in the table below:

Table 1: Number of Auditees
Auditee Total Percentage
MDAs 59 51
RSs 25 21
Tanzania
Missions
abroad
32 28
Total 116

Apart from audit of government entities
mentioned above, I audited the Consolidated
National Accounts; pre audit of terminal
benefits and the accounts of Tanzania
Revenue Authority.

1.3.2 Set up of NAOT
The office is organized into audit teams, a
framework that attempts to align related
audit entities and to foster expertise in
various areas of audit activities. The audit
teams are headed by Resident Auditors, who
oversee and are responsible for the audits

within the assigned teams. Resident auditors
are assisted by the second in-charge. The
auditors under each Resident Auditor are
divided in teams and each team is managed
by the team leader. The Resident Auditors
are under the supervision of Assistant
Auditors General.

We have found it is useful to group our
auditees into smaller manageable locations
named Zones which are headed by Assistant
Auditors General who report to the Deputy
Auditors General. According to NAOT
structure, Deputy Auditors General report
directly to the Controller and Auditor
General. The extract of the NAOT
organogram is as shown below:

Figure No. 1: NAOT organogram extract


1.4.0 Statutory Responsibilities of the audited
entities
1.4.1 Preparation and submission of the financial
statements
Section 25(4) (a) and (b) of Public Finance
Act, 2001 (revised 2004) requires Accounting
Officers to submit financial statements
prepared in accordance with generally
accepted accounting practice and in
accordance with any instructions issued by
the Accountant General approved by the
Permanent Secretary to the Treasury. Also
the Accounting Officers are required to state
the basis of accounting used in the
preparation of the financial statements.

Further, Accounting Circular No. 11 of
2012/2013 issued by the Accountant General
requires MDAs and RS to prepare and present
financial statements in line with section 25
of PFA and in accordance with International
Public Sector Accounting Standards accrual
basis. MDAs and RS have migrated from IPSAS
cash basis to IPSAS accrual basis of
accounting during the financial year
2012/2013 towards achieving and improving
good governance and Accountability in the
management of public resources. However,
the Government adopted transitional
provisions and it is expected that the
Government will be fully compliant with
IPSAS accrual basis of accounting by the end
of the financial year 2016/2017.

Management of MDAs and RS are required to
establish and maintain appropriate internal

control systems to ensure that financial and
other records are reliable and complete, and
they adhere to management policies, orderly
and efficient conduct of the MDAs business
and guarantee the existence of proper
recording and safeguarding of assets and
resources.

Furthermore, Regulation 71(1) of the Public
Audit Regulation, 2009 requires Accounting
Officer to prepare and submit financial
statements to the Controller and Auditor
General within three months after closure of
the respective financial year, i.e. 30
th
June.
In addition, Reg. 71(2) of the Public Audit
Regulations, 2009 requires the Accountant
General to prepare and submit consolidated
financial statements to the Controller and
Auditor General within a period of four
months after the end of each financial year,
i.e. 30
th
June.

1.4.2 Preparation and submission of management
responses/replies
Regulation 86(1) (3) of the PAR, 2009
stipulates that, the Controller and Auditor
General shall compile the audit findings and
prepare a management letter and submit the
same to the management of the audited
entity. The management of the MDAs shall
provide responses on the audit observations
and submit the same to the Controller and
Auditor General within twenty one days from
the date of receipt of the management
letter. In case of failure by the management
to respond to the management letter within

twenty one days, then such management
letter will be concluded with the
management responses and the issues raised
may be incorporated into the CAG's Annual
General Report.

In addition, Regulation 93 of the PAR, 2009
requires every Accounting Officer of the
audited entity within twenty one days from
the date the general report is tabled before
the National Assembly, to prepare responses
on the individual reports submitted to them.
The accounting officers shall submit
responses to the Public Accounts Committee
and a copy to the Controller and Auditor
General.

CHAPTER TWO

AUDIT OPINION OVERVIEW, TYPES, BASIS AND THE
ACTUAL AUDIT RESULTS

2.0 An overview of the audit opinion
As started in the preceded chapters, the
central government has embarked on a bold
and a major transformation by migrating into
IPSAS accrual basis as the framework of the
preparation of the government's financial
statements, which was adopted effectively
from 1
st
July 2012. This is a very
commendable milestone made by the
government for the improvement of its
financial reporting. Thus, this being the first
time IPSAS compliant accrual financial
statements are being audited, the transition
provisions adopted under note 8 of the
audited financial statements were taken into
consideration in forming the audit opinions.
However, this migration has impacted on the
audit opinions issued during the year
because, unlike the previous years, this year
the number of MDAs issued with unqualified
opinions dropped and MDAs issued with
qualified opinions increased significantly. It
has also resulted into Embassy of Tanzania in
Muscat getting adverse opinion and National
Consolidated Accounts getting a disclaimer
opinion.

The main objective of any audits conducted
is to enable the auditor to express an
independent audit opinion as to whether the

audited financial statements have been
prepared in accordance with applicable
financial reporting framework and that they
present fairly the financial state of affairs of
the audited entity. However, this being a
public sector audit, the objective has been
broaden to include assessment of the
auditees compliance with laws and
regulations and the effectiveness of the
internal controls systems.

An audit opinion is the certification from an
independent external auditor on whether the
audited financial statements present fairly in
all material respect, the financial position,
financial performance and the cash flows of
the audited entity. This certification gives
the users of the financial statements an
assurance on the validity and correctness of
the financial statements in order for them to
make appropriate informed decisions.

2.1 Types of the audit opinions
Given the audit circumstances, the following
types of audit opinions may be expressed.
Referred to annexure 'A'
Unqualified Audit Opinion
Qualified Audit Opinion
Adverse Audit Opinion
Disclaimer Audit Opinion

Under given circumstances, I have also
included salient issues which do not affect
audit opinions which in my opinion I
considered them to be of such importance

for the users' understanding of the financial
statements. In this case I have included the
following paragraphs;
Emphasis of matter paragraph, and
Other matters paragraph

2.2 Basis of the audit opinion and the actual
audit results
2.2.1 Unqualified opinion
This type of audit opinion is issued when I
conclude that, given the sufficiency and
appropriateness of the audit evidences, the
financial statements of the audited entities
present true and fair view. This means that
the appropriate IPSAS compliant accounting
policies have been applied consistently in
preparing the financial statements,
applicable laws and regulations have been
complied with and that there are adequate
disclosures of all information relevant to the
proper understanding of the financial
statements.

During the year under review; 117 central
government entities were audited which
consisted of 60 MDAs, 25 RS and 32
1

Embassies/High Commissions, high
commission and permanent missions under
the Ministry of Foreign Affairs and
International Cooperation. Out of these
entities; 26
2
entities were issued with
unqualified opinion which is (22%) of the

1
18 Embassies, 12 High Commissions & 2 Permanent Missions
2
21 MDAs, 2 RS & 3 Embassies

total audited entities. These recorded a
decrease of 43% as compared to the last year
audit. The table 2 below shows the list of
audited entities issued with unqualified
opinion.

Table 2: List of the audited entities issued with
unqualified opinion
S/N Vote Name
1. 8 Constitutional Review Commission
2. 9 Tanzania Public Service Remuneration Board
3. 12 Judicial Service Commission
4. 13 Financial Intelligence Unit
5. 20 President's Office State House
6. 25 Prime Minister's Private Office
7. 26 Vice President's Office
8. 27 Registrar of Political Parties
9. 30 President's Office and Cabinet Secretariat
10. 31 Vice President's Office
11. 33 Ethics Secretariat
12. 34
Ministry of Foreign Affairs and International
Cooperation
13. 39 National Service
14. 47 Simiyu Regional Secretariat
15. 57 Ministry of Defense and National Service
16. 58 Ministry of Energy and Minerals
17. 59 Law Reform Commission of Tanzania
18. 62 Ministry of Transport
19. 67 President's Office Public Service Recruitment
20. 84 Singida Regional Secretariat
21. 94
President's Office - Public Service
Commission
22. 97 Ministry of East Africa Cooperation
23. 98 Ministry of Works
24. 2012 Tanzania High Commission in Ottawa
25. 2018 Tanzania Embassy in Washington
26. 2027 Tanzanian Embassy in Abu Dhabi
Source: CAGs individual reports for 2012/2013


2.2.2 Emphasis of matters
The emphasis of matters paragraph was
included in the audit report to draw users
attention to a matter or matters properly
presented or disclosed in the financial
statements that are of such importance that
they are fundamental to the users
understanding of the financial statements.
This paragraph is usually included
immediately after the respective audit
opinion

According to the ISSAIs
3
, the following issues
formed the basis of inclusion of the emphasis
of matter in my reports;
i. a substantial doubt on the sustainability
of services delivery of the audited
entities,
ii. lack of consistency in application of
Generally Accepted Accounting
Principles,
iii. uncertainties related to future outcomes
of exceptional litigation,
iv. a situation where there was an early
adoption of the reporting standard, and
v. material inconsistency of fact in the
annual report and commentary in the
financial statements where an
amendment was necessary and the entity
refused to make the amendment.

3
ISSAI 1706: Emphasis of Matter Paragraphs and Other Matter
Paragraphs in the Independent Auditors Report

During year, out of 117
4
audited entities; 54
5

of them were issued with unqualified opinion
with emphasis of matter paragraph which is
46% of the total audited entities. List of
these entities is attached to this report as
referred into annexure 'B'.

2.2.3 Other matters
Other matters paragraph was included in the
audit report to draw users attention to any
matter or matters other than those
presented or disclosed in the financial
statements that are relevant to users
understanding of the audit, the auditors
responsibilities or the auditors report. This
paragraph is usually included immediately
after the respective audit opinion and
emphasis of matter (if any).
Accordingly, the following issues formed the
basis of inclusion of the other matters
paragraph in my audit reports;
i. The identified material misstatement of
fact in other information in annual
report which required amendments but
the management of the audited entities
refused to do so,
ii. Issues related to ineffective and
inefficient audit committees, internal
audits and procurement management
units,
iii. Immaterial non compliance with laws
and regulations.

4
60 MDAs, 25 RAS and 32 Embassies
5

During year, out of 117
6
audited entities; 5
7

of them were issued with unqualified opinion
with other matter paragraph which is (4%) of
the total audited entities. The detailed list
of these entities and the basis of the other
matters is shown in table 3 below:

Table 3: List of audited entities issued with
unqualified opinion with other matters
S/N Vote Name
1 16 Attorney General's Chamber
2 65 Ministry of Labour
3 78 Mbeya Regional Secretariat
4 2007 Lusaka High Commission
5 2032 Kuala Lumpur High Commission

2.2.4 Qualified opinion
This type of opinion was issued following my
conclusions based on the audit evidence
obtained that,
The identified misstatements in the
financial statements, individually or in
the aggregate, were material but not
pervasive to the financial statements, or
In the situation where I was not able to
obtain sufficient appropriate audit
evidence on which to base my opinion,
and concludes that the possible effects
on the financial statements of
undetected misstatements could be
material but not pervasive.

6
60 MDAs, 25 RAS and 32 Embassies
7

This means that, there was either;
(i) a material limitation of scope imposed
by the management of the audited
entities or by the circumstances which
were not pervasive, or
(ii) a material disagreement due to
inadequate disclosure or inappropriate
accounting treatment which were not
pervasive.

The concept of material pointed out here
means that, the limitation of scope or
disagreement is confined to a specific area of
the financial statements but the rest of the
financial statements show true and fair View.

Specifically, the followings were issues which
were considered in issuing qualified opinions;
i. Material misstatement in the financial
statements,
ii. Material unsupported expenditures and
revenues,
iii. Material non-compliance with laws and
regulations such as; unauthorized
expenditure and use of revenue,
unreported accounts, breaches of
procurement rules and regulations,
unaccounted stocks and fixed assets,
failure to maintain stores and fixed
assets register and irregular or wasteful
expenditure as well as material losses
through criminal conduct.
iv. Material expenditure incurred for which
the government did not receive the
desired benefits

When forming this opinion, the requirements
of ISSAI 1706 was also taken into
consideration
8
.

During the year, 30
9
entities were issued with
qualified opinion out of 117 audited entities
which is equivalent to 26%. This marks an
increase of 6 times as compared to the last
years audit results which indicates that,
these entities have regressed. Annexure 'C'
shows the list of entities issued with
qualified opinion.

2.2.5 Adverse opinion
This type of opinion is issued after having
obtained sufficient appropriate audit
evidence, and concludes that financial
statements contain misstatements due to
disagreement (whether inadequate disclosure
or inappropriate accounting treatment)
which either, individually or in aggregate,
are both material and pervasive. This means
that, the disagreements distort the reliability
of the financial statements as a whole. Under
this circumstance, we conclude that, the
financial statements do not present true and
fair view.

Specific issues leading to this type of opinion
included;

8
Inclusion of other matters/and emphasis of matters
9

i. fundamental misstatement in the
financial statements,
ii. fundamental unsupported expenditures
and revenues,
iii. fundamental non compliance with laws
and regulations such as; unauthorized
expenditure and use of revenue,
unreported accounts, breaches of
procurement rules and regulations,
unaccounted stocks and fixed assets,
failure to maintain stores and fixed
assets register and irregular or wasteful
expenditure as well as material losses
through criminal conduct.
iv. Significance expenditures incurred for
which the government did not receive
the desired benefits.

During the year, one
10
out of 117 audited
entities, which is 1%, was issued with adverse
opinion.

2.2.6 Disclaimer of opinion
In the real sense over the word a disclaimer
of opinion is not an opinion but a statement
of fact that the audit could not form an
opinion. It is issued when the auditor is
unable to obtain sufficient appropriate audit
evidence on which to base the opinion, and
the auditor concludes that the possible
effects on the financial statements of
undetected misstatements could be both
material and pervasive. Under this

10
1 Tanzania Embassy in Muscat

circumstance, the auditor refuses to express
an opinion.

During the year, one
11
out of 117 audited
entities, which is 1% was issued with
disclaimer of opinion. The basis that has
resulted to the disclaimer of opinion are as
follows;

S/N Name of the Audited Entity
1. National Consolidated Account
Omission of controlled entities from the
Consolidated Financial Statements.
Para 20 states that "Consolidated financial
statements shall include all controlled entities of the
controlling entity, except those referred to in
paragraph 21". Para 21 in turn provides that, an
entity shall be excluded from consolidation when
there is evidence that the control is temporary
because the entity is acquired and held with a view
to dispose within 12 months from acquisition and
management is actively seeking for a buyer.

Contrary to this, the prepared Consolidated financial
Statements have not included consolidation of LGAs
and GBEs which should have been consolidated as
per requirements of para 20 of IPSAS 6. The reason
for non consolidation of LGAs as given on Note 2 was
that the LGs do prepare the financial statements
based on IPSAS whereas the Central government has
just started preparing its financial statements on
IPSAS Accrual basis in 2012/13. The reason provided
by the management neither satisfies the requirement
of para 21 which provides for the entities which shall
not be consolidated nor the requirement of
transitional provision under para 65 of IPSAS 6.

As for the GBEs the management claims not to

11
National Consolidated Account

consolidate them because they give dividends to the
government. This is again contrary to the
requirement of para 27 of IPSAS 6 which explicitly
states that "A controlled entity is not excluded from
consolidation because its activities are dissimilar to
those of the other entities within the economic
entity, for example, the consolidation of GBEs with
entities in the budget sector. `Relevant information
is provided by consolidating such controlled entities
and disclosing additional information in the
consolidated financial statements about the different
activities of controlled entities'.

The omission of LGAs and GBEs from the
Consolidated Financial Statement makes the
financial statements incomplete hence not
presenting a true and fair view of the National
Accounts for the year 2012/13.

Application of inappropriate transition provision as
basis for preparation of the Financial Statements.
Para 65 and 66 of IPSAS 6 provides a transitional
provision for controlling entities which have adopted
IPSAS accrual accounting for the first time on the
requirement of eliminating inter entities transaction,
balances, revenues and expenses (as required by
para 45 of IPSAS 6) for a period of three years. In line
with this, para 67, requires an entity to disclose that
not all such balances, transactions, revenues and
expenses within economic entity have been
eliminated.

The management stated on Note 2, the basis for
preparations of the financial statements that the
Consolidated financial statements on the basis of
transition provision of IPSAS 17on PPE whereby it
says that full set of Consolidated financial statement
will be accomplished in five years due to adoption of
the provision of IPSAS 17. ". This is misleading since
IPSAS 17 does not give provision for Consolidation of
financial statements rather on reporting PPE.


Inadequate disclosures.
Para 62(a) of IPSAS 6 requires among other things the
consolidated financial statements to disclose list of
all controlled entities. Contrary to this, the disclosed
list in the Consolidated financial statements was not
exhaustive as it excluded LGAs and GBEs.

Un-reconciled differences
I reviewed Bank reconciliation statements and noted
discrepancies between adjusted bank balances and
balance as per cash book amounting to
Shs.12,724,073,617.54 The discrepancies were not
reflected in the reconciliation statements nor
reconciled.

Unadjusted stale cheques
The review of bank reconciliation statement noted
stale cheques Shs.168,047,718.73 which have not
been adjusted for between two to ten years.

Export-Credit Guarantee Scheme
The review of operations of the scheme noted long
outstanding loans under Government guarantee
which had been defaulted by beneficiaries with
evidence of inability to repay the loans amounting to
Shs.8,129,556,449.15; however the Government is
yet to honour its parts despite several remainders
from Financial Institutions.

2.3 Trend of Audit Opinions
The chat below shows the trend of audit
opinions for the past four years
consecutively. They further analyse the
movement of audit opinions for the past
two consecutive years for the MDAs, RS
and Embassies Separately.


Table 4: Trend of audit Opinion for the past four years
2009/2010 2010/2011 2011/2012 2012/2013
Category
of the
Audited
Entity U
n
q
u
a
l
i
f
i
e
d

U
n
q
u
a
l
i
f
i
e
d
*
Q
u
a
l
i
f
i
e
d

A
d
v
e
r
s
e
D
i
s
c
l
a
i
m
e
r

T
o
t
a
l
U
n
q
u
a
l
i
f
i
e
d

U
n
q
u
a
l
i
f
i
e
d
*
Q
u
a
l
i
f
i
e
d

A
d
v
e
r
s
e
D
i
s
c
l
a
i
m
e
r

T
o
t
a
l
U
n
q
u
a
l
i
f
i
e
d

U
n
q
u
a
l
i
f
i
e
d
*
Q
u
a
l
i
f
i
e
d

A
d
v
e
r
s
e
D
i
s
c
l
a
i
m
e
r

T
o
t
a
l
U
n
q
u
a
l
i
f
i
e
d

U
n
q
u
a
l
i
f
i
e
d
*
Q
u
a
l
i
f
i
e
d

A
d
v
e
r
s
e
D
i
s
c
l
a
i
m
e
r

T
o
t
a
l
MDAs 7 30 12 1 0 50 13 35 6 0 0 54 28 24 3 0 0 55 21 26 12 0 1 62
RAS 3 9 7 1 1 21 0 19 2 0 0 21 7 14 0 0 0 21 2 7 16 0 0 23
Embassies 8 21 2 0 0 31 3 29 0 0 0 32 11 19 2 0 0 32 3 26 2 1 0 32
Total 18 60 21 2 1 102 16 83 8 0 0 107 46 57 5 0 0 108 26 59 30 1 1 117
Overall % 18 59 21 2 1 100 15 78 7 0% 0 100 43 53 5 0% 0% 100 22% 50% 26% 1% 1% 100%
MDAs % 7% 29% 12% 1% 0% 12% 33% 6% 0% 0% 26% 22% 3% 0% 0% 18% 22% 10% 0% 1%
RAS % 3% 9% 7% 1% 1% 0% 18% 2% 0% 0% 6% 13% 0% 0% 0% 2% 6% 14% 0% 0%
Embassies % 8% 21% 2% 0% 0% 3% 27% 0% 0% 0% 10% 18% 2% 0% 0% 3% 22% 2% 1% 0%
Trend of audit Opinions the past four years consecutively
* Unqualified with emphasis and /other matters

Figure 2: A trend of audit opinions for the past
four year


2.4 Audited entities issued with qualified,
adverse and disclaimer of opinions with
their actual specific basis of their
qualifications

As pointed out earlier in this chapter, 117
central government entities were audited.
Out of these entities, 30 entities regressed
by getting qualified opinion from 5 of last
year which is 6 times (520%). In the same
line, 1 audited entities was issued with
adverse opinion and 1 entity was issued with
disclaimer of opinion against none of the last
year.

Generally, these are not good results as it
signifies that, the prepared financial
statements did not sufficiently meet the
requirements of the international accounting
standard, in this case; IPSAS accrual basis of
accounting.

This may have been caused by the following
factors;

1) Migration to IPSAS accrual basis of accounting
for the first time where by a number of
financial statement item were not treated
appropriately especially on the following
areas;


i. Incurred expenses during the year not
charged in statement of financial
performance,
ii. Mistreatment of inventories as in some
of the financial statements, unutilized
inventories were expensed as was the
case under IPSAS cash basis of
accounting,
iii. Cash flows statements did not disclose
the financing part,
iv. Intangible assets constituted items
which did not meet the definition and
recognition criteria,
v. Non preparation of bank reconciliation
to support the closing figures of cash
and cash equivalents,

2) Weaknesses in the IFMS, whereby the same
Epicor configurations used in IPSAS cash basis
were used in IPSAS accrual basis. As a result,
accounting transactions such as imprests
were directly expensed, the system did not
recognize accrual transactions such as
payables and receivables, etc.

3) Inadequate training across departments of
the audited entities including the finance
staff who are directly involved in the
preparation of the financial statements. Also
other non finance staff who greatly
contribute in maintaining appropriate
records from which the IPSAS accrual
compliant financial statements will be
prepared.

4) A road map for IPSASs implementation on the
first IPSAS accrual financial statements for
the central government developed by the
Ministry of Finance was inadequately
followed. For instance, the Ministry was
supposed to update the accounting policies,
the accounting manual and prepare a
consolidation tree by March 2012. This
deadline was not adhered to as they were
still in draft form. There was also another
challenge in identifying annual leave liability
and other employment related liabilities as
very few audited entities incorporated them
in their financial statements.

The detailed list of audited entities issued with
Qualified and Adverse opinion and their actual basis
of their qualification is shown in Table '5' below.

Table 5: List of MDAs issued with Qualified
Opinion and the their basis

Ministries Departments & Agencies
S/N Name of the audited MDAs and the basis of
qualified opinion
1 Fire and Rescue Forces
Understatement of expenses by Shs.500,162,825
The Fire and Rescue Forces Department incurred an
amount of Shs.500,162,825 for goods and service
which were procured and received by the
Department which at the end of the financial period
the same were not paid for, the figure was omitted
in the statement of financial performance hence the
statement failed to portray a true picture of its
operations.
2 Ministry of Communication Science and Technology
Overstatement of Non-current Assets by

qualified opinion
Shs.737,827,680
Ministry reported intangible assets of
Shs.737, 827,680 as at 30
th
June 2013. However
under Note 61 to the financial statements which
explained what constitute this amount, we noted
that most of the items did not meet the definition
and recognition criteria for intangible assets as
prescribed under IPSAS 31.

Understatement of expenses in the statement of
financial performance
The Ministry incurred expenditures of
Shs.162, 073,744 that was correctly reported in the
statement of financial position as payables.
However, the same was not charged into the
statement of financial performance as expenses thus
resulting into understatement of the reported
expenses by the same amount. As a result, the
Ministry recorded neither surplus nor deficit during
the year.

Non preparation of bank reconciliation statements
Audit of cash flow statement together with
statement of financial position disclosed a figure for
cash and cash equivalent amounting to
Shs.23, 389,759 not supported by related bank
reconciliation statements contrary to IPSAS 2(56). As
a result, I could not confirm the correctness of the
amount of Cash and Cash equivalents.

3 Ministry of Agriculture Food Security and
Cooperatives
Overstatement of Non-current Assets by
Shs.6,374,281,432
The Ministry reported intangible assets of
Shs.6,374,281,432. However, these amount
constituted items, which did not meet the definition
and recognition criteria for intangible assets as per
IPSAS No.31, thus overstated the reported
noncurrent assets by the same amount.

qualified opinion

Contrary to Regulation 162 of the PFR of 2001, the
Ministry did not prepare bank reconciliations as a
result, the correctness of the amount of cash and
cash equivalent of Shs.5,648,305,420 reported in
both the cash flows statement and the statement of
financial position could not be established.

Lack of supporting documents of accounts payable
Shs.2,162,343,978
Out of Shs.44,739,685,558.75 of the payables
reported by the Ministry during the year, an amount
of Shs.2,162,343,978 was not supported by relevant
documents, thus we could not confirm its
correctness.

4 Ministry of Livestock and Fisheries Development
Unsupported Account Payables Shs.344,799,155
The Ministry reported account payables of
Shs.344,799,155 related to staff claims, but relevant
documents to support them were not produced for
verifications. Hence, its genuineness could not be
confirmed.

Unreceived Remittances Shs.752,736,291
Shs.10, 091,081,130 were transferred to Tanzania
Fisheries Research Institution and Tanzania
Veterinary Laboratory Agency. Out of the transferred
amount, the recipients did not acknowledge
Shs.752, 736,291.

Unsupported deposits balance of Shs.756,274,215
An amount of Shs.756,274,215 was reported as
deposit balance as at the end of the financial year.
However, this amount was not supported; hence we
could not verify its correctness.

5 Tanzania Commission for AIDS
Expensing of unutilized inventories amounting to

qualified opinion
Shs.222,013,632
During the year, the commission expensed unutilized
inventories valued at Shs.222, 013,632 contrary
to the requirements of IPSAS 12 (44).

Unsupported payments amounting to
Shs.79,607,500
Expenditure amounting to Shs.79,607,500 were not
supported by appropriate acknowledgement receipts
and retirement particulars. In the absence of these
supporting documents, the authenticity of the
amount paid could not be established.

Contradicting information in the financial
statements
There was a contradiction on the amount of
exchequer issues received during the year,
whereby, in the commentary to the financial
statements (pg.14) and statement of exchequer
received (pg.56) disclosed an amount of
Shs.9,167,936,780 while the statement of vote
account (pg.47) disclosed an amount of
Shs.9,691,811,644, which created a difference
of Shs.523,874,864.
TACAIDS disclosed that, 3 grounded motor
vehicles and furniture and fittings were
disposed of for Shs.31,800,000 and
Shs.4,231,000 respectively. However the
amount of disposed motor vehicles was not
deducted at all in the PPE movement schedule
to arrive at the balance as at 30
th
June 2013,
while an amount of Shs.127,787,101 was
deducted in respect of furniture and fittings
instead of Shs.4,231,000 which was disclosed in
the note.

6 Ministry of Home Affairs
Lack of supporting documents for account payables
Shs.84,295,595
The Ministry of Home Affairs reported outstanding

qualified opinion
accounts payable of Shs.84,295,595. However, this
amount was not supported by invoice, delivery note,
issue voucher and receipt voucher. For this case, we
could not confirm its correctness.

Accountability of fuel supply not confirmed
Shs.83,000,000
Audit of the supplies and consumable component
noted fuel of Shs.83,000,000 was paid to M/S CEO
Government Procurement Services Agency. However,
the audit team could not verify accountability and
utilization of procured fuel and therefore audit scope
was limited.

7 Ministry of Lands, Housing and Human Settlement
Overstatement of the Non-Current Asset by
Shs.1,582,518,051
The Ministry reported intangible assets of
Shs.1,582,518,050.97. However, this amount
constituted items, which did not meet the definition,
IPSAS No.31, thus overstated the reported

Inadequate preparation of cash flows
statement
The Ministry of Lands received Shs.1,451,862,356 for
acquisition/ construction of PPE. However, this
amount was not disclosed in the cash flows
statement as financing activities.

Ministry did not prepare bank reconciliations as a
result, the correctness of the amount of cash and
cash equivalent of Shs.5,734,804,409.97 reported in
both the cash flows statement and the statement of
financial position could not be established.


qualified opinion
Over compensation of Plot No. 2003 in Block I at
Kurasini valued Shs.2,272,000,000
The Ministry intended to compensate the owner of
the plot No. 12 Block 65 which was located in
karikoo; with Plot No. 2009 Block 2 (371 sqm)
Kurasini with reserved value of Shs.970,000,000 as it
was observed in the invoice No. 8612012 of 19
September, 2011. However, this intention was later
reversed and instead, he was compensated with plot
No. 2003 in Block 1 (131,000 sqm) with a value of
Shs.3,240,000,000 located in the industrial areas.
It was further noted that, incorrect information was
given to the Ministry regarding Plot No. 12 Block 65.
The actual area of this plot was 371 sqm against the
claimed area of 750 sqm.

Certificates of titles deeds issued but not recorded
in the Ministrys Land Data Base System
It was noted that, out of the 263,000 title deeds
issued in the Eastern Zone, only 22,740 or (9%) were
recorded in the Land Rent Data Base System leading
240,260 certificates unrecorded. This limited the
audit in establishing the amount of land rent which
should have been collected.

Surveyed Plots totaling 59,660 were not recorded
in land rent data base system
It was noted that, up to October 2013; information
from the directorate of Surveying and Mapping
indicate that 187,896 plots in DSM city had been
surveyed and obtained an approval from the Director
of Survey and Mapping . However, the Ministrys Land
Rent Data Base System shows only 128,236 plots to
have been entered into the system for collecting
annual land rent, which recorded un-reconciled
differences of 59,660 plots. Hence the audit could
not establish the amount which was supposed to be
collected.


qualified opinion
8 Prime Ministers Office
statement
The Prime Ministers office received an amount of
Shs.2,750,989,763 development/capital expenditure.
However, this amount was not disclosed in the cash
flows statement as cash flows from financing
activities as required by IPSAS 2.

Over payment to contractor Shs.25,947,276
The PMO contracted Stefnat Engineering and
Technical Services Ltd to refurbish the old German
Building and disaster management located at Oyster
bay at a contract price of Shs.3,177,477,826. The
final contract valuation reported a total
Shs.32,954,790 as a balance due for payment to the
contractor. However, the total funds paid for the
final payment was Shs.58,902,066 resulting into
unexplained difference of Shs.25,947,276 to the
contractor.

9 Ministry of Health and Social Welfare
Un supported expenditure Shs.889,209,329
Payment vouchers amounting to Shs.889,209,329
were not fully supported by proper documents, thus
we could not establish their authenticity.

Unsupported medical treatment abroad
(embassies) Shs.500,114,305
A total amount of Shs.500,114,304 was transferred to
various Tanzania embassies for medical treatment
but the expenditure return were not available at the
Ministry, thus we could not authenticate them.

Salaries paid to retired officers Shs.87,157,948
The Ministry paid Shs.87,157,948 to various officers
who were reached compulsory retirement age range
of 61 to 65 years.


qualified opinion
10 Ministry of Education and Vocational Training
Misstatement of statement of cash flow by
Shs.60,553,424,907
Development Funds amounting to
Shs.60,553,424,907 was included under cash flow
from operating activities in the statement of cash
flow for the year ending 30
th
June, 2013. However,
Development funds received was supported to be
shown as cash inflow under financing activities as
required by IPSAS 2.

Under statement of Revenue by
Shs.7,978,228,228,186
According to paragraph 10 and 11 of page 24 of the
Financial statements, the MOEVT collected revenue
amounting to Shs.7,991,535,515 for the year ending
30
th
June, 2013. However, the reported revenue in
the statement of financial performance is
Shs.13,307,329 only, being under stated by
Shs.7,978,228,186.

Understatement of current assets by
Shs.1,641,690,000
The management of MoEVT entered into contact with
the Ministry of Education CUBA for production and
delivery of teaching and learning materials for YES I
CAN Programme vide contract No. ME-
024/CTR/NQ/2012-13/27 dated 27
th
June, 2013 at a
contract sum of $1,000,000 equivalent to
Shs.1,641,690,000. However, up to January 2014
goods were yet to be delivered. Furthermore,
contrary to Accounting Circular No.11 para 2 (v) of
2012/2013 dated 27
th
May, 2013, the amount was not
disclosed as prepayments in the financial
statements.

Un reconciled cash balance Shs.692, 955,176
According to reconciliations between MoEVT and
Treasury deposits records for the year ending 30
th


qualified opinion
June, 2013; a cumulative figure since year 2008
amounting to Shs.692,955,176 being receipts in
Ministry`s Deposit Cash book but were not being
reflected in Treasury records. Also, the consolidated
reconciliation of deposit cash balance for financial
year 2012/2013 was not provided by Treasury for
audit scrutiny.

Transferred funds reported as PPE in the
statement of Financial Position Shs.
26,797,695,648
Transfer of funds to various institutions under the
Ministry, amounting to Shs.26,797,695,648 was
reported as Property, Plants and Equipments (PPE) in
the MoEVT statement of financial position as at 30
th

June, 2013.
Under such situation, the PPE figure was overstated
by the same amount.

Value of Intangible Assets not Meeting IPSAS
recognition Criteria (IPSAS31) Shs.11,978,566,813
Management reported Shs.11,978,566,813 as
Intangible Assets (Appraisal) in its statements of
financial position. However the item could not
comply with IPSAS 31 on recognition criteria and no
adjustments were made to rectify this anomaly.

Overstatement of Training expenses by
Shs.16,369,208,367
The Ministry of Education and Vocational Training
(MoEVT) reported a total of Shs.25,098,228,598 as
training related expenses in the financial statement
for the year 2012/2013. However, it was revealed
that the figure included transfers to higher learning
institutions amounting to Shs.16,369,208,367. Under
the above circumstances, the training expenses in
the statement of financial performance were over
stated by Shs.16,369,208,367.


qualified opinion
Inadequately supported expenditure
Shs.2,637,856,858
During the audit it was noted that, payment vouchers
amounting to Shs.2,637,856,858 were not adequately
supported with relevant supporting documents. The
situation is contrary to Regulations No. 95 (4) of the
PFR

11 Prisons Service Department
Unproduced contracts of building and motor
vehicles commitments Shs.1,542,000,000
As at 30
th
June 2013, Prisons Service Department
reported capital commitments of Shs.1,542,000,000
in respect of expenditure for building
Shs.242,000,000 and Shs.1,300,000,000 for motor
vehicles. However, contracts for these commitments
were not produced when requested in order to
confirm their correctness, completeness and
existence. Thus, the correctness of the amount
presented to the financial statement could not be
confirmed.

Understatement of Expenses in the Statement of
Financial Performance by Shs.19,020,339,744.10
It was noted that, during the year the Department
incurred expenses amounting to
Shs.19,020,339,744.10 that remained unpaid at the
year-end. However, this amount was not recognized
as expenses in the statement of financial
performance as a result, there was neither profit nor
loss reported during the year. Had this been
reported, there could be a loss that amount.

Prepayment not sufficiently supported
Shs.584,255,115
As at 30 June 2013, the Prisons Service Department
reported prepayments of Shs.584,255,115 in respect
of funds transferred from Treasury to MSD to
facilitate distribution of medicines to various prison
offices. However, the procedures for transferring

qualified opinion
funds from Treasury to MSD and MSDs supply of
medicine to the prison office was not clear since
there was no any document produced for audit
verification.

Unsupported payment Shs.557,243,558.80
The department made payments of
Shs.557,243,558.80 to various payees from both
Prisons Head office and Regional Offices. However,
these payments were not supported by documents
such as acknowledgement receipt, cash receipt, bills
etc. contrary to Regulation 95 (4) of PFR.

Missing payment vouchers Shs.126,090,620
During audit, we noted that, payment vouches of
Shs.126,090,620 for Prisons- Kilimanjaro Regional
Office were missing, and thus we could not ascertain
their authenticity.

12 Public Debt and General Service
Lack of actuarial valuation of Defined Benefits Plan
Public servants retirees pensions are paid from the
consolidated fund and such arrangement ought to be
recognized by the Government as Defined Benefits
Plan. My audit review of retirement benefits noted
that actuarial valuation of defined benefits was not
conducted to determine the probable liabilities due
to the government. This is contrary to paragraph 166
of IPSAS 25 that requires an entity to determine its
initial liability for defined benefit plans as the
present value of the obligations at the date of
adoption.

Long outstanding cheques amounting to
Shs.146,173,387,027
Review of the financial statements discovered the
long outstanding stale cheques amounting to
TZS.146,173,387,027 which were not adjusted in the
books of accounts for 12 years. Further scrutiny
revealed that the amount of stale cheques originates

qualified opinion
from three (3) accounts which are Public Debt
Account, Deposit Account and Consolidated Fund
Services (CFS) Account

Regional Secretariats
S/N NAME OF THE AUDITED RS AND THE BASIS OF
QUALIFIED OPINION
1 RS KATAVI
Understatement of total expenses Shs.100,333,200
Outstanding acting allowance amounting to
Shs.100,333,200 was not reflected in the statement of
financial performance hence understating the total
reported expenditure for the year by the same
amount.

Nugatory payment for service of Motor vehicle
Shs.9,905,321
Katavi Regional Secretariat paid a sum of
Shs.9,905,321 to M/s Supreme Auto Garage for service
rendered to M/s DFP 8524 Toyota Hilux D4D which got
an accident despite of the facts that, the vehicle had
valid insurance cover.

Tax payers fund adjustment not supported by
related details Shs.1,244,973,625
The Secretariat reported a Tax payers funds
adjustment of Shs.1,244,973,624.71 for the year
2012/2013, without providing supporting detailed on
such transaction to indicate what exactly the amount
is comprised of. In the absence of support
schedule/detail, the authenticity of taxpayers fund
cannot be established.

Unconfirmed cash and cash equivalent balances
reported in the financial statements
Shs.59,381,779.59
During the year, the Secretariat reported total cash
and cash equivalent balances of Shs.59,381,779.59.
However, the reported amount could not be confirmed

QUALIFIED OPINION
due to non-submission of bank reconciliation
statements.

2 RS NJOMBE
Inadequately Supported Expenditure Shs.9,030,000
Payments amounting to Shs.9,030,000 were not
sufficiently supported by relevant documents.

Understatement of Expenses in the Statement of
Financial Performance by Shs.164,424,716
It was noted that, during the year the Secretariat
incurred expenses amounting to Shs.164,424,716.
However, this amount was not recognized as expenses
in the statement of financial performance for the year
ended. In this respect, expenses in the statement of
financial performance were under stated that amount.

Non preparation of Bank Reconciliation Statements
Regional Secretariat did not prepare bank
reconciliations as a result, the correctness of the
amount of cash and cash equivalent of Shs.49,180,305
reported in both the cash flows statement and the
statement of financial position could not be
established.

Inadequate preparation of cash flow
statement
The Regional Secretariat received an amount of
Shs.180,122,269 for acquisition of PPE. However, this
amount was not disclosed in the cash flow statement
as financing activities.

3 RS TANGA
Overstatement of Intangible Assets by
Shs.36,880,000
The statement of financial position as at 30
th
June
2013 reflected intangible assets of Shs.41,254,798.
However, this balance included the consulting work as
well as Reports and documents worth Shs.26,880,000

QUALIFIED OPINION
and Shs.10, 000,000 respectively items which do not
qualify to be recognized as intangible assets. Since
they do not meet the definition of intangible assets as
para16 of IPSAS 31 they should have been expensed.

financial performance
During the year under review, RS Tanga incurred
expenditures of Shs.1,139,615,661 that was correctly
reported in the statement of financial position as
payables. However, the same was not charged into the
statement of financial performance as expenses thus
resulting into understatement of the reported
expenses by the same amount. As a result, the
Secretarial recorded neither surplus nor deficit.

Non-preparation of bank reconciliation statements
RS Tanga, reported cash and cash equivalent of
Shs.310,789,801.65 in its both statement of financial
position and the statement of cash flows. However, as
auditors we couldnt confirm the correctness of the
reported amount as it was not supported by relevant
bank reconciliations contrary to the requirements of
IPSAS 2 (56).

Inadequate preparation of Cash Flow Statement
Review of financial statements for Tanga Regional
Secretariat for the year ended 30
th
June, 2013 shows
that, cash flows from financing activities were not
disclosed. Tanga Regional Secretariat received
Shs.63,972,465 for acquisition of PPE which was not
disclosed in the cash flow statement as financing
activities.

MSD Funds
During the year under review, the Ministry of Health
and Social Welfare transferred Shs.260,036,084 to MSD
in respect of procurement of drugs and medical
supplies for Regional Hospital. However, receipt of
these funds was not recognized in the financial

QUALIFIED OPINION
statements of Tanga Regional Secretariat as revenue
though they formed part of the inventory figure at the
year-end.

4 RS SIMIYU
Incurred expenses not charged in statement of
financial performance Shs.208,920,427
During the year under review, Simiyu Regional
Secretariat incurred expenditures amounting to
Shs.208,920,427 but these were not charged into the
statement of the financial performance, thus
understated the reported expenditure by the same
amount.

5 RS KIGOMA
Overstatement of the Non-current Assets by
Shs.76,228,380
The Regional Secretariat reported intangible assets of
Shs.76,228,380 during the year. However, this amount
constituted items, which did not meet the definition
IPSAS No.31, thus overstated the reported noncurrent
assets by the same amount.

amount of cash and cash equivalent of
Shs.198,206,741 reported in both the cash flows
statement and the statement of financial position
could not be established.

statement
The Regional Secretariat received an amount of
amount was not disclosed in the cash flow statement


QUALIFIED OPINION
MSD Funds not recognize in financial statements
Shs.253,166,245
During the year, the Ministry of Health and Social
Welfare transferred Shs.253,166,245 to MSD for
procurement of drugs and medical supplies for Kigoma
Regional Hospital. However, receipt of these funds
was not recognized in the financial statements.
6 RS KAGERA
Omission of inventories balance in the financial
statements Shs.75,971,420
The Regional Secretariat did not disclose inventories
existed at the end of the year amounted to
Shs.75,971,420 thus understated the current assets by
the same amount.

Payment not supported Shs.31,320,000
The Regional Secretariat incurred expenditures of
Shs.31,320,000 but this amount was not proper
supported by relevant documents. Thus we could not
establish the eligibility of those payments.

Incurred expenses not charged in the statement of
An amount of Shs.523,895,425 was incurred the
secretariat during the year but was not charged in the
statement of financial performance, which resulted
into the understatement of the reported expenses by
the same amount. This defeats the concept of IPSAS
accrual basis of accounting, (Para 7 of IPSAS 1).

established.


QUALIFIED OPINION
7 RS DSM
statement
Dar es Salaam Regional Secretariat received
amount was not disclosed in the cash flows statement

Shs.1,395,251,823 reported in both the cash flows


Overstatement of the Non-Current Asset by
Shs.114,000,000
The Secretariat reported intangible assets of
Shs.114,000,000. However, this amount constituted
items, which did not meet the definition, and
recognition criteria for intangible assets as per IPSAS
No.31, thus overstated the reported noncurrent assets
by the same amount.

8 RS IRINGA

QUALIFIED OPINION

Inadequately supported expenditure
Shs.19,286,800
Contrary to the Reg. 86(1) of Public Finance
Regulations 2001 the Regional Secretariat made
payments amounting to Shs.19,286,800 without them
be properly supported by the relevant documents.

9 RS RUVUMA
Shs.194,545,500
Shs.194,545,500 during the year. However, this
amount constituted items, which did not meet the
definition and recognition criteria for intangible assets
as per IPSAS No.31, thus overstated the reported

financial performance Shs.687,324,501.31
An amount of Shs.687,324,501 was incurred by the

statement
The Regional Secretariat received Shs.345,019,149 for
acquisition of PPE. However, this amount was not
disclosed in the cash flows statement as financing
activities.


QUALIFIED OPINION
established.

The regional secretariat did not reconcile an amount
of Shs.180,522,758 been the difference noted
between value of inventories disclosed on the stock
taking sheet, Shs.210,168,538 and the amount
reported on the financial statements, Shs.29,645,780.

10 RS RUKWA
Payments made without proper supporting
documents Shs.11,697,050
The Regional Secretariat incurred expenditures of
Shs.11,697,050 but this amount was not proper
supported by relevant documents, which contrary to
Reg. 95 (4) of the PFR. Thus we could not establish
the eligibility of those payments.

statement
The Regional Secretariat did not disclose an amount of
Shs.338,903,914 in the cash flows statement under
financing activities. This understated the net cash
flows from financing activities.

Tax payers fund adjustment not supported by
related details Shs.1,645,021,768
The Secretariat reported a Taxpayers funds
adjustment of Shs.1,645,021,768 for the year
2012/2013, without providing supporting detailed on
such transaction to indicate what exactly the amount
is comprised of. In the absence of support
schedule/detail, the authenticity of the reported
adjustments cannot be established.


QUALIFIED OPINION
An amount of Shs.356,771,074 was incurred by the
Secretariat during the year but was not charged in the

Shs.157,532,432.49 reported in both the cash flows

11 RS MARA
Understatement of Inventory balance by
Shs.101,942,400
Mara Regional Secretariat reported inventory balance
of Shs.130,493,400 as at 30
th
the physical count during stocktaking as at that date,
the inventory balance was valued at Shs.232,435,800
resulting into its understatement by Shs.101,942,400.

12 RS ARUSHA
Shs.246,398,410.45
Arusha Regional Secretariat reported intangible assets
of Shs.246,398,410.45 as at 30
th
this amount constituted items, which did not meet the

The Regional Secretariat disclosed payables of

QUALIFIED OPINION
Shs.617,865,810.37 in the statement of financial
position as at 30
th
June, 2013. A further review
indicated that, there was neither surplus nor deficit
for the period. This implies that, expenditures
incurred during the year, which formed part of the
payables, were not charged in the statement of
financial performance contrary to IPSAS 1 Para 99.

Non disclosure of funds received from the Ministry
of Health through MSD Shs.228,532,794
The regional Secretariat did not recognize in its
financial statement, the amount of Shs.228,532,794
received during the year from the Ministry of Health
and Social Welfare through for the procurements of
drugs and other medical supplies.

14 RS SHINYANGA

Expenditure Lacking supporting documents
Shs.59,634,367.99
Contrary to Reg. 86 (1), the Regional Secretariat
effected payments amounted to Shs.59,634,367 whose
payment vouchers were not supported by relevant
documents and therefore we could not establish their

QUALIFIED OPINION
legality.

15 RS KILIMANJARO
Inadequate preparation of cash flows statement
The Regional Secretariat received Shs.987,691,895 for
acquisition of PPE. However, this amount was not
disclosed in the cash flows statement as financing
activities.

Non disclosure of received MSD funds
Shs.272,233,978
During the year, the Ministry of Health and Social
Welfare transferred Shs.272,233,978 to MSD in respect
of procurement of drugs and other medical supplies
for Kilimanjaro Regional Hospital. However, receipt of
these funds was not recognized in the financial
statements as revenue although they formed part of
the inventory figure at the year-end.

Unconfirmed utilization of fuel from GPSA
Shs.27,275,000
The Secretariat deposited to GPSA an amount of
Shs.27,275,000 for purchases of fuel for different
activities. However, a review of the fuel deposit
reports at GPSA noted that, there were neither
records for such deposits nor utilization particulars of
the fuel procured. In the absence of the records, the
amount deposited or fuel purchase may be
misappropriated.

Missing Earning Revenue Receipt Books six books
The Regional Secretariat was issued with 5 local
receipt books valued at Shs.2,500,000 and 1
Exchequer Receipt Voucher (ERV) during the year.
However, these books were not produced for audit
when called for. In the event, it could not be
established whether revenue due therein was properly
collected and accounted for.


QUALIFIED OPINION
Unconfirmed Receipt and Banking of Revenue
Collected Shs.7,116,000
During the audit we could not confirm the collection
and banking of Shs.7,116,000 related to cost sharing.

Expenditure not supported Shs.57,013,470
During the year, the secretariat had expenditures of
Shs.57,013,470 which were not supported by relevant
documents. In the circumstance we could not confirm
their genuineness. Overstatement of the Non-current
Assets by Shs.265,687,412

Shs.265,687,412 during the year. However, this
amount constituted items, which did not meet the

16 RS MWANZA
Missing and inadequate supported payment
vouchers Shs.40,211,734
It was noted during the audit that, payments vouchers
of Shs.17, 431,634 were missing while vouchers of
Shs.22,780,100 were inadequately supported. In the
absence of payment vouchers together with their
supporting documents validity and correctness of the
payments could not be ascertained thus limiting our
audit scope.


QUALIFIED OPINION
Shs.1,758,249,684 reported in both the cash flows

17 RS TABORA
Imprests charged directly as final expenditure
Shs.99,876,016.30
Contrary to Regulation 98 (2) of Public Finance
Regulations of 2001, imprests of Shs.99,876,016.30
were directly expensed.

Inadequately supported payments Shs.52,347,385
Payments amounted to Shs.52,347,385 were not
adequately supported contrary to the Regulations
No.86 (1) of the PFR.

Irregular payment made from Miscellaneous Deposit
Account Shs.7,196,920
It was noted that, payment amounted to
Shs.7,196,920 that were charged from Miscellaneous
Deposit Expenditure Account; out of which
Shs.5,000,000 was paid to settle obligation related to
the previous year which also not recorded in the
creditors register and an amount of Shs.2,196,920
was not adequately supported.

Payments made without approval Shs.13,251,180
It was noted that, Kitete Regional Hospital made
payments amounting to Shs.13,251,180 for
goods/services rendered in previous years. However,
there was no approval for such deferred payments
contrary to Regulation 85(3) of the Public Finance
Regulations, 2004 (revised in 2006).


QUALIFIED OPINION
Overstatement of deferred income-revenue
amounted to Shs.135,456,693
During the year under review the Secretariat has
recognized Shs.191,869,823.13 in statements of
financial position as deferred income revenue.
However, the reported amount included
Shs.135,456,693 being funds not released by the
Treasury to which there is no possibility that the
amount will be received contrary to IPSASs 23 Para 50.

Expenditure figure reported on cash basis
accounting
The expenditure figure reported of
Shs.6,430,648,431.96 included only cash transactions
which could be traced back from the general ledger
generated from the EPICOR accounting system.

Understatement of revenue Shs. 518,885,778.50
During the examination of financial performance of
Regional secretariat we detected that Shs.
518,885,778.50 received at Kitete Regional Hospital
from sale of drugs and medicine as well as service
provided through cost sharing and other funds from
Tabora Municipal through Basket Fund disbursement,
these entire funds have been omitted (not
recognized).

Embassies and High Commissions
S/N Name of the Audited Embassies/High Commission and
the Basis of Qualified Opinion
1 Embassy of Tanzania in Kinshasa
Opening balances not confirmed Shs.31,817,025
During the year under review, the Embassy reported on
its financial statements prepayments amounting to
Shs.31,817,025 that was paid in previous years as
rental cost. The same was not supported by evidence
to confirm their existence and accuracy.


2 Tanzania High Commission in Kampala
The High Commission reported opening balances on;
deferred income revenue, payables, and deposit
totaling to Shs.132,596,735 as at 1
st
July 2012.
However, this figure differs with the one reported as
at 30
th
June, 2013 of Shs.87,494,585 resulting into
unadjusted amount of Shs.48,893,168. There was no
explanations from the management of the High
Commission.

Table 6: List of audited entities issued with Adverse
Opinion and the basis of adverse opinion
1 Tanzania Embassy in Muscat
The Embassy reported in the statement of
cash flow a closing balance of
Shs.150,681,699 instead of Shs.639,874,314
after omitting one transaction of cash receipt
of Shs.97,065,176 and including an
unanalyzed exchange loss of Shs.392,127,439
resulting into an understatement of
Shs.489,192,615.

Unbanked Revenue collected
Shs.108,108,753
The Embassy collected Shs.564,194,173 of
which Shs.456,085,421 was banked leaving
Shs.108,108,753 unbanked and it is likely
that the money was misappropriated.
The amount misappropriated has understated
the cash and cash equivalent balance
reported.

Non-performance of Monthly Bank
Reconciliations
The Embassy did not perform bank
reconciliation for the all period from 1
st
July
2011 to 30
th
June, 2013. In the absence of
bank reconciliation, the correctness of the
cash and cash equivalent balance at the year
and could not be ascertained.

CHAPTER THREE

FOLLOW UP ON THE IMPLEMENTATION OF THE
PREVIOUS YEARS' AUDIT RECOMMENDATIONS

3.0 Introduction
This chapter presents results of evaluation on
implementation of my recommendations
given on my prior years reports. Sec 12 of
the PAA No.11 of 2008 gives power to CAG to
make recommendations and following up for
the purpose of controlling expenditure of
public monies, maximizing collection of
public revenue and enhance accountability of
public resources.
The evaluation results from MDAs and RS
were on the following areas:
I. Responses of accounting
officers/heads of departments on
individual reports submitted to them
by the Controller and Auditor General.
II. Structured responses of the Pay-
Master General to the general report
of the Controller and Auditor General
III. Responses on implementation of the
PACs recommendations

3.1 Responses of accounting officers/ heads of
departments on individual reports submitted
to them by the Controller and Auditor
General
Implementation of
CAGs
recommendations is
the requirement of
Sec 40 (1) of PAA
No. 11 of 2008. In
this years audit, 52
MDAs and 32
Embassies had a
total of 960
outstanding
recommendations
to be implemented.
Accounting Officers
have attempted to
respond to some of
my
recommendations,
and status of
implementation of
recommendations is
shown in the chart
adjacent.

Pie Chart: Status of
Implementation of the
CAG's recommendations by
52 MDAs and 32 Embassies
in terms of percentage
The pie chart above amplify that it is only 42% of
CAG recommendations that were fully
implemented by MDAs. To improve Government
operations and accountability, Accounting
Officers of MDAs needs to implements all the
recommendations of the CAG since these
recommendations have the objectives of

enhancing accountability and transparency in the
management of public resources. The non
implementation of the CAG's recommendations
amounts to non-adherence to the PAA No. 11 of
2008.

For Regional Secretariats (RS)
This financial year,
25 RS had a total of
578 outstanding
CAGs
recommendations
that needed
immediate
responses from RSs.
Government
through RSs
responded to some
of the CAG
recommendations,
and out of 578
issues only 272
(45%) were
completely
responded to by RS.
Status of
Implementation of
the CAG's
recommendations
for RS is as shown in
the chart adjacent.

Pie Chart: Status of
implementation of the CAG's
recommendations by 25 RS in
terms of percentage
RSs have to increase the pace of implementing
the CAGs recommendations. Each RS as
Accounting Officers its their obligation to ensure

that recommendations are implemented and
improve their operations.

By issuing audit observations and
recommendations CAG's main objective is to
improve the performance and enhance
accountability of MDAs/RS. It is not the CAGs
role, nor does the CAG have the power, to
enforce the implementation of these
recommendations. The primary responsibility for
implementing CAGs recommendations rests with
the Accounting Officers of MDAs/RS.

As a matter of good governance, all MDAs/RS should
have systems and processes in place to consider and,
where appropriate, implement the recommendations
of the CAG. Parliamentary Oversight Committees
also have a key role of overseeing findings and
recommendations reported by CAG to Parliament
and to enforce Accounting Officers to take necessary
actions on implementing the CAGs
recommendations.

The consequences of not acting upon the CAGs
observations and recommendations are the
recurrence of the anomalies observed by the CAG in
subsequent years. This also reflects lack of
sufficient supervision by the Accounting Officers
and management of the entities concerned.

This year, the outstanding issues being queried in
total amounts to Shs.636,849,769,109.34. A list of
outstanding matters with the corresponding
amounts from each MDAs and RS is as shown in
Annexure 'D' of this report.

3.2 Follow up on the PMG's structured responses
upon the recommendations issued by the
Controller and Auditor General on the general
report of Central Government in 2011/2012
The PAA No.11 of 2008 requires PMG to submit
consolidated response of recommendations to CAG.
On follow up of the CAG's recommendations, the
Central Government had 28 outstanding issues from
prior years reports (i.e. 2009/10, 2010/11 and
2011/2012). This financial year 2012/2013 the
Central Government has responded to
recommendations issued in the previous years
reports. The number of outstanding issues has
decreased by 6 from 28 issues last year to 22 issues
this year.

The outstanding issues that were recommended for
improvement in the previous years and their
current status as at the time of writing this report
(February, 2014) is given in a table below for
further consideration by the Government:


Table 7: PMG's structured responses
S/N
Audit
Recommendation
Response by PMG
Audit comment on the PMGs
response
1. Non compliance with
the International
Public Sector
Accounting Standards
(IPSAS) Cash Basis
The Government prepared
accounting policies and draft
accounting Manuals and
distributed to stakeholders for
comments.
Government is working hard to
update fixed asset register as
this is one of the requirements
before being fully IPSAS
compliant.
Government expect to be IPSAS
fully compliant by financial year
2016/2017
PMGs has to make sure that
the draft accounting manual
is finalized and it should
cover all necessary financial
controls as required by IPSAS
accrual basis that will help
preparation of financial
statements.

Assets register has to be
prepared and timely updated
before 2016/2017

2. Non compliance with
the Procurement laws
and related
regulations
In addressing shortfalls in the PPA
2004 and its regulations of 2005,
Government has done the following:
Government has procured a
consultant who will identify
potential areas that needs
improvement.
Since there is a new PPA
2011 and Regulations in
place, it is important to
conduct trainings/capacity
building on the new PPA
2011 and its Regulations of
2013.

S/N
Audit
Recommendation
Response by PMG
response
Capacity building by training
735 staff from MDAs and RS on
area of PPA 2004 and its
Regulations of 2005

Financial Year 2008/2009
3. Mismanagement
of Government
properties
Government conducted capacity
building to all staff from all
Embassies on how to operate VISA
Sticker Machines and hence resolve
that technical problem and any
problem can be handled by in-house
IT staff without engaging any
consultant from outside.
I have acknowledged the effort
made by PMG, and considering
the importance of Visa Sticker
machines on revenue collection,
verification will be made in my
next year audit of embassies and
missions

4. Ownership of Land
and Buildings in the
embassies/mission
Land and buildings are owned by the
Ministry of Foreign Affairs and
International Cooperation and TBA is
only involved in
acquisition/Construction
The aim of the findings was to
obtain evidence for Government
ownership of all land and
buildings of Embassies/ mission
(i.e. Title deeds).

5. Measures taken to
address Tax appeals
Management of TRA has written a
letter with reference
No.TRA/SB/2.1/Vol.4 dated
The PMG needs to make follow up
with the Attorney General in
order to conclude this pending

S/N
Audit
Recommendation
Response by PMG
response
17/01/2012 to Attorney General
seeking assistance in resolving
pending case. Also TRA wrote a
letter with reference No.
TRA/CG/L.1/Vol III dated 11
th
Sept
2012 to Ministry of finance seeking
similar assistance.
issue.
Financial Year 2010/2011
6. Under-collection of
revenue
In order to increase revenue
collection, TRA under took study in
2011 to propose viable tax regime to
pull the informal sector in the tax
net.
Also TRA developed a 2
nd
Medium and
long term revenue mobilization
strategy and the 4
th
Corporate Plan
that illustrates the revenue
mobilization strategies for the period
2013/2014 to 2017/2018
Other key strategies include:
i) Introduction of a new
integrated domestic tax

Assessment of TRA developed
second medium and long term
revenue mobilization strategy
and the 4
th
corporation plan
that seems to increase
revenue collection will be
evaluated stating with coming
financial year to see if there
is increase in revenue
collection.

However TRA is encouraged
to explore available

S/N
Audit
Recommendation
Response by PMG
response
administration system.
ii) Implementation of tax
compliance strategies for all
tax payer population
iii) Designing/improving the tax
structure on natural resources
iv) Review of corporate income
tax exemptions on export
processing and special
economic zones
v) Enhance collections from
informal sector by introducing
threshold to small scale
taxpayers
vi) Tax exemption to some
beneficiaries
vii) Initiated process to revamp
VAT act to expand tax base
viii) Inclusion of Films and Music
Sub sector in tax net
ix) Expansion of tax base by
introducing other items like
opportunities to expand the
tax base so as to maximize
revenue collection

S/N
Audit
Recommendation
Response by PMG
response
bolted water
x) Increase tax registration from
1,035,281 in June 2012 to
1,514,368 in Dec 2012
xi) Expanded revenue to GDP
ratio from 15.6% in 2012/2013
to 17.8% in 2015

7. Measures to improve
annual collection
targets
TRA provide education through
Seminars to stakeholders, TV and
radio to enhance Tax compliance
by emphasizing the importance
of using EFDs.

Other measure is carrying out
abrupt tax compliance inspection
and tax payers without fiscal
receipts have been denied of
input tax claim so as to motivate
them to use EFD.

The Government should devise
strategies for curbing tax evasion;
expanding the existing tax base;
bringing the informal sector to
the tax net; eliminate
unnecessary bureaucratic
procedures in the current tax
regime in order to encourage
voluntary tax compliance etc.

S/N
Audit
Recommendation
Response by PMG
response
8. Salaries paid to non-
existing employees
Verification of existing
employees done between Dec
2011 and March 2012 revealed
that 10,164 employees were non-
existing and deleted from the
payroll.

After this exercise Government
collected a total of Shs. 7.56
Billion from LGAs and
Government Institutional through
BOT account No 9921141201 as
at 6
th
June 2013 which would
have been paid to non existing
employees.

Payment to non-existing
employees still noted in 2012/13.

Hence there is a need to
strengthen controls over payroll
for MDAs, LGAs and RS.
9. Payments to ineligible
pensioners
A total of 124 Pensioners accounts
were suspended for further
verification. Scanning of pensioners
files is on progress. This will
eliminate irregular payments to
ineligible pensioners.
All verification reports should be
submitted for audit scrutiny.

S/N
Audit
Recommendation
Response by PMG
response

10. Management of
Government
Guarantees
Government is conducting review of
Government loans, Guarantees and
Grants Act. No 30 of 1974 and its
revision of 2004, as well as review
the National Debt Strategy (NDS) of
2002 to accommodate major changes
and amendments of some clauses in
the Act and expected to be
completed by August 2013 and
expected to be prepared and
submitted in the cabinet by
September 2013

The response has been noted.
Awaiting for the amended Act and
review of the National Debt
Strategy (NDS).
11. Outstanding
commodity
import support
The Treasury through a debt
collector collected a total of JPY
70,621,810.98 equivalent to
Shs.776,839,920.78 and remaining
balance is JPY 16,628,878,047.02

Response noted. The PMG has to
make sure that the remaining
balance is also collected.
12. Outstanding liabilities
and commitments
Government has strengthened
revenue collection as the effort of
The response has been noted.
TRA need to increase revenue

S/N
Audit
Recommendation
Response by PMG
response
eliminating mismatch between
revenue and expenditure by
educating public importance of
paying tax and identifying tax
loopholes and recommend best
practice to maximize revenue
collections

collection and Treasury should be
releasing funds on time to
facilitate implementation of
budgeted activities
13. Assets not recorded in
the fixed assets
register
Codification of assets in all MDAs, RS
and LGAs will be conducted by phase
including speed up of automation of
fixed asset register in EPICOR 9.05
PMG has to provide schedule
showing phases for implementing
this recommendation.
Assets register need to be in full
use before fully adoption of IPSAS
Accrual in year 2016/2017.
14. Tax exemptions Government under TRA and MoF
conducted a study on Tax exemption
and came up with the following
recommendations:
Streamlining VAT exemptions by
limiting a number of Zero rated
items to export only and
reducing non-standard
PMG's responses on Tax
exemptions are noted. However,
the PMG need to come up with
the time frame for all the
strategies listed.


S/N
Audit
Recommendation
Response by PMG
response
exemptions under VAT including
special relief category
Legislating for comprehensive
analysis and reporting of tax
expenditure for all taxes,
beneficiary categories, and
relevant sectors as part of
budget documentation
Granting of exemption after
identification of alternative
revenue source to replace
Legislating a time limit for any
tax concession, exoneration or
exemption granted
Abolishing granting of tax
waiver on imports of households
consumables/food stuffs as
proven evidence shows that the
prices relief intended to the
final consumer is never realized
Empower MoF for undertaking

S/N
Audit
Recommendation
Response by PMG
response
relevant analysis and prepare an
annual tax expenditure report
as a compulsory appendage to
the Government budget

15. Misclassification of
direct loan issued by
Government as
guarantees
Government through MoF, BoT and
TIB are reviewing the proposals from
flower companies with a view to
make restructuring to enable them
to start repayment of Government
loans. This is expected to be
completed by the end of June 2013
and submitted to Minister of Finance
for approval and all companies are
expected to start repayment of loan
on July 2013.
PMG has to submit approved
restructuring agreement entered
between flowering companies and
GoT and loan repayment schedule
plus any evidence showing that
the repayment of the loans by
these companies has started
16. Inadequate
Government
involvement in Design
and Build agreements
such as UDOM and the
like.
The Government will commission a
consultant to carry out value for
money audit to determine the actual
costs involved and eligibility and
legitimacy of the claims being raised
by the Social Security Funds after the
The status of the implementation
of the PMG's response will be
verified during the next audit.


S/N
Audit
Recommendation
Response by PMG
response
receipts of the project reports.

Financial year 2011/2012
17. ATCL debt The matter of holding accountable
those who violated the procedure by
entering lease agreement for Airbus
A320 is now under PCCB
investigation.

Investigation outcome is awaited.
18. Unsupported
payments for medical
treatment abroad
Shs.448,144,343
Government instructed
respective Ambassador to insure
that expenditure returns on
medical treatment abroad are
furnished by issuing letter with
Ref No. CHA.446/564/01/06
dated August 2011
.
Also internal controls systems in
all payments are being improved
to make sure that all documents
are available before any
payment.
Clearance of this item is still
awaited.

S/N
Audit
Recommendation
Response by PMG
response

19. Payments of previous
years liabilities using
2011/12 approved
appropriations
Shs.252,975,000,000
In Financial year ended 30
th
June
2011, GoT ended with
contractual claims on Shs.420
Billion. GoT decided to fund
Ministry in financial year
2011/2012 through project No
4168-special Road Construction
Projects an approved budget by
Parliament.

The objective of this was to pay
Contractual claims for ongoing
projects and funds was utilized
as intended and contributed
positively on progress of road
works

Special Audit Commissioned by
PAC is ongoing.
20. Government payments
to PSPF for pension
liability

No PMG responses for this matter. -

S/N
Audit
Recommendation
Response by PMG
response
21. Long Outstanding
Deposits at Secondary
Schools
Shs.1,551,005,412

22. Long outstanding
Imprests
Shs.706,701,016

3.3 Responses on implementation of the PACs
recommendations
This section covers implementation status of
PAC recommendations as per the
requirements of the Public Audit Act, 2008.
The Section requires PMG to prepare
responses and action plan on the reports of
CAG by taking into account observations and
recommendations of the Parliamentary
Oversight Committees. The chairman of PAC
presented the Committees report inclusive
of recommendations concerning the accounts
of MDAs for the financial year ended 30
th

June, 2012 to the National Assembly on 7
th

December, 2013. However, PMG's responses
have not been received up to the time of
consolidating this report i.e. February 2014:


Table 8: PAC's recommendations from the report
S/N
Para
No
Issue PAC Recommendation
Audit Comments
1 4.2.1 On Issue of Not
publishing Audited
Accounts of
Political Parties for
the past four years
due to lack of funds
CAG to audit accounts of
political parties from
the financial year
2009/2010 to 2011/2012
and reports to be
completed before at 31
January 2014 and the
Registrar of Political
Parties publish them in
the Gazette and other
newspapers as required
by law.
Parliament in the
coming years should
allocate enough money
to Vote 45 - National
Audit Office to enable
CAG to conduct audit of
the accounts of Political
Parties without
CAG has started
auditing political
parties' accounts.
As of now, the
audit of political
parties is on going

S/N
Para
No
Audit Comments
restrictions.

2 4.2.2 On Non Compliance
of Public
Procurement Act of
2004
GoT has to enable PPRA
to perform its activities
effectively and PPRA has
to ensure that before
June 30, 2014 all
Government institutions
have Procurement
Management Units
(PMUs) and procurement
programs of fiscal year
2014/2015 drawn up
correctly;
Increase controls in
procurement to ensure
that all MDAs/RS comply
fully with the
requirements of PPA of
2004. E.g. by recruiting
competent procurement
personnel, conducting
We will review
the
enforcement of
the new Act
and its
Regulations
PPRA has to
build capacity
and increase
awareness of
the new PPA
and
Regulations.

S/N
Para
No
Audit Comments
capacity building and
strengthening tender
boards and internal audit
units
Complete Regulations for
the implementation of
the new procurement
Act in 2011 so that it can
be enforceable and
efficiency
Before the Government
enters into any contract
which involves the public
interest, PPRA should do
the pre-audit of contract
before being signed.
To facilitate PPRA to
establish electronic
procurement systems
3 4.2.3 Control in the
provision of tax
exemptions
Finance Ministry has to
give the National Audit
CAG has
commissioned a
detailed study on

S/N
Para
No
Audit Comments
Office, a list of all the
exemptions granted for
each month for the
purpose of conducting
audit of tax
exemptions;
Amend the PAA No.11
of 2008 to enable CAG
to audit all tax
exemptions and provide
its audit reports.

tax exemptions
4 4.2.4 Handling Tax claims
Court Cases.
Consider imposing
disciplinary measures to
all staff who are the
cause of these cases.

Office of the Attorney
General to function with
integrity and focused on
defending the
Government with the aim
Court rulings
on the
pending cases
will be
followed.

S/N
Para
No
Audit Comments
of winning the case.

5 4.2.5 Termination of use
of meters to
measure fuel load
carried by TPA,

Government should
explain to Parliament
the underlying reasons
for stopping the use of
these meters.
TRA should identify
impact on revenue
collection resulting from
termination of the use of
these meters.

Response from
PMG is
awaited.
6 4.2.6 Management of
contract on
production of
Driving Licenses

TRA has to make sure
that it reviews the entire
contract and do analysis
of all the weakness of
the contract for
amendments.
CAG to make special
Audit and then submit its
Currently, the
special audit on
the driving
licenses is in
progress.

S/N
Para
No
Audit Comments
report to the
Committee;
All contracts which
involve the provision of
tax exemptions should
be reviewed by Attorney
General before signing.
In addition, the TRA also
should be involved in
order to provide
professional advice by
ensuring that tax relief
does not affect revenue
collection.

7 4.2.7 Increase revenue
collection in the
telecommunications
sector

For the purpose of
obtaining accurate
information on revenues
from telecom
companies, TRA and
TCRA should have close
cooperation in exchange


S/N
Para
No
Audit Comments
of information and
transactions from
telecom companies;
Government through the
TCRA has to complete
quickly testing the
Telecommunication
Traffic Monitoring
System to identify the
amount, type and actual
value of transactions
carried out by
companies. The aim
should be to launch on
January, 2014 for the
purpose of raising
collection of TRA in the
communications
industry.
Government has to make
amendments on laws on
allowable deductions on

S/N
Para
No
Audit Comments
advertisement expenses
at least not to exceed 3%
of revenue.

8 4.2.8 Disbursement of
adequate funding
to the Rural
Electrification
Agency (REA)

PAC recommended that in the
financial year 2014/2015
Government should provide
REA with enough funds from
its own sources to facilitate
Rural electrification

9 4.2.9 Repayment of
Government debt
to PSPF

The Government should
continue to set aside and
pay every year Sh. 71
billion to PSPF to enable
the fund to continue to
provide pensions for
retirees without
restrictions;
PSPF should invest and
issue loans to various
institutions by considering
Response from
PMG is
awaited.

S/N
Para
No
Audit Comments
its financial capacity to
avoid danger of failing to
sustain the fund.
Social Security Regulatory
Authority (SSRA) has to be
proactive in managing the
level of investment and
loans offered by the
Social Security Funds not
to exceed the capacity of
such funds.
10 4.2.10 Delays in funding
and the budget
deficit for our
embassies/mission
abroad.

Through the Ministry of
Foreign Affairs and
International
Cooperation and the
Ministry of Finance all
Embassies/Missions have
to impose an effective
strategy to ensure Visa
Sticker Machine are
working.
Ensure that the IFMS is
Study on
overseas
missions
budgets is
ongoing and
report will be
published as
soon as it is
completed

S/N
Para
No
Audit Comments
working well in our
embassies to create
value for the cost
involved in the purchase
and installation of the
system and also avoid
losses to the
Government that can be
caused by not using the
system.
In addition, the Ministry
of Foreign Affairs and
International
Cooperation in
collaboration with the
Ministry of Finance
should find a way to
reduce operating costs
of the IFMS in embassies.


S/N
Para
No
Audit Comments
11 4.2.11 Strengthening
revenue collection
of the Ministry of
Lands, Housing and
Human Settlements
Development.

Ministry of Lands,
Housing and Human
Settlements
Development should
strengthen the internal
control systems over
revenue collection
In order to increase
controls over revenue
collection, the Ministry
despite using its system
of Land Rent
Management System
(LRMS) should also start
using the Electronic
Fiscal Devise (EFD) in
collecting government
revenues.

LRMS to be linked to the
Taxpayer's identification
number (TIN) to


S/N
Para
No
Audit Comments
determine the actual
number of taxpayers
with the aim of reducing
current existing land
disputes.
The Ministry should find
specific mechanisms that
would ensure taxes that
are outstanding in
different plots are
recovered as soon as
possible.


I acknowledge support that my office is
getting from PAC, by taking necessary actions
on recommendations that I make in my
reports that makes my statutory
responsibilities being useful. It is very
important that all matters raised by PAC are
well handled and all recommendations are
properly implemented. Implementing PACs
recommendations, Government will be in a
position of maximizing its revenue collection,
controlling expenditures and will bring about
better accountability of public monies.


CHAPTER FOUR

PUBLIC FINANCE MANAGEMENT

4.1 REVENUE COLLECTION AND FUNDING
ANALYSIS

4.1.1 Overview of revenue collection
performance
During the year under audit 2012/2013 total
government estimates was Shs.15,191.94
billion, whereas actual collections was
Shs.15,018.27 billion indicating under
collection of Shs.173.68 billion equivalent to
1.1 percent.

The sources of revenue include Domestic
Revenue (Tax revenue), Non Tax Revenue,
Financing Income, Internal borrowings and
External Assistance.

In the financial year 2012/2013 actual
revenue collected from domestic revenue
(tax revenue) was Shs.8,052.23 billion as
compared to the target of Shs.8,432.36
billion showing under collection of Shs.380.13
billion equivalent to 4.51 percent.

Non tax revenue collected during the year
was Shs.419.56 billion as compared to a
target of Shs.644.58 billion showing under
collection of Shs.225.02 billion equivalent to
35 percent.


Actual collection from financing income was
Shs.61.59 billion as compared to approved
budget of Shs.72.26 billion, resulting into
under collection of Shs.10.66 billion
equivalent to 15 percent.

Actual Internal Borrowing was Shs.2,492.71
billion against approved budget of Shs.1,632
billon resulting to borrowings above the
estimates by Shs.860.71 billion equivalent to
35 percent.

Actual External Assistance received was
Shs.3,992.17 billion against approved budget
of Shs.4,410.81 billion showing external
assistance not received amounting to
Shs.418.64 billion equivalent to 9 percent.


Table 9: The estimates and actual revenue
performance for the financial year 2012/2013 and
2011/2012
Item
Approved estimates
(Shs.)
Actual Collections
(Shs.)
Variance
(Under)/Over
Domestic
Revenue (Tax
revenue)
8,432,294,000,003 8,052,228,708,823 -380,065,291,180
Non Tax
Revenue
644,581,942,670 419,561,845,673 -225,020,096,997
Financing
Income
72,258,159,415 61,594,970,635 -10,663,188,780
Internal
borrowings
1,632,000,000,000 2,492,710,243,677 860,710,243,677
External
Assistance
4,410,810,197,912 3,992,172,544,006 -418,637,653,906
Total 15,191,944,300,000 15,018,268,312,814 -173,675,987,186
Approved estimates Actual Collections
Variance
(Under)/Over
Domestic
Revenue (Tax
revenue)
6,228,835,792,139 6,414,806,314,206 185,970,522,067
Non Tax
Revenue
692,737,853,273 719,960,110,049 27,222,256,776
Financing
Income
204,874,736,788 208,132,532,126 3,257,795,338
Internal
Borrowings
1,204,262,000,000 1,639,365,483,932 435,103,483,932
External
Assistance
5,195,184,967,800 3,168,234,333,111 -2,026,950,634,689
Total 13,525,895,350,000 12,150,498,773,424 -1,375,396,576,576
2012/2013
2011/2012

Source: Audited Consolidated Financial Statements of 2011/2012
and 2012/2013


Basing on the table above, there is an
increase of tax revenue estimates in the
financial year 2012/2013 by 35 per cent
compared to the estimated of the financial
year 2011/2012. Non tax revenue falls short
by 7% in the financial year 2012/2013 when
compared with estimate of the financial year
2011/2012. There is a decrease of estimate
for financing income by 65% when compare
to the estimated amount of the financial
year 2011/2012.

Further to the approved budget, there is an
increase of tax revenue collections by 26% in
the financial year 2012/2013 when compared
with the collections of the financial year
2011/2012. However, non tax revenue
collections decreased by 42 percent when
compared to the collections in the financial
year 2011/2012. There was a decrease of
financing income by 70 percent when
compared to the financial year 2011/2012.

Internal borrowings and external assistance
increased by 52 percent and 26 percent
respectively in the financial year 2012/2013
when compared to the financial year
2011/2012.

Despite that, there was an increase of
revenue estimates by Shs.1,666.05 billion
and actual collections by Shs.2,867.77 billion
in the financial year 2012/2013 by 12 percent
and 24 percent respectively, compared to
the financial year 2011/2012. But budget

performance in the financial year 2012/2013
was not favorable as most of the targets
were not achieved compared to the financial
year 2011/2012.

4.1.2 Budget execution, exchequer released and
amount spent for vote accounts:

4.1.2.1 Actual exchequer released for MDAs,
Embassies and RS on Supply Vote Account
against Approved budget.
A review of MDAs and RS financial statements
noted a decrease of recurrent budget by
Shs.615 billion equivalent to 6.7 percent in
the financial year 2012/2013 compared to
Shs.9,214.89 billion of the previous year.
In addition, there is a decrease of exchequer
issues by Shs.402.81 billion as compared to
last year exchequer issues released.

Exchequer issues released for the financial
year 2012/13 for supply vote account was
Shs.8,284.42 billion against approved budget
of Shs.8,599.88 billion showing under release
by Shs.315.46 billion which amounts to 3.7
percent.

Exchequer issues released in the financial
year 2011/2012 was Shs.8,687.23 billion
against approved budget of Shs.9,214.89
billion indicating under release by Shs.527.66
billion which is 5.7 percent.


Supply vote:
F/Y 2011/12 2012/13 Variance
%
(increase)
/decrease
Approved
estimates
9,214,885,955,263 8,599,882,738,758 615,003,216,505 7
Exchequer
released
8,687,230,788,550 8,284,419,655,467 402,811,133,083 5
Unreleased
funds
527,655,166,713 315,463,083,291 212,192,083,422 40

The decrease in exchequer issues for supply
vote in financial year 2012/13 eventually
affected implementation of recurrent
activities in relation to the financial year
2011/12.

4.1.2.2 Exchequer issues released for MDAs and
RS on Development Vote Account
compared to the budget.

MDAs Development vote approved budget for
the financial year 2012/2013 was
Shs.4,224.70 billion while in the financial
year 2011/2012 it was Shs.4,311.01 billon
registering a decline by Shs.85.53 billion.

There is also a decrease in exchequer issues
released by Shs.136.90 billion in the financial
year 2012/2013 when compared with the
financial year 2011/2012.


The total of Shs.3,247.53 billion was released
as exchequer issues in the financial year
2012/2013 against approved budget of
Shs.4,224.70 billion being under release by
Shs.977.94 billion equivalent to 23.1 percent.

Development vote:
% (increase)/
decrease
Approved
estimates
4,311,009,394,737 4,225,474,934,851 85,534,459,886 2%
Exchequer
released
3,384,431,758,346 3,247,527,081,386 136,904,676,960 4%
Unreleased
funds
926,577,636,391 977,947,853,465
Financial Year 2011/2012 2012/2013 Variance

The decrease in exchequer issues for
development vote in financial year 2012/13
in relation to the financial year 2011/12,
eventually affected implementation of
development activities.

4.1.2.3 Exchequer Issues received compared to
Actual Expenditure for Supply Votes of
MDAs, Embassies and RS
Recurrent expenditure for the financial
year 2012/2013 was Shs.8,249.28 billion
against the exchequer issues released of
Shs.8,687.23 billion resulting to unspent
amount of Shs.35.14 billion.
There is a decrease of actual expenditure
by Shs. 436 billion in the financial year
2012/2013 when compared to the actual

expenditure reported in the financial year
2011/2012.

Table 12: Analysis of exchequer issues and
actual expenditure for the supply
vote for the financial years
2011/2012 1nd 2012/2013.
Item 2011/2012 2012/2013 Variance
%
(increase)/
decrease
Exchequer
released
8,687,230,788,550 8,284,419,655,467 402,811,133,083 5
Actual
Expenditure
8,685,275,162,094 8,249,278,491,861 435,996,670,233 5
Unspent
funds
1,955,626,456 35,141,163,606

In overall spending for supply vote, there
was a decrease in spending in the
financial year 2012/13 in relation to the

4.1.2.4 Exchequer Issues received compared to
Actual Expenditure for Development
Vote Account for MDAs and RS
In the financial year 2012/2013 exchequer
issues released for development vote was
Shs.3,247.53 billion whereas actual spending
was Shs.3,203.10 billion resulted into
unspent balance of Shs.44.43 billion
equivalent to 1.4 percent.
There is a decrease of actual spending in the
financial year 2012/2013 by Shs.173.20
billion as compared to last years spending.


Table 13: Analysis of exchequer issues released for
development vote.
Financial
year
2011/2012 2012/2013 Variance
% (increase)/
decrease
Exchequer
released
3,384,431,758,346 3,247,527,081,386 136,904,676,960 4
Actual
Expenditure
3,376,296,146,186 3,203,098,332,184 173,197,814,002 5
Unspent
funds
8,135,612,160 44,428,749,202

Source: Individual MDAs and RS audited reports of 2012/2013 and
Consolidated Financial Statements of 2011/2012

In overall spending for development vote,
there was a decrease in spending in the
financial year 2012/13 in relation to the

The audit results show that, the overall
situation of the Central Government budget
implementation and other government
revenues and expenditures in 2012/2013 was
fine. Strengthening and improving macro-
control to ensure stable and fairly rapid
economic development, compliance with
Acts, Regulations and different Circulars
contributes to increase in Government
revenue though it was below targets set.
Revenue performance over the past three
years shows gradual increase in domestic
revenue budget/estimates coupled with
increase in actual collections. Drastic
measures are deemed crucial in this regard,
which includes, increase domestic revenue

collections and adjust the budget structure
to affordable levels.

The Government has to prepare realistic
budgets, disburse funds as per approved
budget which will foster budget execution
and minimize budget reallocations. Also,
further improvements are needed in revenue
predictions in both local and foreign funding
including imploring on Development Partners
to make their grants on time.

4.1.3 Comparison of Non-Tax Revenue collections
and approved budget
The approved budget for non tax revenue for
MDA, Embassies and RS for the financial year
2013 was Shs.644.51 billion, Shs.15.97 billion
and Shs.0.65 billion, respectively. Actual
collections was Shs.461.14 billion, Shs.19.92
billion, and Shs.2.13 billion, respectively. For
MDAs there was under collection of
Shs.183.38 billion equal to 28 percent of the
approved budget, Embassies over collection
by Shs.3.95 billion equal to 28 percent of the
approved budget and Regional Secretariat
over collection by Shs.2.06 billion equal to 32
times above their approved budget.

The approved budget during the year
2011/2012 of Non Tax revenue for MDAs,
Embassies and RS was Shs.342.18 billion,
Shs.13.50 billion and Shs.0.65 billion,
respectively. Actual collections was
Shs.361.33 billion, Shs.21.41 billion and
Shs.8.13 billion, respectively.

Cumulatively, non tax revenue was
Shs.483.18 billion while total budget was
Shs.660.55 billion registering under
collection by Shs.177.36 billion which is
26.9%.

Table 14: Summary of non-tax revenue (Amount in
Shilling millions)
Item
MDA RS EMBASSIES Total MDA RS EMBASSIES Total
Approved
estimate
644,515 65 15,968 660,548 342,176 65 13,503 355,744
Actual
collection
461,138 2,128 19,918 483,184 361,334 8,130 21,413 390,877
Over/(under)
collection
(183,376) 2,063 3,950 (177,363) 19,158 8,065 7,911 35,134
FY 2012/13 FY 2011/12

Sources: Individual MDAs and RS audited reports of 2012/2013

Figure 5: Revenue Trend for MDAs, RSs and
Embassies

Sources: Individual MDAs and RS audited reports of 2012/2013

The government has to improve the
performance of non tax revenue by having a
realistic budget and ensure that MDAs collect

all the budgeted non tax revenue, which will
eventually ensure the fiscal balance.

4.1.4 Unreimbursed Shs.3,501.5 million from
retention scheme
The government has an arrangement with
five MDAs to deposit revenue collections to
the Consolidated Fund of which an agreed
proportion is reimbursed to the respective
ministries under the retention scheme
agreement.

During the audit process it came to our
notice that the amount of Shs.3,501.5 million
being retention funds for the Ministry of
Community Development, Gender, and
Children; and Ministry of Land and Human
Settlement Development of Shs.225,408,501
and 3,276,065,574 respectively were not
remitted to the respective ministries.

The government has to implement the
retention scheme policy by
retaining/reimbursing funds to the
appropriate MDAs based on their collections.
This reimbursement will enable respective
MDA to implement its targets which in turn
will increase future collections.

4.1.5 Overall budget issues
As a part of audit, we made a review of
budget performance in the MDAs and
Embassies. Focus was on revenue budget,
recurrent budget and development. Results
of review were reported in the management

letter of respective MDAs. In summary, the
following issues were observed;
Some of the MDAs were not able to
collect non tax revenue as was budgeted.
This has resulted to under collection of
non tax revenue by Shs.177.36 billion as
reported in para 4.1.3 above. In line with
revenue budgets in certain instances
some of the MDAs set lower revenue
budgets as a result revenue sources are
not fully exploited as targets are attained
easily.
Some of the MDAs spend beyond budgeted
line items and expenditures are charged
to wrong expenditure codes.
The treasury did not release funds i.e.
recurrent and development funds to MDA
as approved by Parliament. Almost in all
MDAs there is under releases of both
recurrent and development funds.
Despite of under releases of funds, in
certain instances funds allocated is not
sufficient even to meet basic operations
expenses. Example in the Embassies,
funds allocated for other charges are not
enough even for paying utility bills.
We have observed that some of
exchequer issues were released towards
the end of the year. In certain instances
the release was made in the last week of
June. In this regard it was not easy for
MDAs to plan for utilization of the
respective funds. And where those funds
have been utilized, financial and

procurement regulations were not
observed.

Due to the challenges shown, there is a
possibility for the MDAs to fail meeting their
targeted objectives if those challenges will
not be addressed. The government has to
strengthen financial management and
budgetary controls to all MDAs, such that
budget could be a tool of controlling
government spending.

4.1.6 Trend of Expenditure in Arrears and
National Budget Compared
In the financial year 2012/2013 total
expenditure in arrears (liabilities) was
Shs.595.57 billion based on the consolidated
financial statements.

The percentage of expenditure in arrears to
the national budget is 3.9 percent, indicating
some improvements when compared to two
prior years when it was 6.7 percent and 9.1
percent in the financial years 2011/2012 and
2010/2011 respectively.

Table 15: Analysis of Expenditure arrears is shown
below:-
FY
Expenditure
Arrears
National Budget
Expenditure
Arrears as % of
National Budget
2012/2013 595,568,566,057 15,191,944,300,000 3.9
2011/2012 899,000,000,000 13,525,895,350,000 6.7
2010/2011 1,058,000,000,000 11,609,557,584,000 9.1


Figure No. 6: Graphical presentation

Figures are in Billion Shillings.
Source: Audited Consolidated Financial Statements 2011/2012
and 2012/2013

The impact of expenditure arrears is that it
wears down the current years budget and
leads to budget cuts which would otherwise
be used to finance other planned activities.

This is due to the fact that part of exchequer
issues disbursed was utilized to settle
expenditure in arrears/liabilities. Clearance
of expenditure in arrears has been one of the
reasons for re-allocations which are a
common feature during budget
implementation.

The Government has to review the cash-
budgeting system to allow for changing of
duration of cash releases depending on the
nature of activities to be financed.

4.2 NATIONAL ACCOUNTS

4.2.1 Introduction
The National Accounts chapter comprises
issues relating to Public Debts, Tanzania
Revenue Authority, Consolidated accounts,
the Treasury and Pre-Audit of Terminal
Benefits.

4.2.2 Public Debt
Public debt refers to the current outstanding
obligations for which the Central Government
and its branches are responsible. Public Debt
is governed by the Government Loans,
Guarantees, and Grants Act No. 30 of 1974
(R.E 2004) whereby Sect. 3 and 6 give the
authority to the Ministry of Finance to
borrow both local and foreign loans on behalf
of the Government.

4.2.2.1 Public Debt Portfolio
Tanzanias total public debt as at 30
th
June,
2013 stood at Shs.21,202.3 billion, an
increase of Shs.4,226.4 billion equivalent to
24.9 percent when compared to Shs.16,976
billion in the financial year 2011/12. The
following sub section analyses the trend and
composition of both domestic and external
debt of the country over the past one year.

(a) Domestic Public Debt Portfolio
The domestic debt portfolio includes
marketable and non-marketable instruments
of varying maturities such as Bonds and
Stock, T-Bills, and un-securitized debt.

Tanzanias domestic debt, at the end of June
2013 reached Shs.5,775.1 billion, compared
to Shs.4,545.9 billion realized in the financial
year 2011/2012. This was an increase of
Shs.1,229.2 billion equivalent to 27 percent
of the debt registered in the previous year.

Such growth in domestic debt was mainly
attributed to conversion of liquidity papers
into financing of Shs.339.5 billion and
conversion of overdraft facility into a special
bond of Shs.469.5 billion. The conversions
together accounted for Shs.809.0 billion
equivalent to 65.82 percent of the total
increase in domestic debt for the year under
review. This analysis is merely meant to show
the impact of ineffective cash and liquidity
management has on the government debt
stock.

(b) External Public Debt Portfolio
The External Public Debt Portfolio includes
loans from Multilateral and Bilateral
Institutions & Developments partners. As at
30
th
June, 2013 the External debt Stock
amounted to Shs.15,427.3 billion compare
with Shs.12,430.1 billion reported in the
financial year 2011/12, representing an
increase of Shs.2,997.2 billion equivalent to
24.1% of the external debt reported the
previous year.

My review noted that the rise of external
debt was largely attributed to the solicited
funds from bilateral creditors and

commercial banks to finance the construction
of the mega gas pipeline track and regional
roads and other infrastructure development
projects such as transportation and water. In
my view, the government needs to exercise
greater care before the country commits
itself to the non-concessional debts as they
are very costly.

A trend of five years total Public Debt
Outstanding is depicted in the histogram
below;

Figure No.7: Total Public Debt Outstanding

Given the importance of the public debt to
the national economy, I have commissioned a
study on public debt. The study is ongoing
and the result of it will be published after its
completion.

4.2.2.2 Existence of Dormant Loan accounts
A review of the debt portfolio noted dormant
accounts for seven (7) lenders amounting to
Shs.1,247.43 billion of which the latest

movement in the portfolio was in 1998. I was
informed by Accountant General's Office that
payments of these loans have ceased pending
negotiation for debt restructuring or
cancelation with respective lenders.

However, I could not obtain sufficient
evidence to substantiate the ongoing
negotiations on cancelation or restructuring
of the debts despite repeated enquiries.

4.2.2.3 Lack of Debt Management Office
The current set-up for the Public Debt
management involves a number of
institutions like the Ministry of Finance
(MoF), the Planning Commission, the
Attorney Generals Chamber, and the Bank of
Tanzania (BoT). This set-up is detrimental to
the management of public debt due to the
fact that each key player has different core
activity apart from public debt. In such a
situation, coordination which is vital in debt
management becomes difficult.

Management Office (DMO) is becoming a
major concern in the overall Public Debt
management in the country. The current
situation is involving too many isolated
players in the country's public debt
management. Hand in hand with this
situation, records in regard to the public
debts are scattered making it difficult to
have an accurate figure constituting the
country's public debt. Thus, the absence of a

unified DMO has derailed a smooth
coordination and operations of public debt
management.

4.2.2.4 Performance Management of the Agency
Agreement with PPF.
The Government entered into agency
agreement with PPF for provision of pension
payment services to Government pensioners
with effect from 1 July 2008. Audit review of
the agreement revealed that it lacks
important clauses like confidentiality clause,
liabilities to the agent in case of non-
compliance and duration of the agreement.

In addition, the agreement does not provide
for exact time interval for remittance of
funds from government to PPF as the
agreement still stipulates the interval
payment for monthly pension as six (6)
months while the practice has been changed
to three (3) months.

A further review of the agreement noted that
clause 4.2.7 requires the government in
collaboration with PPF to ensure that
pensioners sign certificates of existence after
every two (2) years. However, management
has not provided evidence that the exercise
took place.

As a consequence to the observed
deficiencies in contract administration I
noted that the management could not
effectively evaluate the performance of the

key components as stipulated by the Agency
Agreement. Furthermore, the contract
duration is not spelled out which suggest that
the agreement is infinity and could lead to
dire consequences to either party.

4.2.2.5 Effectiveness of the Commonwealth
Secretariat-Debt Recording and
Management System (CS-DRMS)
CS-DRMS is an integrated system that records
various types of debt related data for both
external and domestic debt, grants and
government lending for day-to-day
administration. The database is managed by
the Accountant General (AccGen) who is the
responsible custodian for public debt
records.

I observed that, the current backup and
recovery procedures are not sufficient to
guarantee the recovery of public debt data in
case of disaster. I have also noted that the
CS-DRMS database resides in the same
database server as the EPICOR database. In
addition, the office conducts backups of the
public debt data in removable hard disk
drives which are stored in a storage safe
which again resides just at a building
opposite the AccGens data center. Generally
speaking, at the moment, there is no an
offsite backup-facility for server and public
debt data.

In addition to that, no formal backup
restoration tests are done to ensure that

public debt data could be restored in case of
a disaster. I wish to point out that, without
satisfactory back up and restoration
procedures, the office may not be able to
timely recover its data and systems in case of
disasters.

4.2.2.6 Conversion of the Liquidity Papers into
financing papers
A review of outstanding domestic debt noted
that revenue collection and expenditure
mismatch led the government to convert
liquidity papers (Treasury Bills) with Face
Value of Shs.339,490,810,000 into financing
papers at an interest cost of
Shs.21,543,703,100.

In converting the liquidity papers, domestic
debt stock is increased as well as exposure to
rollover risk. Moreover, liquidity paper
conversion contradicts government monetary
policy of curbing inflation through mop out
of excess cash (monies) from the economy.

4.2.2.7 Long outstanding government net deficit
Sect. 34 (2)(a) of the Bank of Tanzania Act,
2006 stipulates that: Each advance made to
the Government under this section shall be
made solely for the purpose of providing
temporary accommodation to the
Governments and shall, accordingly, be
repayable within one hundred and eighty
days.


During the audit, I noted that the
government accounts held at BoT
experienced net deficit position for the
entire financial years 2011/2012, and
2012/2013 to the tune of Shs.469.48 billion
and Shs.263.87 billion, respectively. The
deficit attracted interest of Shs.42.29 billion
during the year 2011/12 and Shs.53.22 billion
for the year 2012/2013. Continuous
government deficit position is the outcome
of ineffective cash management coupled with
inadequate revenue collection and budgetary
control over expenditure.

As a consequence of the persistent liquidity
pressure, in the financial year 2011/12, the
Government had to restructure overdraft
facility worth Shs.469.48 billion into a
Special Bond at an interest rate of 11.44%
redeemable on October 2022. Such a decision
led to increase of public debt stock as well as
interest charges amounting to Shs.27 billion
which was not budgeted for.

4.2.2.8 Higher Concentration of Commercial
Banks in the Government Stock
Audit analysis on the Government stock by
category noted that Stocks, Special Bonds,
and Marketable Securities were Shs. 5,765.40
billion as of 30
th
June, 2013. Further scrutiny
of the structure revealed that Commercial
Banks are the leading holders in government
stock with 48 percent holding as shown in the
Chart below:


Figure No. 8: Composition of Government Stocks

While I understand the government's key role
in enhancing primary security market
issuance, I still find that the government has
a fundamental role in creating conducive
environment for secondary security markets.
Participation of financial intermediaries in
secondary markets will strengthen
government securities trading and also
encourage buyers of those securities to trade
them in secondary markets with confidence.

The commercial banks occupancy of 48
percent in the government stock is crowding
out the market by incapacitating private
investors who would otherwise prefers to buy
securities at the primary market and trade
them in the secondary markets.

In addition, the secondary market is
increasingly inactive due to the fact that
most of the commercial banks funds are tied

in the primary market. As a result,
commercial banks become reluctant to lend
to private sector partly due to low risk
instruments in the market, high risk and
administrative costs involved in providing
loans to the private sector.

As government securities become less
attractive due to the absence of active
secondary markets, they become cheaper to
the few available investors who are willing to
hold securities to maturity. This practice
further hinders the development of the
secondary domestic market whereby
investors can enter and exit the market at
their convenience. Furthermore, the
cheapness of government securities at
primary market increases cost to the
government in terms of coupon payments as
well as Face Value. Besides, governments
securities are bought at discount and attract
high returns due to their minimal chance of
being called before maturity.

4.2.2.9 Lack of actuarial valuation of benefits
plan for Government retirees
Public servants retirees pensions are paid
from the consolidated fund and such
arrangement ought to be recognized by the
Government as Defined Benefits Plan.
An audit review of retirement benefits noted
that actuarial valuation for defined benefits
was not conducted in order to determine the
probable liabilities due to the government. I
am of the view that the government could

not ascertain such liability arising out of
defined benefit plan. This is contrary to
paragraph 166 of IPSAS 25 that requires an
entity to determine its initial liability for
defined benefit plans as the present value of
the obligations at the date of adoption.

4.2.3 TANZANIA REVENUE AUTHORITY
Tanzania Revenue Authority (TRA) 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 some non-tax revenues. The
Authority prepares two separate sets of
financial statements, one for revenue and
the other for expenditure. TRA financial
statements are prepared by using
International Financial Reporting Standards
while revenue statements are prepared
under the International Public Sector
Accounting Standards- cash basis of
accounting.

4.2.3.1 Outstanding matters as per previous
Management Letters;
As at the date of issuing my report to TRA on
08
th
January, 2014 the Authority had
outstanding matters amounting to Shs.765.76
billion and USD 65,206,109 relating to the
previous years management letters issued to
TRA as compared to Shs.545.27 billion and
USD 210,072,760 outstanding when the
previous year's report of 2011/2012 was
issued as summarized below:


Table 16: Outstanding matters for TRA for
2010/2011 and 2011/2012
F/Year
Department Amount (Shs.)
Amount
(USD)
Amount (Shs.)
Amount
(USD)
Customs &
Excise
37,969,095,172 163,000 25,019,207,641 -
Domestic
Revenue
16,975,679,331 - 16,955,384,161 -
Large
Taxpayers
661,727,408,695 65,043,109 503,166,532,902 105,036,380
Sub total 716,672,183,198 65,043,109 545,141,124,704 105,036,380
TRA HQS 490,892,866,468 - 132,000,104 -
Sub Total 49,089,286,468 - 132,000,104 -
Total 765,761,469,666 65,206,109 545,273,124,808 210,072,760
2011/2012 2010/2011
Revenue
Expenditure

Some of the outstanding matters are dated
as far back as to the financial year
2001/2002 and most of them are waiting
court judgments and approval for write off of
uncollected receivables by the National
Assembly.

4.2.3.2 Revenue Performance (Out-turn)
Actual revenue collection for Tanzania
mainland was Shs.8,117.59 billion against
approved estimates of Shs.8,370.73 billion
resulting in an under-collection of Shs.253.14
billion equivalent to 3 percent of the revenue
estimates.

On the other hand, actual collection for
Zanzibar was Shs.103.87 billion against an

approved budget of Shs.106.73 billion
resulting in an under-collection of Shs.2.86
billion equivalent to 2.7 percent of the
estimated revenue.

Details of revenue collected by TRA's specific
departments against the approved estimates
are as tabulated in tables 17 and 18 below:

Table 17: TRA Revenue Performance Tanzania Mainland
Department
Estimated
Collection (Shs)
Net Actual
Collection (Shs)
Over/Under
Collection
%
Domestic Revenue 1,411,645,400,000 1,520,625,330,860 108,979,930,860 7.7
Large Tax Payers
Department
3,747,622,500,000 3,533,067,632,720 -214,554,867,280 -5.7
Customs & Excise 3,173,605,000,000 3,042,375,952,125 -131,229,047,875 -4.1
Sub total 8,332,872,900,000 8,096,068,915,705 -236,803,984,295 -2.8
Add Treasury Vouchers 37,855,300,000 21,519,179,957 -16,336,120,043 -43.2
Total 8,370,728,200,000 8,117,588,095,662 -253,140,104,338 -3

Table 18: TRA Revenue Performance - Zanzibar
Department
Estimated
Collection (Shs)
Net Actual
Collection (Shs)
Over/Under
Collection
%age
(a) (b) (c) = (b-a)
Domestic
revenue
39,653,400,000 40,043,848,826 390,448,826 0.9
Customs &
Excise
67,077,000,000 63,822,646,706 -3,254,353,294 -4.9
Total 106,730,400,000 103,866,495,532 -2,863,904,468 -2.7

4.2.3.3 Analysis of Revenue Collection pattern
Revenue performance over the past three
years in respect of Tanzania Mainland shows
gradual increase in revenue budget/estimates
coupled with proportionate increase in actual
collections. During the year under review

there was underperformance of 3 percent as
compared to the performance recorded in the
year 2011/2012 of 4 percent above the
estimates.

On the other hand, revenue estimates and
actual collections in Zanzibar continued to
improve. During the year under review, there
was a reduction in the rate of increase of
estimates compared to the last year which in
turn resulted into under-collection of 2.5
percent as compared to under collection of
8.9 percent recorded in the year 2011/2012.

Moreover, the overall revenue collections
movement for Tanzania mainland and
Zanzibar for the past three years is as
depicted in tables 19 & 20 and figure 10 and
11 below:

Table 19: TRA Revenue Collection Pattern - Tanzania Mainland
F/Year Budget Shs.
Actual collection
Shs.
Variance Shs. %age
(a) (b) (c)= (b-a) (c/a)
2010/11 5,849,093,700,000 5,550,203,244,379 -298,890,455,621 -5.1
2011/12 6,456,832,630,000 6,703,229,704,888 246,397,074,888 3.8
2012/13 8,370,728,200,000 8,117,588,095,662 -253,140,104,338 -3

Figure 9: Graphical presentation of three years revenue
collection pattern (Tanzania Mainland)

Zanzibar
Financial year Budget (Shs.)
Actual collection
(Shs.)
Variance (Shs.) %age
(a) (b) (c)= (b-a) (c/a)
2010/11 69,240,800,000 76,357,574,602 7,116,774,602 10.3
2011/12 100,581,100,000 91,652,054,954 -8,929,045,046 -8.9
2012/13 106,730,400,000 103,866,495,532 -2,863,904,468 -2.7

Figure No.10: Graphical presentation of three years TRA
revenue collection pattern (Tanzania
Zanzibar)


69,241
100,581
106,730
76,358
91,652
103,866
7,117
(8,929)
(2,864)
(20,000)
-
20,000
40,000
60,000
80,000
100,000
120,000
2010/11 2011/12 2012/13
C
o
l
l
e
c
t
i
o
n
n
s

i
n

M
i
l
l
i
o
n
Year
Estimated Collections A Actual collection B Over/(under) collection

4.2.3.4 Tax Exemptions Shs.1,515.6 billion
The government of Tanzania through Tanzania
Revenue Authority (TRA) grants tax
exemptions to various beneficiaries for trade
facilitation and humanitarian grounds in
accordance with the applicable Laws and
Regulations. The TRA revenue statements for
the year ended 30
th
June 2013 reported tax
exemptions of Shs.1,515.61 billion being
granted to various categories of institutions
and individuals as summarized below:


Table 21: Summary of tax exemptions issued to institutions
Total (Shs) Total (Shs)
2012/2013 2011/12
1 Mining Sector 351,926,383,883 - 351,926,383,883 140,637,400,000 211,288,983,883 150 23.2
2 Parastatal Organizations 25,290,046,478 - 25,290,046,478 15,699,616,106 9,590,430,372 61 1.7
3 Foreign Embassies/UN 15,144,779,702 - 15,144,779,702 10,194,000,000 4,950,779,702 49 1
4 Exemptions under Duty Free Shops - 9,801,420,712 9,801,420,712 7,726,106,679 2,075,314,033 27 0.6
5 Religious Institutions 513,729,447 - 513,729,447 438,967,358 74,762,089 17 0
6 Tanzania Investment Centre 300,398,017,045 - 300,398,017,045 280,961,890,898 19,436,126,147 7 19
7 Military duty free shops 2,200,383,324 - 2,200,383,324 2,454,600,000 -254,216,676 -10 0.1
8 Exemptions under VAT - 571,733,155,336 571,733,155,336 801,859,518,440 -230,126,363,104 -29 37.7
9 Government Institutions 6,680,711,987 - 6,680,711,987 9,603,414,035 -2,922,702,048 -30 0.4
10 Donor Funded Projects (DFP) 122,461,951,497 - 122,461,951,497 225,039,689,862 -102,577,738,365 -46 8.1
11 Private Companies & Individuals 72,237,968,263 - 72,237,968,263 304,045,656,449 -231,807,688,186 -76 4.8
12 NGOs 1,409,421,040 - 1,409,421,040 7,542,700,000 -6,133,278,960 -81 0.1
13 Oil/Gas Exploration * 35,809,409,085 - 35,809,409,085 Introduced in FY2012/13 35,809,409,085 100 2.4
Total 934,072,801,751 581,534,576,048 1,515,607,377,799 1,806,203,559,827 -290,596,182,028 -16 100
% of
exemption
2012/13
S/N Institution category
Customs &
Excise Dept.
(Shs)
Domestic
Revenue Dept.
(Shs)
increase
(decrease) (Shs)
% of
increase
(decreas


Generally, exemptions in respect of Tanzania
Mainland have shown a decreasing trend in
the year under review compared to the
previous year but still poses a negative
impact on the overall revenue performance.
The trend shows a decrease of exemptions by
Shs.290,596,182,028 or 16 percent from
Shs.1,806,203,559,827 reported during the
financial year 2011/2012 to
Shs.1,515,607,377,799 in the financial year
2012/2013. Had the exempted revenue of
Shs.1,515,607,377,799 been collected, which
is 19 percent of the actual collections, the
total collection would have been
Shs.9,633,195,473,461 instead of
Shs.8,117,588,095,662. The exemptions
reported above account for almost 10
percent of the total 2012/2013 government
revenue estimates of
Shs.15,191,944,300,000.

Table 22: TRA Exemptions against actual collection for
financial year 2011/12-2012/13 (amounts in
Shillings)
Explanation 2012/2013 2011/2012
Revenue Target 8,370,728,200,000 6,456,832,630,000
Actual Collection 8,117,588,095,662 6,703,229,704,887
Exemptions 1,515,607,377,799 1,806,203,559,827
Proportion of exemptions to
actual collection
19% 27%
Surplus/( Deficit) in collection -253,140,104,338 246,397,074,887
Surplus if exemptions had not
been granted
1,262,467,273,461 2,052,600,634,714


4.2.3.5 Comparative analysis of Tax Exemptions
The actual tax collections have increased in
the last five years from net collections of
Shs.4,052 billion in 2008/09 to Shs.8,117.6
billion in 2012/2013 with slight increase in
revenue yield (Net tax collections as a
percentage of GDP).The ratio of tax
exemptions to GDP increased from 2.7
percent in 2008/2009 to 4.3 percent in
2011/2012 before decreasing to 3.1 percent
in the financial year 2012/2013.

Table No.23 below indicates that the level of
exemptions has been on average of 2.6
percent of GDP between 2008/09 and
2010/2011;

Table 23: TRA Revenue Yield for Tanzania with Exemptions
considerations (Million Shs.)
Item 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
Nominal GDP 26,868,213.40 31,316,223.90 35,026,679 41,125,313 48,385,100
TRA Revenue
Collections
4,051,963.80 4,437,933.40 5,315,148 6,703,230 8,117,588
Revenue Yield 15.10% 14.20% 15.20% 16.3 16.8
Total Tax
Exemptions
731,267.70 653,652.50 1,016,320.30 1,806,203.60 1,515,607.40
Exemptions as %
of GDP
2.70% 2.10% 2.90% 4.39% 3.13%
Exemptions as %
of TRA Revenue
Collections
18.00% 14.70% 19% 27% 19%

Source: CAG General Report 2011/12, TRA Financial Statements 2012/13
and TRA 4
th
Corporate Plan 2013/14 to 2017/18


The level of tax exemptions is high i.e. 3.1
percent of GDP taking into account the need
to increase revenue collections.
Furthermore, despite the ongoing efforts put
in place to decrease tax exemptions, there
has been no standard guidelines in terms of
policy as to what level of exemptions should
the country maintain at any given time.

Given the importance and impact of tax
exemptions to the economy my office is
carrying out a special study on this area and
report will be availed upon its completion.

4.2.3.6 Management of Customs and Bonded
Warehouses
According to Part IV of the East African
Community Customs Management Act
(EACCM), 2004 goods imported in the country
may be deposited in the customs or bonded
warehouses pending payment of appropriate
duties by the respective consignees. The Act
also outlines specific requirements for proper
management of both customs and bonded
warehouses including timely clearance of
goods from the warehouses.

I reviewed the operations of the selected
customs and bonded warehouses for the
period under review to evaluate the level of
compliance with the provisions stipulated in
the Act. The audit noted the following
weaknesses which might render negative
impact on revenue collections:

Goods attracting customs duties
amounting to Shs.1,102,640,256 were
found to have been stayed in the
warehouses for more than the required
maximum period of six months without
any action to collect revenues.
TRA suspended and closed thirteen
Bonded Warehouses before collecting
customs duties which amounted to
Shs.1,803,910,991.
Twenty seven Customs Bonded
Warehouses were in operation without
valid licenses from the Commissioner for
Customs and Excise. No action has been
taken against the owners of the customs
bonded warehouses who were operating
without valid licenses.

4.2.4 CONSOLIDATED ACCOUNTS
4.2.4.1 Budget and Expenditure Performance
The consolidated statement for the Supply
Votes Accounts had approved estimate of
Shs.11,026,416,297,537 against the total
exchequer issues of Shs.10,672,471,478,499
as a result there was under release of
Shs.353,944,819,038 equivalent to 3 percent
of the approved estimates. Total
consolidated net expenditure was
Shs.10,640,607,414,988 leaving an unspent
balance of Shs.31,864,063,511.

The consolidated Development Votes
Accounts had approved estimate of
Shs.4,165,528,002,463 against the total
exchequer issues of Shs.3,656,297,898,562

leading to unreleased amount of
Shs.509,230,103,901 equivalent to twelve
(12%) of the approved budget. Consolidated
development vote account closed with
unspent balance of Shs.40,066,146,199 as a
result of actual expenditure of
Shs.3,616,231,752,363 against exchequer
issues released.

My general observation is that under release
of Shs. 863.174 billion equivalents to 6% of
the total budget for the year was significant
and affected the implementation of some of
the planned activities during the year under
review. I also noted late releases of funds to
MDAs as the main factor for huge unspent
balances at the year-end as will be analyzed
in the next sub section of this report.

4.2.4.2 Financing of Development projects
Audit scrutiny on the consolidated financial
statement for the financial year ended 30
th

June 2013 revealed that total amount of
Shs.3,616.2 billion were used to finance
national development activities. Of the spent
amount Shs.2,218,908,035,033 comes from
domestic sources and Shs.1,397,323,717,329
equivalent to 39 percent of total amount
spent comes from external assistance.
Financing analysis of development projects
for three consecutive years is as shown here
under:


Financial
year
2010/11 % 2011/12 % 2012/13 %
Domestic 1,308,351,876,622 59 2,095,412,910,757 62 2,218,908,035,033 61
Foreign 909,680,949,735 41 1,280,883,235,429 38 1,397,323,717,329 39
Total 2,218,032,826,357 100 3,376,296,146,186 100 3,616,231,752,362 100

Basing on the above analysis, a combination
of financing in the financial year 2011/12
was 59 by 41 percent for domestic and
external assistance respectively. In the
financial year 2011/12 and 2012/13 the
financing were 62 by 38 percent and 61 by 39
percent from domestic source and external
assistance respectively.

There is a slight movement of percentage of
financings from domestic sources and
external assistance for three years.
Generally the government funding towards
the development projects has remained at
61.05%, on average, over the past three
years whereas external funding was 38.95%
of the total development budgets.

4.2.4.3 Statement of Revenue Shs.15,018.3
billion
The Consolidated statement of Revenue
reflected a total revenue collection of
Shs.15,018,268,312,814 against an approved
estimates of Shs.15,191,944,300,000
resulting in an under collection of
Shs.173,675,987,186 equivalent to 1 percent
of the revenue budget.

The government is advised to enhance
revenue collection in order to attain the set
objectives.

4.2.4.4 Government Expenditure Shs.14,328.8
billion
The Government expenditure increased to
Shs.14,328,769,377,061 in the year
2012/2013 as compared to
Shs.12,061,571,308,279 reported in the
financial year 2011/2012 hence recorded in
increase of Shs.2,267,198,068,782 equivalent
to 15 percent of the total expenditure.

Recurrent expenditures during the financial
year 2012/2013 was Shs.10,672,471,478,499
compared to Shs.8,685,275,162,094 reported
in the financial year period 2011/12
equivalent to 23% increase. Development
expenditures was Shs.3,656,297,898,562
compared to Shs.3,376,296,146,186,
recorded in year 2011/2012 equivalent to 7%
as summarized in table 24 below:

Table 24: Recurrent expenditure trend
Expenditure
Account
2011/12
(Shs)
2012/13
(Shs)
Variance
(Shs)
%
Chan
ge
Recurrent 8,685,275,162,094 10,672,471,478,499 1,987,196,316,406 23
Development 3,376,296,146,186 3,656,297,898,562 280,001,752,376 8
Total 12,061,571,308,280 14,328,769,377,061 2,267,198,068,782 19

4.2.4.5 Release of funds towards the end of the
financial year
Audit examination and analysis of the
Government exchequer issues revealed that
Exchequer Issues amounting to

Shs.1,066,315,820,918 equivalent to 7.4
percent of the total exchequers were
disbursed in the last week of the financial
period. Moreover, exchequer released during
the fourth quarter amounted to
Shs.4,494,546,936,669 equivalent to 31.4% of
the total exchequer issues of
Shs.14,328,769,376,759. Table 25 below
shows the exchequer issues released in each
quarter for the year under review.

Table 25: Exchequer issues released in each
quarter
Quarter Exchequer Issue, Shs. % Release
1
st
3,953,903,730,993.16 27.6
2
nd
2,710,184,285,943.08 18.9
3
rd
3,170,134,423,153.47 22.1
4
th
4,494,546,936,669.63 31.4
Total 14,328,769,376,759 100

4.2.4.6 Statement of Losses Shs.13.2 billion
The Government recorded accumulated
losses in terms of public monies, stores and
assets amounting to Shs.13,231,354,196 for
the financial year 2012/2013 as compared to
Shs.13,024,783,230 recorded during the
financial year 2011/2012. This being an
increase of Shs.206,570,924 equivalent 2
percent of the figure reported in the
previous year. This trend implies that the
Government has not taken strong effort to
minimize losses occurrences, and also have
delayed to initiate the process of writing off

genuine losses by the Parliament. Lack of
adequate control over Governments assets
may result into additional future losses.

4.2.4.7 Local Government Institutions not
consolidated in the financial statements
On reviewing the financial statements of the
government, I noted that, the consolidated
financial statements of the United Republic
of Tanzania did not include the revenue,
expenditure, assets and liabilities of the
Local Government Authorities (LGAs) and
Parastatal Institutions which are using the
same accounting framework of IPSAS accrual
basis of accounting. This is contrary to IPSAS
6 which requires a controlling entity to issue
consolidated financial statements which
consolidates all government controlled
entities, foreign and domestic.

4.2.4.8 Government preparedness for IPSAS
accrual basis
The Government of the URT financial
statement has adopted the use of the
International Public Sector Accounting
Standards accrual basis of accounting with
effect from 1
st
July, 2012. I understand the
efforts and progress made by the
Government whereby IPSAS pre-
implementation plan/roadmap was prepared
and specific IPSAS team comprising of
finance and non-finance staff from various
MDAs was established. I also recognize the
efforts of the government for conducting
intensive training whereby team members

were trained on the understanding of the
concepts of IPSAS accrual basis. With regards
to IPSAS accrual implementation progress, I
have noted challenges such as lack of
adequate coordination, high risk on property
plant and equipment activities backlog as
provided here in below:-

(a) Activities Backlog in the implementation
of IPSAS Accrual
Audit review of the roadmap for IPSAS
implementation noted several activities
which were planned to be accomplished
by 30
th
June, 2013 to be behind schedule.
Activities such as separation of grants and
borrowing, preparation of the accounting
manual and the chart of accounts were
not completed as planned hence
hindering the smooth progress of
implementation of IPSAS accrual basis of
accounting adoption.
(b) Lack of National Committee responsible
for IPSAS implementation
The Government is yet to establish a
proper National Committee responsible to
oversee the progress for implementation
of the IPSAS adoption project. I have
observed that, the responsibility for
coordination of IPSAS adoption has been
solely left to the Accountant General. I
understand that, the IPSAS project
involves various players responsible for
valuation, ownership, recognition and
measurement of Government assets.
There is a need for the Government to

establish National Committee to
coordinate and oversee the whole
project. I would therefore, like to
strongly urge the government through
either the Chief Secretary or Paymaster
General to establish a broad and
comprehensive national IPSAS
implementation committee to be charged
with a responsibility of overseeing the
successful adoption of the IPSAS accrual
basis of accounting, come the financial
year 2016/2017.

(c) Property, Plant and Equipment (PPE),
The Government adopted five years
transition provision for PPE, and I have
noted that the Directorate of Government
Assets Management (DGAM) have action
plan that indicates activities for valuation
of government assets for five years (from
2012/13 to 2016/17). However, the
following challenges remained invisible
and need to be addressed by the
government:
Despite the valuation of government
assets being done in 2005/06 under
the supervision of DGAM, there is no
updated PPE report disclosing assets
details such as bar code,
report; schedule of disposed assets.
There is no action plan for valuation of
assets for Local Government
Authorities and the process of
capturing assets in the LGA Asset
Module is yet to be defined.

The 5 year Action Plan did not take
into consideration trainings of staff
using Epicor 9.05 on how to use
Epicor-asset management module for
proper monitoring and understanding
of the valuation process.
Neither action plan nor asset guideline
and financial statements disclose any
information about valuation of
properties especially land and
buildings.

(d) Land and Building not separated as per
requirement of IPSAS 17
Paragraph 74 of IPSAS 17 states that Land
and buildings are separable assets and
are accounted for separately, even when
they are acquired together. My review of
the consolidated financial statements noted
that land and buildings have not been
separated as required by the standard.

(e) Configuration of Epicor and budget
systems have not being properly done to
process transactions and generate IPSAS
accrual basis of accounting financial
statements.

(f) The government budget system,
procedures, guidelines and policies are
still on IPSAS cash basis while the Central
Government's financial reporting has
shifted to IPSAS accrual basis with effect
from 01
st
July, 2012. This situation leads
to difficulties in implementation to users.

(g) The training for Epicor, budget system
and IPSAS accrual basis of accounting was
not adequately conducted to users in
MDAs, taking into consideration the
change of Epicor from version 7 to 9.05
and change from IPSAS cash to IPSAS
accrual.

4.2.4.9 Inadequate Cash Management
Statement of Vote Account for the year
ended 30
th
June, 2013 on the Consolidated
Financial Statements shows that the
Paymaster General account closed with fund
balance in hand of Shs.18,152,597,859.
However, during the same period the
Government bank accounts held at BoT
reported a net deficit position of
Shs.263,866,358,436 which attracted
interests of Shs.53,223,549,921.

I am of the view that, Shs.18.2 bil. held by
PMG at the year-end could have reduced the
deficit position by 9.3% (from 263 billion to
244.9 billion) and hence lower the total
Government Debt Position. This is due to the
absence of sound Cash Management coupled
by the abandoned National Steering Cash
Management Committee, lack of coordination
between cash management unit and budget
department.


4.2.4.10 Monitoring and evaluation of projects
funded by debt proceeds
In the course of reviewing the National Debt
Strategy of 2002, I noted the governments
effort at improving fiscal sustainability. One
of the ways to attain this, as mentioned in
the strategy itself is by improving the
utilization of project financing resources
which could lead to sustained economic
growth.

Furthermore, Reg. 23 of the Government
Loans, Guarantees and Grants Act No. 30 of
1974 requires project coordinators of
respective projects implementing agency for
the purpose of monitoring disbursements and
utilization of loans and grants to submit
monthly reports to the Ministry of Finance.
Through interviews with the responsible staff
at the Ministry of Finance, it was revealed
that this has not been the practice so far.
However, up to now, there is no department
that is solely responsible for projects
evaluation after being financed through loan
proceeds. This could result into sub optimal
which could in turn have a significant impact
on the payback potential of the economy.


4.3 EXPENDITURE MANAGEMENT

4.3.1 Introduction
In this section, I present in details the main
findings in expenditure management
identified during my audit of MDAs and RSs
offices in the financial year 2012/13:

4.3.2 Long outstanding Imprests Shs.319,423,337
As at 30
th
June 2013 six (6) MDAs and two (3)
Regional Secretariats had imprests amounting
to Shs.319,423,337 contrary to Reg. 103(1) of
Public Finance Regulation of 2001. Non
retirement of imprests may infer misuse of
funds and non accomplishment of the
intended purpose. Imprest must be retired
within two weeks after finalization of the
activity; failure to do so will necessitate the
outstanding amount to be deducted from the
officers salary at an enhanced rate.
Summarized results of long outstanding
imprests for the past three (3) years are
given in table 26 and 27 below:

Table 26: Long outstanding imprests
S/N Vote No. Description Amount (Shs.)
1 27 Registrar of political parties 11,905,250
2 32
Presidents office public
service management
84,003,578
3 98 Ministry of Works-TBA 31,410,000
4 82 RS-Ruvuma 4,244,200
5 79 RS-Morogoro 1,194,000
6 56
Prime Ministers Office
Regional Administration and
Local Government
21,417,669
7 46
Ministry of Education and
Vocational training
145,158,500
8 42 National Assembly 9,240,000
9 36 RS- Katavi 10,850,140
319,423,337 Total

Table 27: Summarized results of long outstanding imprests:

12
Vote 27, 34, 42, 18, 74, 27, 34 & 42
13
Vote 40, 91, 74 & 34
14
Refer table 27
Year Amount
(Shs.)
MDA/RS
involve
d
2010/2011 436,398,42
4
8
12

2011/2012 806,437,46
4
4
13

2012/2013 154,174,69
7
9
14


The trend compared to the last year, shows a
decline in value of the long outstanding
imprest by 81% from Shs. 806,437,464 to Shs.
154,174,697. I call for compliance with Reg.
103(1) of PFA, 2001 by ensuring that
retirement of safari imprests is done within
fourteen days, and for special imprest, upon
completion of the relevant activity for which
the imprests were so issued is still
emphasized. In addition, for cases of non
compliance, the responsible Accounting
Officers should recover the outstanding
amounts from imprest holders salaries.

4.3.3 Payments charged to wrong expenditure
codes - Shs. 2,394,834,855
During the year under audit, the MDAs and RS
did not adhere to MTEF Budget provisions and
as such, contrary to Reg. 51(1-8) of the
Public Finance Regulations 2001, payments
totaling Shs.2,394,834,855 as shown in
annexure 'H' were charged to wrong
expenditure items without proper authority
for reallocation. This signifies diversion of
funds to other expenditure items that may
affect implementation of planned and
approved activities. Summarized results of
payments charged to wrong expenditure
codes for the past three (3) years are given
in the next table below:

Table 28: Summarized payments charged to wrong
expenditure codes:
Year Amount (Shs.) MDA/RS

*See detailed analysis in annexure 'E'

There has been an overall decreasing trend
over deviation of funds for the past three
years, however I do emphasize adherence to
MTEF budget and acquisition of retrospective
approval from the Ministry of Finance in line
with Reg. 51(1-8) of the Public Finance
Regulations of 2001 whenever such deviation
is inevitable.

4.3.4 Overpayment- Shs. 68,089,906
During my audit I noted some weaknesses in
internal controls of RS-Katavi, PMO-RALG,
RS-Geita, Drug Control, and Judiciary of
Tanzania which resulted to overpayment of
about Shs. 68,089,906 as summarized in table
44 below:

Table 29: Overpayment
S/N Vote No. Description Amount (Shs.)
1 40 Judiciary Of Tanzania 3,949,176
2 36 Katavi Regional Secretariat 22,614,478
3 56
Prime Ministers Office Regional
Administration and Local
Government
22,784,500
4 63 Geita Regional Secretariat 1,215,500
5 91 Drug Control Commission 17,526,252
68,089,906 Total

15
Vote no. 39, 44, 46, 52, 56, 61, 75, 86 & 94
16
Vote no. 38, 42, 82, 59, 92, 33, 12, 91, 52, 27, 69, 29, & 85
involved
2009/2010 5,296,243,598 9
15

2010/2011 340,756,701 13
16

2011/2012 6,027,429,643
2012/2013 2,394,834,855 25*

Summarized results of payments overcharged for
the past three (3) years are given in the table below
for comparison purposes:

Table 30: Summarized payments overcharged:
involved
2010/2011 126,495,025 7
17

2011/2012 90,392,726 2
18

2012/2013 68,089,906 5*
Although the trend seems to decline from the
past years, Management is advised to ensure
that the overpaid amount is recovered from
whoever caused the loss and the internal
control system should be strengthened in
respect of the risk caused such payments to
be made.

4.3.5 Expenditure made out of the approved
budget-Shs. 15,785,285,943
I noted during the course of the audit that
Embassies, MDAs and RS offices paid
Shs.15,785,285,943 for various activities.
However this expenditure of
Shs.15,270,835,209 was incurred out of the
approved budgets without seeking relevant
authorization which is contrary to Regulation
46 (3) of the Public Finance Regulation as
detailed in annexure 'F'. Summarized results
of such payments made out of approved

17
Vote no. 34, 39, 18, 44, 42, 52, & 18
18
Vote 46 & 56

budget compared to the past year are given
in table 46 below for comparison purposes:

Table 31: Summarized payments made out of
approved budget:
Year Amount
(Shs)
MDA/RS
involved
2011/2012 2,292,796,070 10
19

2012/2013 15,785,285,943 29*
See detailed analysis in annexure 'F'

The analysis from the table above depicts
that, the Number of MDAs, RSs and Embassies
which incurred such expenditure increased
from 10 in 2011/12 to 29 in the year
2012/13. This shows that theres weaknesses
and laxity in implementing budget
commitment controls. I strongly recommend
that the managements of Ministries,
Embassies and RS offices should strive to
formulate the realistic budgets and should
strictly be properly managed, implemented
and followed accordingly.

4.3.6 Inadequately supported payments-
Shs.14,498,110,341
During the year of audit I noted payments
amounting to Shs.14,498,110,341 which were
made without being supported by proper
documents contrary to Reg. 95(4) of the
Public Finance Regulations of 2001. As such,
the authenticity of the payments made could

19
Sub Vote (SV) 2003, SV 2020, SV 2006, SV 2016, SV 2017, SV
2014, SV 2005, SV 2010, SV 2032, SV 2007

not be ascertained therefore, limiting the
scope of audit. Summarized results of
payments inadequately supported for the
past three (3) years are given in table 32
below for comparison purposes:

Table 32: Summarized payments inadequate
supported:
* See annexure 'G' for further details.

F
r
o
m
the table above, compared to last year,
2011/12 the amount of unsupported
payments has increased from Shs.2.1bn to
Shs.14.4bn, while entities involved have
increased from 8 to 29 respectively, this
indicates that controls to ensure proper
accounting records are demanded before
payments are made are weak, therefore
Accounting Officers of responsible MDAs
should strength pre-audit units and other
relevant controls to ensure that all payments
are authenticated by proper supporting
documents before such payments are
effected.

4.3.7 Missing acknowledgement receipts and EFD
receipts Shs.47,935,509,285

20
Vote no. 18, 19, 21, 22, 29, 32, 40, 42, 46, 50, 52, 69, 82,
85, 92, 94, & 95
21
Vote no. 18, 19, 42, 58, 60, 39, 92, 93, 61, 52, 32, 24, 43,
94, 29, 46, 70, 72, 78, 79, 84, 88, & 95
22
Vote no. 57, 85, 37, 38, 39, 51, 52, & 81
involved
2009/2010 362,026,933,382 18
20

2010/2011 8,076,574,791 23
21

2011/2012 2,122,925,171 8
22

2012/2013 14,498,110,341 29*

Government has been losing a lot of money
by not collecting tax from suppliers due to
tax avoidance done by business men. I
acknowledge the efforts of the Government
of introducing EFD machines. These machines
records all transactions made for tax
purposes. There is a saying which says that
"if you purchase demand receipts, if you sale
give receipts". This has not been observed by
Government entities themselves by not
demanding EFD receipts from purchases
made from various suppliers. By not
demanding EFD receipts it means these
suppliers would be collecting taxes including
VAT and not remitting to TRA. This might
expose Government in a risk of losing money
from tax collected. Government entities
have to demand EFD receipts from any
purchase that they make with the suppliers.
This would help to increase revenue
collections. See table 33 below for all
payments that were made without getting
EFD/ERV receipts.


Table 33: Missing acknowledgement receipts/ EFR receipts
S/N Vote No. Description
Doc.
missing
Amount (Shs.)
1 38 Tanzania Peoples Defence Forces (Ngome) EFR 45,248,767,272
2 93 The Immigration Service Department ERV 6,990,000
3 89 RUKWA Regional Secretariat ERV 4,345,000
4 83 Shinyanga Regional Secretariat ERV 32,100,000
5 58 Ministry of Energy and Minerals EFR 306,000,000
6 71 Coast Regional Secretariat ERV 7,155,419
7 43
Ministry of Agriculture Food Security and
Cooperatives
EFD 127,297,755
8 69 Ministry of Natural Resources and Tourism ERV 429,382,980
9 2031 Embassy of Tanzania-Brasilia ERV 2,744,371
10 46
Ministry of Education and Vocational
Training
ERV 1,029,990,000
11 51 Ministry of Home Affairs EFD 268,658,738
12 29 Prisons Service Department ERV 308,058,820
13 56
EFR 164,018,930
47,935,509,285 Total

I have been recommending to the
Government to increase its revenue by
exploring new sources of revenue and to
insist on tax compliance. I advise
Government to put more effort to provide
education on the voluntary compliance with
the Income Tax (Electronic Fiscal Devices)
Regulations, 2012 and use of EFD machines
which would directly increase revenue if
every purchase will be accompanied with an
EFD receipts.

Also Management of the MDAs and RS
involved should strengthen Internal Controls
over payments which requires bonafide

payee to issue ERV by making a follow up
immediately after effecting payments to
confirm the receipt.

4.3.8 Payments without statement of
expenditure -Shs. 3,288,257,291
During the financial year 2011/2012 four (4)
MDAs and two (2) RSs incurred payments
amounting to Shs. 3,288,257,291 for various
activities; however, the payments lacked
relevant and sufficient information to
establish their validity to be treated as
proper charge against public funds. A
detailed analysis of these payments is given
in table 34 below:

Table 34: Payments without statement of expenditure
S/N Vote no. Description Amount (Shs.)
1 85 Tabora Regional Secretariat 14,079,710
2 39 National Service 1,419,608,750
3 38
Tanzania Peoples Defence Forces
(Ngome)
1,082,728,526
4 50 Ministry of Finance 259,266,000
5 87 Kagera Regional Secretariat 12,460,000
6 52 Ministry of Health and Social Welfare 500,114,305
3,288,257,291 Total

Accounting Officers should discharge their
stewardship role by ensuring that they fully
embrace the best financial discipline in
managing the limited resources placed under
their jurisdiction. Accordingly, appropriate
action should be taken by the Accounting
Officers to justify the expenditure and value
realized from such payments.

4.3.9 Nugatory expenditure - Shs. 620,002,236
Fruitless and wasteful expenditure is
expenditure that was made in vain and that
could have been avoided had reasonable care
been taken. In this case eight (9) MDAs/RS
incurred fruitless expenditure amounting to
Shs. 620,002,236 as summarized in annexure
'H'.

It is recommended to the MDAs'
managements to strengthen their systems of
internal controls, as many weaknesses
pointed out above originates from the
existence of inadequate Internal Controls
within the MDAs.

4.3.10 Funds used for unintended activities -
Shs.1,770,390,504
Examination of payment vouchers and
related records revealed that payments
totaling Shs.1,770,390,504 were charged to
fund unintended activities contrary to Reg.
No. 115 of the Public Finance Regulations,
2001 requires voted funds to be applied only
for the purpose for which they were
intended, otherwise may lead to
misappropriation of such funds and the
purpose for which the funds were purported
to have been used for might not be
implemented. Summarized results of
payments made for unintended purposes is
given in annexure 'I'.


To ensure that all funds as approved by
Parliament were received and used
exclusively and judiciously for eligible
expenses as per approved budget and with
the provisions of existing laws, regulations
and prescribed procedure, I advise the
managements of the audited entities (MDAs)
to strengthen budgetary controls from its
preparation to its execution, any deviations
should be identified, documented and dealt
with accordingly. However, in order for the
intended activities to be achieved, I do
recommend that all monies used for
unintended activities be refunded back and
used for the purpose they were intended for
in the first place.

4.3.11 Missing payment vouchers
Shs.70,195,394
Payment vouchers with their supporting
documents amounting to Shs.70,195,394
were not produced for audit scrutiny
contrary to Reg. No.86 (1) of the Public
Finance Regulations, 2001, which requires
expenditure of public money to be properly
vouched. In the absence of the payment
vouchers and their supporting
documentation, the legitimacy, nature, type
and purpose of the expenditure of
Shs.70,195,394 could not therefore be
ascertained as indicated in table 35 below.
Table 35: Missing vouchers
S/N Vote
no.
Description Amount
(Shs)
1 10 Joint Finance
Commission
6,501,200

T
a

Summarized results of payments
inadequately supported for the past three (3)
years are given in table 51 below for
comparison purposes:

Table 35: Summarized payments whose vouchers
were missing:
Year Amount (Shs) MDA/RS
involved
2010/11 250,796,986 3
23

2011/12 922,974,797 2
24

2012/13 70,195,394 3
25

From the table above, the trend shows that
the problem of missing vouchers has been
recurring year after year despite the
reduction in the amounts involved in 2012/13
(Shs.70,195,394) compared to last financial
year 2011/12 (Shs.922,974,797), while the
number of entities involved has increased to
3 this year from 2 last year. However,
persistence of this weakness gives a picture
of ineffective control system, therefore I
would like to remind the MDAs' management
that it is their primary responsibility to
establish sound internal controls to ensure all
accountable documents including vouchers

23
Vote no. 42, 52, & 54
24
Vote 81 & 34
25
Refer table 35
2 81 RS-Mwanza 17,431,634
3 29 Prisons Service
Department
46,262,560
Total 70,195,394

are properly safeguarded in order to avoid
the government incurring these cash losses as
regarded by Reg. 18 (f) PFR, 2001.

4.3.12 Payments of previous years liabilities
using the funds appropriated for
2012/2013 Shs.371,879,693
During the year under audit, I noted
payments amounting to Shs.371,879,693 in
respect of five (5) MDAs and four (4) RS
which were required to be properly
chargeable in the financial year 2011/2012,
but were charged in the financial year
2012/2013. In addition, there is no evidence
that, the payments formed part of creditors
for the financial year 2011/2012. This is
contrary to regulation no. 85 of Public
Finance Regulations (2001). Details are
summarized in the table 37 below:

Table 36: Deferred payments
Vote No. Description Amount (Shs)
32
Presidents office public service
management
84,417,208
82 RS-Ruvuma 3,950,270
70 RS-Arusha 34,557,000
85 RS-Tabora 15,151,180
56
Administration and Local
Government
13,960,208
91 Drug Control Commission Vote 3,752,000
53
Ministry of health and social
welfare
184,522,474
81 RS-Mwanza 17,543,300
34
Foreign Affairs and International
Cooperation
14,026,053
371,879,693 Total

I understand that, currently central
government has adopted IPSAS Accrual as a
bases for preparation of its financial
statement, however, the budget is still
prepared under cash basis, therefore care
should be taken to insure that deferred
payments are being carefully recorded and
incorporated in the current financial years
Budget to avoid the use of current years
fund to pay previous years activities and
cause the intended activities not to be
achieved.

Generally, The main cause of these
weaknesses identified in this chapter, were
mainly absence of documented risk analysis,

sound internal controls to mitigate identified
risks, also negligence in monitoring the
existing controls and noncompliance with the
existing legislations/regulations without any
actions taken (carrot and stick approach) has
contributed as well the persistence of these
weaknesses.

More effort should be put forth to conduct
risk analysis on entity level, establishment of
risk management policy and risk register.
Only effective controls will ensure all
expenses incurred are correctly paid,
recorded and reflect reality.


CHAPTER FIVE

EVALUATION OF INTERNAL CONTROL SYSTEM AND
GOVERNANCE ISSUES

5.0 Introduction
Internal control is an integral process that is
designed and effected by an entitys
management and personnel to address risks
and provide reasonable assurance regarding
the achievement of its objectives in the
effectiveness and efficiency of operations,
reliability of financial reporting and
compliance with applicable laws and
regulations. For the purpose of this report,
Internal controls refers to how MDAs and RS
can reasonably assure themselves that their
financial reporting is reliable, their
operations are orderly executed, they are
ethical, economical, effective and efficient
and that they comply with laws, regulations
and applicable standards and procedures.

This part highlights audit findings relating to
various elements of MDAs and RS's internal
controls including; establishment of effective
internal audit units and audit committees,
risk management processes, information and
communication technology, accounting
systems and fraud prevention and controls.


5.1 Inadequate Performance of Internal Audit
Units
Reg. 28 (1) of the Public Finance Regulations,
2001 requires the Accounting Officers of each
MDA/RS to establish and maintain an
effective Internal Audit Unit throughout the
MDA and any other reporting unit including
Regional Secretariats. An effective Internal
Audit Unit is required to appraise on the
soundness and application of accounting,
financial and operational controls within the
MDAs and RS by performing systematic
review, reporting of the adequacy and
effectiveness of the managerial, financial,
operational systems and budgetary controls.
Contrary to the above requirements, the
following weaknesses were noted from the
assessment of the performance of the
Internal Audit Units in 22 MDAs and RS as
detailed in annexure 'J'

i. The Unit continues to be understaffed,
with some having only one or two staff.
Taking into account the scope of the
MDAs/RSs activities, one or two auditors
are not adequate for effective audit
coverage.
ii. The audit scope of internal audit
functions during the year was limited due
to inadequate resources. As such financial
and operational controls were not
properly evaluated; therefore I could not
rely on the works of the Internal Audit
Units in order to reduce the extent of my
audit tests.

iii. The position of internal audit in the
governance framework as well as roles
and responsibilities were not clearly
articulated in the Internal Audit Charters.

I emphasize my recommendation that, MDAs
management in collaboration with the Internal
Auditor Generals Department under the Ministry
of Finance strengthen the internal audit
function through increased financial and
qualified human resources provisions.

5.2 Inadequate Performance of Audit
Committees
A significant recent corporate governance
development in the public sector has been
the introduction of audit committees. Audit
committees contribute to a strengthened
oversight of the financial and ethical
integrity of publicly held entities and are
essential to effective governance. The
primary role of the audit committee is to
oversee the development and
implementation of policies, system of
internal control, financial reporting and risk
control framework. Reg.30 of the Public
Finance Regulations, 2001 requires each MDA
including RS to have an audit committee.

During review of the performance of Audit
Committees, it was noted that, 28 MDAs/RS
as per annexure 'J' were ineffective due to
the following weaknesses:

i. Weak performance of Audit Committees
which failed to oversee the role of
Internal Audit Unit;
ii. In some instances, the composition of
Audit Committee was not adequate as per
the requirement of Reg.31(1) of Public
Finance Regulations, 2001 which requires
an Audit Committee to be composed of
senior members, nominated by the
respective Accounting Officer and at
least one member appointed by the
Permanent Secretary from external
sources.
iii. The Committees had not reviewed the
financial statements and internal and
external audit reports of the MDAs/RS;
iv. In some cases there was no proof that,
the annual committee reports had been
prepared and submitted to the Accounting
Officers for taking appropriate action on
the Committees recommendations;

The inadequate performance of Audit
Committees leads to inefficiencies in the
overall control environment and good
governance within MDAs/RS. It is important
that the audit committee of all MDAs and RS
to have a documented and approved Terms
of Reference making provision for the
membership of the committee, attendance
and frequency of meetings, roles and
responsibilities and reporting procedures.


5.3 Inadequate Risk Management process
Risk management is an inherent part of an
entitys controls framework to manage
business risks, as it involves understanding
the organizational objectives, identifying,
analyzing and assessing risks associated with
achieving such objectives and consistently
developing and implementing
programmes/procedures to address
identified risks.

The review of MDAs/RS noted that, 11 MDAs
and 14 RS as shown in annexure 'J'; had no
documented Risk Management Policy and had
not recently undertaken formal risk
assessment to identify existing risks and
those emerging as a result of the changing
environment and methods of services
delivery.

MDAs/RS should develop and implement the
documented risk management processes and
ensure that risk profiles and related controls
are regularly being revisited in order to have
assurance that the risk profile continues to
be valid, that responses to risk remain
appropriately targeted and proportionate,
and mitigating controls remain effective as
risks change over time.

5.4 Weaknesses in Information Technology -
General Controls
Most government entities use computerized
systems to process transactions, financial or
non-financial alike. This poses a challenge for

auditors as the influence financial systems
have on the financial statements need to be
evaluated and understood. As part of
understanding of the operations of the
auditee, there is also a need to evaluate its
IT environment.

During the assessment of IT control
environment, the following shortcomings
were observed in 10 MDAs and 13 RS as
shown in Annexure 'J';
i. Most of the MDAs/RS had no IT policy
which may lead to improper management
and handling of IT equipment including
computer software and hardware.
ii. There were no access controls to
computer resources (data, programs,
equipment, and facilities), for protecting
the MDAs/RS resources against
unauthorized modification, loss, and
disclosure. Servers were found to be
located in the rooms where other normal
operations are carried out contrary to IT
best practices which require servers to be
kept in isolated, secured, clean and free
from dust rooms.
iii. There was no IT disaster recovery plan in
place. In the absence of disaster recovery
plan it will be difficult to restore the
system in a timely manner and there will
be no tested sources of data for
restoration and no specific persons
responsible for the restoration. This poses
a risk to business continuity of the
MDAs/RS.

5.5 Inadequate Fraud Prevention and Control
According to ISSAI 1240, fraud is an
intentional act by one or more individuals
among management, those charged with
governance, employees, or third parties,
involving the use of deception to obtain an
unjust or illegal advantage. The primary
responsibility for the prevention and
detection of fraud rests with those charged
with governance and employees of the
MDAs/RS.

However, as the Controller and Auditor
General, I planned my audit in such a way
that I could have reasonable expectation of
detecting material errors and misstatements
in the financial statements resulting from
irregularities including fraud.
Our 2012/2013 audit noted that Regional
Secretariats of Dodoma, Mbeya, Morogoro,
Tanga and Manyara had no documented and
approved fraud prevention plans. There were
no processes put in place by the Secretariats
management for identifying and responding
to the risk of fraud in their working areas.
The following indicators/red flags which are
viewed as symptoms of fraud were noted:
Payments made without supporting
documents,
Misstatement of financial statements,
Inadequate management, recording and
valuation of non-current assets,
Improper segregation of incompatible
duties.

The responsibility for detection, prevention
of irregularities and the maintenance of an
effective and adequate system of internal
control rests with the management; the
above noted loopholes should be rectified by
devising mitigating factors besides
formulation of fraud policy. The policy
should have a documented and approved
Fraud Prevention Plans and regular risk
assessment processes.

5.6 Inadequate utilization of IFMS/Epicor
System
All Government transactions are expected to
be processed on the Integrated Financial
Management System (IFMS). The new release
of Epicor 9.05 has got various modules
including account payables, account
receivables, Cash management, General
ledger and Purchasing.

However, our review of IFMS noted that,
Epicor accounting package was not fully
utilized by some of the MDAs and RS since,
cheques were not printed by the Epicor
system nor the generation of bank
reconciliation statements. Weaknesses were
mostly noted in 8 MDAs/RS as shown in
annexure 'J'. This was caused by the
following weaknesses:

No customization of some modules so as
to be compatible with the operating
environment of the MDAs and RS,

Inadequate training to the staff on the
new released version, Epicor 9.05

It is recommended that, Management of
MDAs/RS in collaboration with Treasury
ensures that all modules of IFMS are properly
customized and the accounting system is fully
utilized. Training should also be conducted
whenever the need arises such as the release of
new version and newly recruited staff.

5.6.1 Use of Manual Accounting Systems
During the year under review it was noted
that, out of 32 Embassies, High Commissions,
and Tanzania Permanent Missions to the
United Nations (Foreign Missions), only one
Mission in Pretoria is using the Epicor
accounting package.

In addition it was found that installation of
the system in six Missions namely; Paris,
Washington DC, New York, London, Ottawa
and Brussels was not successful. The Missions
therefore are operating on manual
accounting system.

I am of the view that, the use of manual
accounting system exposes the Missions
account records into risk of errors and
manipulation without a proper audit trail and
hence reducing the level of integrity of the
reports being generated. The use of manual
system also impairs accuracy, speed and
brings about ambiguity in reporting at all
levels.

It is of paramount importance to ensure that
the Epicor accounting package is installed in
all Foreign Missions and that, accounting
staff in the Missions are adequately trained
on the use of all the modules in the Epicor
accounting package to bring about
consistence in the financial reporting regime
in the government.

In addition, the Ministry of Foreign Affairs
and International Cooperation together with
the Ministry of Finance should ensure that,
the use of this system is mandatory to
Foreign Missions, and that there is a proper
supervision for its implementation.


CHAPTER SIX

HUMAN RESOURCES AND PAYROLL MANAGEMENT

6.0 INTRODUCTION

Human resource management
In essence, human resource audit involves
identifying issues affecting an entity's manpower
and finding solutions to the observed challenges
before they become unmanageable. It is an
opportunity to assess what an organization is
doing right, as well as how things might be
done differently, more efficiently or at a reduced
cost.

A human resource audit involves devoting time and
resources to taking an intensely objective look
at the entitys human resource policies, practices,
procedures and strategies to protect the
organization, establish best practices and
identify opportunities for improvement. An
objective review of the organization can help to
evaluate whether specific practice areas are
adequate, legal and/or effective. The results can
provide decision-makers with the information
necessary to decide what areas need improvement.

A human resource compliance audit generally
consists of the following:
(i) An evaluation of the entitys operational HR
policies, practices and processes, with a
focus on key HR department delivery areas
(e.g., recruitinginternal and external

employee, compensation, performance
management, etc.).

(ii) A review of current HR indicators (e.g.,
number of unfilled positions, the time it
takes to fill a new position, turnover, number
of legal complaints, absenteeism rates, etc.).

Payroll management
In a payroll audit, the auditor inspects all the
documentation related to the payroll,
verifying that it is correct and looking for
signs of issues such as gaps between payroll
and personnel records, employees with
incomplete payroll records, deductions which
do not match to contributions, and so on.
Internal controls over payroll should be
sufficient to ensure accuracy of data,
detection and prevention of fraud.

6.1 Key issues raised from audit of MDAs and RS
The following are the summarized issues
raised from the audit of MDAs and RS. The
details of these observations are in the
individual management letters issued
separately to the Accounting Officers of
MDAs and RS:

6.1.1 Unclaimed salaries not remitted to
Treasury Shs.269,312,496
As at 30
th
June 2013, a sample of three MDAs
and Seven RASs had unclaimed salaries
amounting to Shs.269,312,496 payable to
employees who were no longer working with
the MDAs/RS for various reasons including

death and retirement. This amount was yet
to be surrendered to Treasury as unclaimed
salaries as indicated in table 38 below.

Table 37: List of MDAs and RS with unclaimed
salaries
S/No Vote MDAs/RAS Amount (Shs)
1. 10 Joint Finance Commission 12,818,737
2. 37 Prime Minister's Office 16,183,592
3. 63 RAS Geita 3,668,079
4. 65
Ministry of Labour and
Employment
22, 466,761
5. 74 RAS Kigoma 27,136,507
6. 76 RAS Lindi 157,364,863
7. 82 RAS Ruvuma 2,843,275
8. 89 RAS Rukwa 3,879,907
9. 75 RAS Kilimanjaro 15,197,151.70
10. 79 RAS Morogoro 7,753,623
269,312,495.70 Total

Source: Individual reports for the financial year 2012/2013

Unclaimed salaries not remitted to Treasury
faces a risk of being spent contrary to the
original purpose of the funds. Management of
the respective votes should ensure
remittance of the same to the Treasury.

6.1.2 Delay in remitting unclaimed salaries to
Treasury and deductions to financial
Institutions Shs.79,328,681
(i) Delay in Remitting Unclaimed salaries
Reg.113 (3) of the Public Finance Regulations
2001 and the circular number
EB/AG/5/03/01VOL.VI/136 of 31 August 2007
from Ministry of Finance requires the
Accounting Officers to remit unclaimed

salaries to the Treasury without delay and
that, funds should not be used for any other
activity even if the expenditure is genuine.
To the contrary, salaries totaling
Shs.25,611,306 relating to financial year
2007/08, 2008/09, 2009/10 and 2011/12 at
Regional Secretariat Iringa (Vote 73) were
submitted to Treasury on 2
nd
May, 2013 vide
Payment voucher no. 1/5 and cheque
no.322885 dated 02/05/2013. Furthermore,
there was no acknowledgement receipt to
justify that the same were received by
Treasury.

(ii) Delay in remitting salary deductions
to financial institutions
Review of salary deductions remitted to
various lending institutions for the financial
year 2012/13 revealed that RS Iringa
remitted Shs.48,060,982 to several financial
institutions as repayment of loans and
contributions. However, it was noted that
the Secretariat did not remit the deductions
on time, as there was a delay of up to five
(5) months.

We further noted penalties which were
imposed to National Electoral Commission
(Vote 61) due to delay in remitting the
Statutory Deductions, Shs.5,656,393 paid to
the Director General of Public Services
Pension Funds (PSPF) in this regard.


Table 38: Penalty for Delayed Staff Deductions
P/v
Payment
Date
Particulars Amount (Shs.)
2822163 from July
1999 to March 2000
061VC12001253 07-05-13 3165452 386,393
5, 656,393
061VC12000253 29-10-12 5,270,000
Total

Source: NEC Payroll Information

Apart from the risk of being penalized for the
remittances to financial Institutions;
unremitted unclaimed salaries and
deductions faces the risk of financing
unplanned activities. Hence, Management of
the votes facing these challenges should
ensure timely remittances to the appropriate
Institutions.

6.1.3 Payments related to employees who were
no longer in service Shs.793,283,755
I noted payments amounting to
Shs.779,329,181 in respect of retired,
terminated and absconded employees
without being detected and deleted from
payroll timely after expiry of their service
contrary to Sect. 17 of Public Service
Retirement Benefit Act No.2 of 1999. The
payments related to four (4) MDAs, four (4)
RS and three (3) Embassies as indicated in
table 40 and 41 below;


Apart from that, three Regional Secretariats
had salary deductions amounting to
Shs.13,954,573 made at source by Treasury
with subsequent remittances to various
financial institutions. However, these
deductions were in respect of the employees
who were no longer in government service
for different reasons like retirement, death
or resignation. This amount of funds
incorrectly paid to the various beneficiaries
should be refunded to the Treasury.

Table 39: Payment to employees who were no
longer in service
S/No
Vote/sub
vote
MDAs/RAS Amount (Shs
1. 34
Ministry of Foreign Affairs and International
Cooperation (MFAIC)
7,904,151
2. 40 Judiciary of Tanzania 26,724,156
3. 70 RAS Arusha 28,696,726
4. 52 Ministry of Health and Social Welfare 87,157,948
5. 69 Ministry of Natural Resources and Tourism 32,394,926
6. 81 RAS Mwanza 5,873,645
7. 85 RAS Tabora 14,512,701
8. 87 RAS Kagera 591,600
9. 2005 Tanzania High Commission in Abuja 157,814,844
10. 2013 Embassy of Tanzania in Paris 289,666,694
11. 2021 Tanzania High Commission-Kampala 127,991,790
779,329,181 Total

Table 40: Unauthorized statutory deductions from
ex-government employees
S/N Vote MDA/RS Amount (Shs)
73.00 RS Iringa 2,166,974
81.00 RS Mwanza 10,340,527
85.00 RS Tabotra 1,447,042
13,954,543 Total



Analysis of payment to employees who were
no longer in service for central government
for the period of three years consecutively
from 2010/2011 to 2012/2013 is as
summarized below

Financial Year 2010/2011 2011/2012 2012/2013
Ineligible payments 142,715,827.99 55,917,338 779,329,181.21
Entities involved 7 MDAs 3 MDAs 7MDAs &4 RAS

Source: Individual reports for the financial years 2010/11-2012/13

Figure No. 11: Employees who are no longer in
service

The above situation indicates that there is
inadequate Internal Control over payment of
salaries which leads to substantial loss of
Government funds. Hence management
should strengthen Internal Controls by
ensuring that salaries paid to un-
existing employees are recovered and should
design strong controls through the use
of the LAWSON software packages to ensure
that salaries are only paid to verified
employees.

6.2 Absence/Inadequate Open Performance
Review and Appraisal System (OPRAS)
Regulation 22 (1) of the Public Service
Regulations, 2003 requires every organization
within the Public Service to operate an Open
Performance Appraisal System for all its
public servants; this requirement is in line
with the requirements of Standing Orders for
the Public Service D.63 (1) of 2009.

Further, Regulation 22 (2) of the Public
Service Regulations, 2003 explains the
purpose of the performance appraisal of
public servants with a view to discovering,
evaluating and documenting the potential
and shortcomings of individuals to enable
measures to be taken for continuous
improvement in efficiency and effectiveness
of public service. However, during the audit
on payroll and human resource records for
the year under review, it was found that a
number of offices were not carrying out Staff
Open Performance Appraisal with a view of
measuring staff performance. A sample of
these offices is shown in table 42 below:

Table 41: Absence/inadequate Open Performance
Review and Appraisal System (OPRAS)

S/No
Vote MDAs
1. 34 Ministry of Foreign Affairs and
International cooperation
2. 35 Directorate Of Public Prosecutions
(DPP)
3. 72 RS Dodoma
4. 75 RS Kilimanjaro


For improvement of service delivery, it is
important for the management of the
respective votes to adhere to the cited
Regulations by supervising the exercise of
Performance evaluation of employees.

6.3 Outstanding staff claims Shs.1,116,040,060
Review of the MDAs in terms of meeting
staffs claims noted that there was an
outstanding amount of Shs.1,116,040,060
which was due and payable to the
employees. This situation has a repercussion
in terms of employees motivation and
productivity. A sample of MDAs experienced
this problem is shown in table 43 below:


Table 42: Outstanding staff claims
Shs.1,116,040,060
S/No Vote MDAs Amount (Shs) Remarks
1. 49 Ministry of Water 929,139,870
Staff claims consisted of
promotion, unpaid salaries and first
appointment allowances.
20 staff got promotion during the
year 2008 and 2009.
However, no salaries or allowances
which became due following their
promotions were paid.
Claims related to expenses that
were supposed to be paid by the
Ministry of Foreign affairs and
International cooperation. These
claims includes:-
Medical expenses, School fees,
Electricity charges, Natural gas
charges, Rent (Residential house),
Internet and Water charges
2. 58
Ministry of
Energy and
Minerals
34,618,822
3. 2032
Tanzania High
Commission
Kuala Lumpur
152,281,368

As earlier on pointed out, long outstanding
claims have negative impact on staff
motivation. Hence, such staff outstanding
claims could affect the expected level of
service delivery. Management of the
respective votes should ensure that the
rightful claims are settled as per existing
procedures.

6.4 Inadequate number of staff
Human resource is a significant factor for
effective performance of any organization.
During the year under review we noted major
shortages of staff at MDAs and RS which

hinder efficiency at work place. The staff
shortages for a sample of selected MDAs/RS
are shown in annexure 'K':

Inadequate number of staff as compared to
the approved establishment is a challenge to
the required level of service delivery. Hence,
the Government need to strengthen its
financing abilities with the aim of employing
the required number of staff with the
ultimate goal of improving the service
delivery.

6.5 Deductions made to employees above two
third (2/3) of the gross salary
Debt Recovery Act No.7 of 1970 Sect.3
requires that, total deductions to
government employees should not exceed
two third of the basic salary. Furthermore,
this was emphasized again by the
Government circular with Ref:
No.C/CE.45/271/01/I/87 dated 19
th
March,
2009. During the year 2012/2013 I noted 12
cases in a sample of four (4) MDAs and eight
(8) RS whereby employees continued to
receive net salaries below one third of their
basic salary. MDAs/RS are summarized in
table 44 below

Table 43: Deductions made to employees over and
above two third (2/3) of the gross salary
S/N. Vote MDAs/RS
1. 24 Cooperatives Development Commission
2. 39 National Service(JKT)
3. 58 Ministry of Energy and Minerals
4. 70 RS Arusha

S/N. Vote MDAs/RS
5. 72 RS Dodoma
6. 74 RS Kigoma
7. 78 RS Mbeya
8. 81 RS Mwanza
9. 84 RS Singida
10. 86 RS Tanga
11. 91 Drug Control Commission
12. 75 RS Kilimanjaro

Excessive deductions could adversely affect
employees' performance and ultimately
affect the vote's service delivery.
Management of the respective votes should
take necessary action (including limiting
borrowing) in order to protect employee's
welfare.

6.6 Problems associated with the application of
Human Capital Management Information
System (HCMIS) LAWSON
The government invested in Human Capital
Management Information System (LAWSON)
to control government employees salaries.
The application of this new system is in
compliance with Circular No. 1 of 2010 issued
by the Chief Secretary, in which the
Government stated its position to embark on
e-government particularly in this area of
human resource, salaries and related
benefits management.
Despite some reported plausible
improvement in the human resource and
salary management as a result of LAWSON
9.05 application, there are still persisting

problems in some selected votes including RS
Singida and Ministry of Education and
Vocation Training which hinder the effective
performance of the system some of the
problems being:
Network failure problems have been
hindering the effective operation of the
system;
Bureaucratic tendencies in the
authorization of personnel data submitted
through the system;
Delay in providing feedback on the
information transferred through the
system;
Officers running the system being not
sufficiently conversant with how it works;
and inadequate number of Officers
involved with the system at the higher
decision making level.

Specific votes having challenges in using
HCMIS - LAWSON should collaborate with PO-
PSM and the Ministry of Finance to ensure the
system is efficiently and effectively used in
processing employees information.

6.7 Absence of Important Posts of Tourist
Officer
The Embassy of Tanzania in Berlin is among
the Embassies with multi-functions in areas
of tourism, trade and investments.

The Embassy of Berlin serves other eight
accreditation countries which are Poland,
Austria, Hungary, Switzerland, Republic of

Czech, Romania, Bulgaria and Slovakia. The
economic opportunities in the areas
highlighted above are expanding in each
year. Hence, having experts in tourism is
very crucial for enhancing and exploiting the
economic diplomacy activities in Berlin and
other accredited countries.

An audit review has noted that, the existing
staff cannot adequately serve huge areas
under the Embassy. We also noted that the
Embassy management had requested the
MFAIC to allocate it with tourist expert,
commercial officer and investment analyst.
However, none of the above posts has been
filled. Given the available opportunities
which can be exploited by the embassy; the
Embassy's Management should continue
reminding the MFAIC management on the
issue of allocating appropriate staff who can
bring changes in various areas including the
ones cited above.


CHAPTER SEVEN

REVIEW OF PROCUREMENT MANAGEMENT

7.0 INTRODUCTION
This chapter is in view of my responsibility on
the procurement legislation, as stated in the
Public Audit Act No. 11 of 2008 Sect 26 (c)
and (d) Sect. 44(2) of the Public Procurement
Act, 2004 and Reg. 31 of the Public
Procurement (Goods, works, non consultant
services and disposal of Public Assets by
Tender) Regulations, 2005 which specifically
require the CAG to include an evaluation and
examination of public procurement
procedures and processes as well as
compliance with procurement laws and
regulation in the regularity audits.

The procurement audit seeks to determine
whether the procedures, processes and
documentations for procurement and
contracting adopted by MDAs were in
accordance with the provisions in the PPA of
2004, Public Procurement Regulations
(GN.No.97 and 98 of 2005, and the standard
documents prepared by the Public
Procurement Regulatory Authority, and that
procurement carried out achieved the
expected economy and efficiency and
effectiveness in the use of public resources
(value for money).


7.1 Major Issues Identified on Procurement
Audit
Based on this year's audit and the last years,
I observed that procurement has continued
to be an area of controversy in ensuring best
value for public monies. While efforts have
been made by Government to enhance
procurement rules and procedures across the
public sector through implementation of my
previous recommendations together with
PPRAs recommendations, there are
indications that some entities are not
sufficiently diligent in ensuring compliance
with procurement rules in the areas that I
have audited. I observed instances of non-
compliance with procurement rules and
regulations in ensuring transparency, fair
competition, and value for money have been
achieved. The Procurement irregularities
noted in this year's audit are as follows:

7.2 Procurement without competitive
quotation Shs.235,855,610
The aim of Reg. 63 of PPR 2005 and Part (a)
of the first Schedule is to enhance economy
and value for money during procurement
process. For a procurement to be done
economically it is of paramount importance
to have competitive bidding from various
suppliers. This would help to get high quality
of products at lower price through
competition. Government through its
selected sample of MDAs/RSs conducted
procurements of Shs.235,855,610 without
using competitive bidding, this might cost

the Government by paying high for low
quality products due to lack of competition.
The table 45 below shows instances where
the sampled MDAs/RS did procurements
without competitions;
Table 44: MDAs/RSs which did procurement without
quotation
VT No Name of MDA/RS Observation Amount (Shs)
94
Presidents Office Public
Service Commission
Procurement of consultancy services
which did not undergo competitive
tendering
50,000,000
75 RS Kilimanjaro
Procurement of goods and services
not supported by competitive
quotations
47,091,190
2031 Tanzania Embassy - Brasilia Procurement made on the cash basis without competitive price quotations 42,016,072
86 RS Tanga
Irregular procurement through Single
Source
25,000,000
76 RS Lindi Maintenance of Motor Vehicles not competitively made 22,368,110
70 RS Arusha
not supported by quotations
20,334,500
56 PMO-RALG
Procurement of goods without
competitive bidding
13,413,380
63 RS Geita
Procurement made without
competitive tendering
6,500,000
77 RS Mara
Maintenance of Motor Vehicles made
without competitive quotations
9,132,358
235,855,610 Total

Source: Individual management letters

The problem of making procurement without
competitive quotation was also reported in
my previous general reports. Last year
procurement without quotation of
Shs.530,386,985.00 was observed in 10 MDAs.
This year, two MDAs, one oversees Mission
and 6 RS with total sum of Shs.235,855,610.
This shows that Government has positively
dealt with this problem in a very relative
small percentage. This challenge still exists
and more efforts are needed to eliminate.

7.3 Assets Procured but not operational
Shs.239,908,449
It is important for the Government to plan its
procurement so that it adds value to its
operations. To get value for money from
procured assets, all assets have to be used to
perform the intended activities. If
Government procures assets and do not use
them in its daily operations to increase
efficiency then there is no value for money
gained from those assets. Government
procured assets worth Shs.239,908,449 and
after being delivered these assets were not
put into use operation to add value in
government operations. Hence there was no
need of using tax payers money to buy
assets and leave them idle. See table 46
below.

Table 45: Assets Procured but not operational
VT No Name of MDA/RS Observation
Amount
(Shs)
72 RS Dodoma
Assets procured three
years back still not in
use
220,136,665
30
Presidents Office and
Cabinet Secretariat
Asset Management
Software purchased in
2011 not in use
19,771,784
239,908,449 Total


Tying Government money into assets that do
not generate any economic benefits in terms
of service delivery and which do not express
its value for money of the tax payers funds
amounts to misuses of public funds. If an

accounting officer does not have uses of any
assets, it is better not to procure the assets
and instead use the same amount on
activities that would generate economic
benefits and add value to Government
operational.

7.4 Payments Made Above Invoice/Contractual
Amount Shs.674,331,273
Sect. 122 (1) of PPR 2005 requires a
procuring entity to obtain reports (invoice,
delivery note, inspection reports) on
acceptance of goods that have been
delivered and if are satisfactory, shall
authorize promptly payment to the supplier.
Review in compliance with this regulation, I
noted that Government has been paying its
suppliers' amounts in excess of the
invoice/contract. As a result the government
incurred a loss of Shs.674,331,273, in this
financial year by paying above the invoiced
amount for which efforts should be exerted
to recover the money. See a table 47 below:

Table 46: Payments Made Above Invoice/Contractual
Amount
(Shs.)
40 Judiciary of Tanzania
Payments exceeding invoiced
amount in the procurement of
Motor Vehicles
609,523,267
36 Rs Katavi Overpayment to Toyota Ltd 21,334,478
37 Prime Ministers Office
Over payment to Contractor for
refurbishment of Old German
Building and Disaster
Management Office
25,947,276
91 Drug Control Commission Overpayment to contractor 17,526,252
674,331,273



This shows that there are weak controls over
management of Government money. By
paying extra from what has been delivered is
a sign of weak controls and it shows that
there is no coordination between accounting
department and procurement unit. This
problem has to be dealt with to avoid
recurrence of over payments in the future.

7.5 Procurements out of Annual Procurement
Plan Shs.2,748,885,871
Procuring entities are required to prepare
Annual Procurement Plan in accordance with
the regulation 46 (9) of the PPR 2005. It
helps suppliers to be aware of what items
government will be procuring and it might
help Government in saving money by opting
bulk procurement which might attract
discount from suppliers. Failure to
accommodate all procurement needs in one
plan might result to emergency procurements
which might not reflect the actual value for
public monies. In this year Government spent
a total of Shs.2,748,885,871 to make
procurement out of the annual plan contrary
to the cited regulation above. See table 48
below:


Table 47: Procurements out of Annual Procurement
Plan
VT No
Name of
MDA/RS
Observation Amount (Shs.)
38 Tanzania Peoples
Defense Forces
(Ngome)
Procurement were made
without being included in
the procurement plan
2,477,842,091
82 RS Ruvuma
Procurements of goods not in
the annual procurement plan
26,320,000
79 RS Morogoro Procurement made beyond the procurement plan 244,723,780
2,748,885,871 Total


In year 2012/13 and 2011/2012 according to
PPRA the overall average level of compliance
with the preparation and implementation of
annual procurement plans improved to 68%
as compared to the compliance level of 54%
in 2010/2011. But this year again the same
problem reoccurred, Government has to
comply with recommendations given by PPRA
and by my office so as for this problem not to
appear again in the future.

7.6 Procurement without approval of Tender
Board Shs.480,000,000,000
It is a requirement of Reg. 41 of PPR of 2005
for a Tender Board to examine draft tender
by passing them through requirement of
tender and approve it. Before approving it
Tender Board has to make sure that all
necessary requirements that would lead to
achieve value for money are incorporated in
tender document. Also Tender Board is
responsible to deliberate on the tender and
decide whom to award the tender. Issuing

tender to a supplier without Tender Board
approval might lead to award contract not to
a perfect supplier or contract that would not
produce value for money. Government
entities has entered into various contracts
worth Shs.480,000,000,000 without tender
board approval as shown in the table 49
below.

Table 48: Procurement without approval of
Tender Board
VT No Name of MDA/RS Observation Amount (Shs.)
57 Defense And National
Service
Procurement
contract without
MTB approval
480,000,000,000
480,000,000,000 Total


In my 2011/2012 report, I also reported this
problem which appeared in RS-Kilimanjaro
amounted to Shs.107,171,592. This year the
amount has increased to
Shs.480,000,000,000. This shows that in few
MDAs Tender Boards are not working
independently. Government has to look the
way to empower Tender Boards and make
them operate independently.

7.7 Procurement using Imprests
Shs.470,907,577
Sect 58(2) of the PPA 2004 requires
procurements to be conducted in a manner
that maximizes competition and achieve
economy, efficiency, effectiveness
transparency and value for money. Using

cash to make purchase without advertising
the work or without competitive price
quotations from at least three suppliers will
be violating Sect. 58 (2) of PPA 2004. By
violating this section of the act, Government
might be involving in making purchase not in
an economy way and thus will be costing
higher than it would have cost when calling
for competitive quotations. Government
through its MDAs/RS purchased different
items using cash which directly implies that
the method used was not economical,
efficient and transparent. See table 50 below
showing MDAs/RS which uses cash method to
make procurement.

Table 49: Procurement using Imprest
Amount
(Shs.)
38
Tanzania Peoples
Defense Forces
(Ngome)
Using imprest to effect
procurements
410,808,973
36 RS Katavi Procurement made through Imprest 9,000,750
74 RS Kigoma Procurement of fuel on cash basis 2,797,685
95 RS Manyara
on cash basis
10,727,600
47 RS Simiyu Procurement made by cash 3,830,000
86 RS Tanga
Procurement made through the use
of Imprest
6,067,400
63 RS Geita Procurement made through Imprest 15,275,169
85 RS Tabora Procurement made vide imprest 12,400,000
470,907,577 Total



For government to make procurement in an
economical way and get real value for
money, all major procurements should be
made through competitive bidding and
quotations. This will increase value for
money of items procured by Government and
will reduce any possibility of using
government money to procure items that will
be substandard.

7.8 Stores procured but not accounted for in
stores ledgers Shs.147,691,351
Reg. 198 of the Public Finance Regulation
requires all stores received to be brought on
charge without delay in stores ledger and to
be supported by relevant receipts, issues and
physical balances. Government put this
regulation as a control on monitoring of
stores. Failure to comply with this
regulations means that the entire
management of stores is in danger of
mismanaging stores purchased and stores
issued for utilizations. Few MDAs/RS violated
this regulation by failing to keep records of
stores purchased and issues of stores to final
users. Sums of Shs.147,691,351 of stores
materials were purchased and not accounted
in Government stores ledger and hence their
accountability could not be ascertained due
to lack of records. Details of procurements
are summarized in the table 51 below:


Table 50: Stores procured but not accounted in
store ledgers
Amount
(Shs)
51
Ministry Of Home
Affairs
Accountability and utilization of fuel supply not
confirmed
83,000,000
47 RS Simiyu Stores not taken on ledger charge 12,807,900
82 RS Ruvuma Stores not taken on store Ledger 2,316,500
71 RS Coast Stores items purchased not recorded into stores ledger 5,500,000
87 RS Kagera Unconfirmed utilization of fuel 23,854,778
85 RS Tabora Supplies delivered but not taken on ledger charge 20,212,173
147,691,351 Total

This problem has been reported in my
previous reports, and some accounting
officers have been reluctant to implement
my recommendations about keeping records
of purchases and issues in store ledgers. This
year the same problem has occurred again.
This shows that the MDAs store sections are
not fulfilling their core responsibilities. Its
important to look at this section and
ascertain the causes for this unit not properly
handling their responsibilities and determine
the necessary actions to be taken against all
store keepers who are not performing their
duties appropriately.

7.9 Issues Identified by PPRA
Public Procurement Regulatory Authority
(PPRA) is a regulatory body established under
the Public Procurement Act 2004. The
Authority is charged with regulatory
functions and vested with oversight powers

and responsibilities on all public procurement
activities carried by all public bodies. Its
objectives among others is to monitor
compliance of procuring entities by ensuring
the application of fair, competitive,
transparent, non-discriminatory and value for
money procurement standards and practices.

Here below are some of the audit findings
from the PPRA Annual Performance
Evaluation Report which I have found worth
to include in this years General Report.

7.10 Compliance with PPA 2004 and its
regulations of 2005
This year PPRA conducted procurement audit
in thirty two (32) MDAs. On the basis of its
compliance criteria, PPRA indicated an
average level of compliance of 66% compared
to 69% reported in the last years audits.
There is a decrease of 3% on the level of
compliance compared to year 2011/2012 and
major weakness noted was (i)
Appropriateness of contract management
(66%) (ii) Management of procurement
records (56%) (iii) Implementation of systems
prepared by PPRA (23%), and (iv) Handling of
complaints in procurement process (-5%).

7.11 Assessment of contracts management
The audits revealed significant performance
gaps on contracts management which had
serious negative consequences in the delivery
of services, goods and infrastructure facilities
including; delivery delays, cost overrun, poor

quality of services, goods and works, and loss
of public funds through fraud. The
compliance on general contract
administration, time, quality and scope
control were relatively low at 60% of all 32
MDAs audited.

7.12 Management of procurement records
On the management of procurement records,
the audits revealed that only 45% of the
audited contracts were found to have
complete and properly arranged records. This
deficiency, to a large extent, affected the
efficiency of the audit exercise as well as the
compliance level of the audited PEs.

7.13 Evaluation of Procurement Information
Management System (PIMS)
Procurement Information Management
System (PMIS) and Checking and Monitoring
system aim simplifying the management of
large volume of procurement data and
efficient monitoring of procurement
activities. However, the audits have revealed
that about 57% of the audited PEs complied
with the requirement for submitting Annual
Procurement Plans, 5% on the submission of
tender process reports, 8 % on contract
completion reports, 3% on monthly
procurement reports, 18% on quarterly
procurement reports and 34% annual
procurement reports.
The reasons cited for low compliance
included the system not being user friendly,
the system being time consuming, unreliable

internet access, lack of internet facilities,
lack of computers, and inadequate
knowledge in implementing the systems.

7.14 Recommendations given by PPRA
In order to address weakness on generally
compliance of PPA the following were
recommended and approved by the Board of
Directors of PPRA;
I) All PEs with good performance be
commended for their performance and
all Accounting Officers, TB Chairmen
and Heads of PMUs of the PEs with
poor performance to be summoned
before the Board of Directors of PPRA
to give reasons for the poor
performance and to discuss strategies
to address the observed shortfalls.
II) All 68 PEs with performance below the
65% target be required to organize
training to their staff on the
application of PPA, Regulations and,
guidelines and systems prepares by the
Authority. The training should be
conducted by PPRA and be tailored to
each PE (or a group of PEs) depending
on the weaknesses observed during the
audits.

In order to address weaknesses observed in
contracts management, the following was
recommended;
I) To strengthen the capacity of PPRA to
monitor the procuring entities in terms of
adequate staff, working tools (including

measurement tools), vehicles and training
to staff.
II) PPRA should prepare a contracts
management manual/guideline to guide
procuring entities while managing
procurement contracts.
III) Capacity of Internal Audit Units should
strengthen to enable them to audit
adequately procurement issues and
implementation of works contracts.

the management of procurement records,
the following is recommended;
I) PPRA to prepare a guideline/manual for
management of procurement records in
procuring entities.
II) PPRA Board of Directors to issue stern
warning to the PEs which refused to avail
to the auditors procurement documents
for audit purposes.
III) Procuring entities to be required to
ensure that adequate space and storage
facilities are provided for PMUs for them
to work efficiently.

the implementation of PPRAs procurement
information management systems (PIMS),
PPRA should critically assess the causes for
non-compliance and improve the systems to
make them more user friendly.


7.15 Anomalies in procurement and stores
management observed by Directorate
of Government Assets Management
Division (Stock Verifier)
Part XV of the PFR deals with the need for
having an Independent Stock Verification in
the stores of MDAs/RS. In this regard, I have
received Stock Verification reports in
accordance with Reg. 245 (3) of PFR of 2001
that The Stock Verifier shall retain one copy
of the report for his own record and send one
copy to each Accounting Officer concerned,
the Permanent Secretary, Accountant
General and to the Controller and Auditor
General. In compliance with the above
requirements, for the year ended 30
th
June,
2013 the Division of Government Assets
Management under the Ministry of Finance
conducted stock verification exercise in
various MDAs and RS offices and noted the
following anomalies:


Table 51: Stock Verifier Reports
S/N Weaknesses Amount(Shs)
1. Unsupported Issues of Stores and Fuel 926,306,813
2. Unsupported Receipts of Stores 2,726,633,911
3. Unaccounted Receipts of Stores 732,686,791
4. Unmaintained Loan Register 46,326,412
5. Excessive Issue of Fuel 4,362,065
6. Unapproved Additional Works 37,128,000
7. Improper Posting 1,910,000
8. Uncompleted Works 242,100,440
9. Payment of Works not Completed 44,857,928
10. Deficient Stores 436,713,066
11. Unaccounted Purchases of Stores 5,342,194,700
12. Unreceipted Issues of Stores 3,779,659,039
13. Issues against Nil Balance 41,363,200
14. Irregular Procurement 1,115,000
15. Procurement Without Competitive Quotation 237,754,344
16. Stores Neither in Master Inventory Register nor Inventory
Sheets
570,887,400
17. Unauthorized Payment of Works 3,240,000
18. Irregular Issues Of Stores 3,625,000
19. Improper Posting 7,500,000
20. Un-transferred Balance Of Stores 1,160,934,158
21. Outstanding Stores On Loan 133,509,210
22. Fuel Not Recorded In The Log Book 216,789,901
23. Fuel Not Taken On Ledger 433,858,166
24. Unaccounted Issues Of Stores 110,066,640
25. Maintenance And Repair Of Government Vehicles To Private
Garage Without Prior Approval From E & M Division
94,922,669
26. Undelivered Stores 1,773,377,965
27. Un posted Receipts Of Stores 93,015,600
28. Un posted Issues Of Stores 866,525,065
29. Exhibit Items Not Handed Back To Respective Owners 2,614,000
30. Expired Drugs/Chemicals 31,312,095
20,103,289,577 Total

See annexure 'L' for further details and
MDAs/RS offices involved.

Significant proportion of public funds is still
being spent on procurement. T here is need
for all MDAs and RSs to exert intensive
efforts to compl y wi t h t he Public
Procurement Act and i t s regul ati ons by

improving controls on how procurement is
done including ensuring proper asset
management of the government. Among the
controls which are worth pursuing include;
equipping PEs with qualified procurement
personnel, strengthening PMUs, strengthening
learning institutions involved in building
procurement capacity of Central
Government, strengthening Tender Boards
and Internal Audit Units.

CHAPTER EIGHT

ASSETS MANAGEMENT AND LIABILITIES

8.0 INTRODUCTION

Process flow in Asset Management
The Asset Management process defines work
flows, processes and methods for the
management of assets in support of MDAs/RS
objectives in compliance with the public laws
and regulations. It involves managing all the
stages in the life cycle of an asset: acquiring
the asset, receiving the asset, maintaining
the asset (including tagging and physical
inventory count), and disposal of the asset as
shown below:

The overall objective of the audit was to
assess the adequacy and efficiency of Asset
Management policies and procedures as
they relate to asset procurement, tracking
monitoring, recording, reporting, disposal
of assets, and depreciation and compliance
with IPSAS, Government laws and
regulations. In order to safeguard assets;
controls should be in place to secure them
from theft or misuse.


Observations arising from the audits of MDAs
and RS are summarized in the paragraphs
below. Details of these observations are
contained in their individual management
letters issued separately to the Accounting
Officers.
The summary of weaknesses below indicates
mismanagement of assets which are mostly
needed public resources in service delivery:

8.1 Non maintenance/establishment of proper
Non current asset register
An asset register is described as a complete
and accurate list of assets owned by an
entity that is regularly updated and
validated. It records the opening and closing
balances of classes of property, plant and
equipment and is used to support the
reported figures in the financial statements.

The asset register is a critical component of
an asset management information system.
The size and complexity of an asset register
will depend on the number and type of assets
held by an entity and the volume of
movements on the asset register (additions,
disposals or transfers). The asset register
should be regularly reconciled to the
balances in the general ledger.

As a minimum, an effective asset register
should contain the following information:
Name of asset; Physical description; Serial
Number, unique identifier, or other asset
identity tag; Date of purchase (date asset

was brought into life); Physical location;
Responsible persons (charged with
stewardship of the asset); Expected useful
life; Date of last impairment review (and
assessment of useful life); Historic cost;
Depreciation method; Book Value; and Date
of disposal. All assets need to be recorded in
the asset register for easy of references. I
noted anomalies in the asset register
management as follows:
(i) Necessary information discussed above
were not shown.
(ii) Assets were not recorded in the asset
register.
(iii) Unique identifier or code number was
not indicated in the asset register.
(iv) Amount of PP&E disclosed in the
financial statement differs with amount
shown in the fixed asset register.
(iv) Disposed assets still appearing in the
register.

The following MDAs/RS shown on table 53 did
not maintain a proper fixed asset register as
explained above:


Table 52: List of MDAs/RS noted with anomalies in
asset register management
S/No Vote MDAs/RAS
1. 10 Joint Finance Commission
2. 13 Financial Intelligent Unit
3. 35 Director of Public Prosecutions (DPP)
4. 37 Prime Ministers Office
5. 38 Tanzania Peoples Defence Force
6. 52 Ministry of Health and Social Welfare
7. 61 National Electoral Commission
8. 73 RAS Iringa
9. 75 RAS Kilimanjaro
10. 78 RAS Mbeya
11. 80 RAS Mtwara
12. 81 RAS Mwanza
13. 82 RAS Ruvuma
14. 85 RAS Tabora
15. 91 Drug Control Commission
16. 98 Ministry of Works
17. 99
Ministry of Livestock and Fisheries
Development
18. 2005 Tanzania High Commission in Abuja
19. 2021 Tanzania High Commission-Kampala
20. 2023 Tanzania Embassy Bujumbura
21. 2004 Tanzania embassy Kinshasa
22. 2024 Embassy of Tanzania in Riyadh
23. 65 Ministry of Labour and Employment

Source: Individual reports for the financial year
2012/2013


Review of asset management noted 23
MDAs/RSs which is equivalent to 26% of the
total audited MDAs have been maintaining
improper asset management register. Central
Government adopted IPSAS accrual basis of
accounting in preparation of their financial
statements, although there is a provision of
five years to become fully compliant with the
IPSAS accrual, I insist for the government to
identify all its assets and record them in the
asset register with complete information
concerning these asset and all disposed
assets to be removed from the asset register.

8.2 Grounded and un-serviceable Noncurrent
asset
According to Regulation 254(1) of the Public
Finance Regulations of 2001 where it is
considered that stores, vehicles, plant, or
equipment, have reached the end of their
useful life or are beyond economical repair
or are unserviceable for any other reason or
have become redundant through
obsolescence they must be retained until a
sufficient quantity has accumulated to merit
convening of a Board of Condemnation to
inspect to and report on the items. However,
during the year under review we noted that
various assets were grounded for too long
without taking disposal procedures. I strongly
advise the government assets management
division under Treasury to work and
accomplish disposal procedures.


Grounded noncurrent assets which are in
good condition needs to be repaired so as to
continue getting benefits from them. Those
assets which are unserviceable I recommend
to the government through respective
Accounting Officers to dispose them in order
to avoid future loss through deterioration or
outrights theft. Referred annexure 'M'.

8.3 Partial revaluation of Property, Plant and
Equipment
IPSAS No.17 Paragraph 53 states that; the
items within a class of property, plant, and
equipment are revalued simultaneously in
order to avoid selective revaluation of assets
and the reporting of amounts in the financial
statements that are a mixture of costs and
values as at different dates, but to the
contrary the MDAs/RS had made valuation for
some of its buildings and leaving others
without being valued and therefore, the
amounts presented in the financial
statements will have a mixture of costs and
re-valued amount as at different dates.
A review of supporting schedules for
Property, Plant and Equipment related to
buildings, motor vehicles and motor cycles of
MDAs/RS revealed items on those categories
disclosed assets without values contrary to
Para 49 of IPSAS 17 resulting to
underestimated figure of PP&E. Omission of
asset value signifies that proper valuation is
yet to be done. The relevant votes with this
challenge are as shown in the annexure 'N'.


Although Central Government has adopted
IPSAS accrual basis of accounting and a five
years provision has been granted, theres a
need of revaluing their assets so as to
accommodate them in the financial
statements and all assets which will not be
revalued need to be disclosed.

8.4 Property, Plant and Equipment lacking
ownership documents
As at 30
th
June 2013, I noted that land and
buildings owned by the MDAs and RS had no
title deeds in order to confirm rights and
obligation of the reported PPEs on legal status
and ownership as shown on table 54 below.

Table 53: List of MDAs and RS lacking ownership
documents
S/No Vote MDAs/RAS Remarks
1. 68 Ministry of
Communication, Science
and Technology
Building situated at plot no. 1168/19 along
Jamhuri Street has no title deed
2. 72 RAS Dodoma Missing title deeds Mpwapwa DCs Office
Block A ;Bahi-Building plot No.30 block H;
Bahi-DC House Plot No.4 Block H, Chamwino
DC Office Plot No 902 Block D; Chamwino
DC Office Plot No.997 Block D;RC Residential
Plot No 42 -43 Mlimani
3. 88 RAS Dar Es Salaam Lack of title deeds of the land owned by
RAS Dar Es Salaam
5. F75 RAS Kilimanjaro Building located at DAS Office Rombo
(Mashati), DAS office Rombo (Usseri) and DC
OFFICE Mwanga acquired in the year
1971,1972 and 1988 respectively
Missing title deeds of the following buildings
allocated at plots Nos
28,29,30,31,32,45,46,112,113,114,115,
116,117 and 118 at Kilimatinde in Tabora
4. 93 Immigration Service
Department


Ownership of assets is confirmed through
having legal documents. The government
should ensure that title deeds to confirm
that land and buildings are owned by their
respective MDAs/RS are processed
immediately and held as evidence of
ownership of the assets.

8.5 Improper recognition of intangible assets
Shs.31,681,109,928
Included in the sampled MDAs and RS
statement of PPE are intangible assets of
Shs.31,681,109,928 which are wrongly
classified and recognized in the system
generated financial statements. Explanatory
notes in the financial statements described
these intangible assets as reports,
documents, appraisal cost as summarized in
the annexure 'O'. Information contained in
the financial statements are not reliable and
may mislead potential users of the reports.
The noted financial systems anomaly of
capitalizing transfers and other items shown
above as intangible assets of these Ministries
needs to be resolved by the Ministry of
Finance by providing these with the new
items to replace the previous ones. True
value of intangible asset needs to be
reflected in the financial statement hence
the government to ensure that the value of
intangible assets is as per IPSAS 31
requirements.


8.6 Absence of monitoring devices (CCTV
camera) at weighbridge stations
TANROADS CEO issued letter of 07.06.2011 to
TANROADS Regional Managers requiring them
to ensure prompt repair of defective remote
displays, CCTV Cameras and weigh ticket
printing system at the weighbridge stations.
CCTV Camera and external remote weight
display needs to be repaired so as to
enhance transparency on weighbridge
operations and reducing to the minimal if not
eliminating unnecessary complaint from
transporters, comply with the Weight and
Measures Agency rules which emphasize on
transparency to stakeholders to view and
confirm the weight displayed during the
weighing process.
However, during audit visit, it was noted that
the CCTV Cameras were not yet installed on
the following sampled weighbridge stations:
a) Namanga and Makuyuni (Arusha)
b) Mikese , Kihonda and Mikumi
(Morogoro)
c) Uyole and Mpemba (Mbeya)
d) Makambako (Iringa)

Monitoring devices enhance transparency on
weighbridge operations. The government
should ensure that these devices exist and
are functional in all weighbridge stations for
improving transparency.


8.7 Misclassification of Development Funds
Transfer Shs. 696,991,606,941
Para 13 of IPSAS 17 defines Property, Plant,
and Equipment as tangible items that are
held for use in the production or supply of
goods or services, for rental to others, or for
administrative purposes; and are expected to
be used during more than one reporting
period. Also para 14 of IPSAS 17 provides
recognition criteria for Property, plant, and
equipment that shall be recognized as an
asset if, and only if it is probable that future
economic benefits or service potential
associated with the item will flow to the
entity; and the cost or fair value of the item
can be measured reliably.

During the year under audit I noted that to
two (2) MDAs reported transfer of
development funds amounting to
Shs.696,991,606,941 under Property, Plants
and Equipment as at the end of the financial
year 2012/2013. However, the reported
amount of Shs.696,991,606,941 in the
financial statement was transfer of funds to
Ministry institutions to meet development
activities whereby the item of transfer does
not meet the definition of Property, Plant
and Equipment as well as the recognition
criteria as stated above. Information
contained in the financial statements is not
reliable and may mislead potential users. The
affected Ministries are as shown on table 55
below:


Table 54: List of MDAs and RS with Transfer of
Development funds
S/No Vote MDAs Transfer included in
the PP&E (Shs)
Remarks
1 46 Ministry of
Education and
Vocational Training
(MoEVT)
26,797,695,648 Transfer to Colleges and Universities
2 98 Ministry of Works 670,193,911,293 Transfer to Ministry Institutions (i.e.
TANROADS, TBA and TEMESA) to carry
out construction and rehabilitation of
roads works, building of government
houses and purchase of ferries and
heavy plants.
696,991,606,941 Total

Source: Individual reports and Financial Statement for the financial
year 2012/2013

Rectification in the Chart of account to
separate items of recurrent and capital
nature in the Epicor system needs to be done
by the Ministry of Finance through the
Accountant General.

8.8 Inadequate management of Ivory tusks
stockpile and other trophies
During audit and verification of inventories
held at Ivory room-Dar es salaam and
outstations under the Ministry of Natural
Resources and Tourism, I noted that there is
no register maintained to record all
inventories held in the main store (ivory
room) at the Ministrys headquarters-Dar es
Salaam. Local inspection conducted in
upcountry stations revealed a large number
of trophies were kept at various outstations
for more than a year instead of being
transported to the Ivory room at the

Ministrys headquarters for safe custody. I
also noted the following shortcomings;

(i) 108 large elephant tusks and 20Kgs of
tusks were missing from Kilwa Police
Station-Lindi
Review of documents at Miguruwe
Game Reserve noted that, during the
period from 5
th
June 2012 to 8
th
June
2012, 108 large elephant tusks among
others were held as exhibits at Kilwa
Police Station. Out of 108 impounded
tusks, 74
26
were totally missing and 34
tusks which were relatively large were
interchanged with other pieces which
were relatively small compared to the
impounded ones (Case no. ECO
3/09/2009 and Case no. KLM
/IR/43/2010 (ECO 2/2010).
Furthermore, we noted that 20 Kgs of
impounded tusks were also missing
(refer case KLM/IR/184/2009 (7 KGS),
KLM/IR/235/2009 (3KGS),
KLM/567/2010 (10 KGS)).

(ii) Elephant tusks with large size illegally
exchanged with tusks of smaller size
resulting into a loss of 203.66
kilograms at Kilwa Police station
Elephant tusks of large size with total
of 498.3 kilograms were impounded in
different occasions and kept at Kilwa

26
Refer case no. KLM/IR/144/2009 (4 PCS),
KLM/498/2008(4 PCS), KLM/501/2008(10 PCS) KGS 15,
KLM/4/2007(46 PCS), KLM/IR/277/2007(10 PCS)

police station as exhibit. However, a
review of the related documents
revealed that the tusks of large size
were exchanged with tusks of small
size resulting into a loss of 203.66
kilograms.

(iii) 103 elephant tusks kept at Liwale
Police Station without awareness of
the Director of Wildlife
Site visit at Liwale game reserve
disclosed that, there are 103 elephant
tusks in possession of Liwale police
station. However, the aforesaid
elephant tusks have no any
corresponding records in the office of
Liwale Game Reserve.

(iv) Improper release of exhibit of Vehicle
No. T903 AGF by Police at Kilwa which
was captured with 26 kilograms of
elephant tusks (valued at
Shs.135,000,000) whose case is still at
the court.

In the absence of proper records tusks may
be misappropriated without management's
knowledge. The government should ensure
effective controls are in place for managing
ivory stockpile and other trophies in the
whole country.


8.9 Non disclosure of imprest as receivables
Shs.288,923,451
Reg. 103(1) of the Public Finance
Regulations, 2001 requires imprests to be
retired as soon as the necessity for them
ceases to exist. A verification of imprest
related records revealed that imprest
amounting Shs.288,923,451.45 were yet to
be retired contrary to the prescribed public
finance regulation. In addition, the imprests
were not disclosed as receivables in the
Statement of financial position contrary to
Accounting Circular No.11 of 2012/2013 and
IPSAS 1 accrual basis on presentation of the
financial statements, consequently, the
financial position of the MDAs may not
portray financial affairs as at 30
th
June,
2013. This anomaly was noted in the
following Ministries:

Table 55: List of MDAs and RS Non disclosure of
receivables
S/No Vote MDAs Amount(Shs)
1. 49 Ministry of Water 158,875,201
2. 51 Ministry of Home Affairs 119,515,961
4 95 RAS Manyara 1,800,000
5
2007
Tanzania High Commission Lusaka
Zambia
3,800,989
288,923,451 Total


The government to ensure that accounting
officers play their part by preparing financial
statement which shows a true and fair view.
Receivables to be disclosed as per Accounting
Circular No. 11 of 2012/2013 and IPSAS 1
accrual basis. The government is advised to

put in place the policy for collecting its
receivable on time.

8.10 Unsettled liabilities amounting to
Shs.277,728,051,810.
As at 30
th
June 2013, the MDAs/RS had an
outstanding accounts payable balance of
Shs.277,728,051,810. The aging analysis
indicated that this amount has been
outstanding for more than 12 months.
The Ministry of Water reported Shs.
6,152,485,146 as liability for the year under
review, Included in the figure of liabilities is
Shs.5,152,376,652 equivalent to 80% of the
total liabilities being unsettled bills due to
TANESCO.
Out of the reported liabilities of the Ministry
of Home Affairs-Police Force Department,
Shs.13,333,345,896 equivalent to 11% of the
total liabilities were interest and penalty. A
huge interest and penalty on loan were
charged on outstanding liabilities due to
failure of the Department to honor its
obligations, as a result of contractual
agreements entered with the National Health
Insurance Fund (NHIF) and National Social
Security Fund (NSSF) for purchase of Motor
vehicles in years 2010 and 2012.
We are concerned with the liquidity problem
of respective MDAs/RS as failure to discharge
their maturing obligation on time will affect
its future plans as they fall due. The
MDAs/RS with unsettled liabilities are shown
in annexure 'P'


Government through PMG should ensure that
Accounting Officers in MDAs/RS put in place
sound budgetary controls over expenditure
and ensure budgets for settling the long
outstanding liabilities are set aside in the
coming year. The Government is further
advised to increase its budget allocation and
fund releases in order to avoid debt
accumulations. In future, all obligations need
to be paid on time with a view of avoiding
paying interests and penalties.


CHAPTER NINE

9.0 SPECIAL AUDIT

9.1 Introduction
The Controller and Auditor General may
undertake special audit in accordance with
section 29 of the Public Audit Act, 2008. In
addition, Regulation 79(1) of Public Audit
Regulation, 2009 state that a special audit
may be conducted where an Accounting
Officer or any person, institution, Public
Authority, Ministry, independent
Department, Agency, Local Government
Authority and such any other body, requests
in writing to the Controller and Auditor
General; provided that, the Controller and
Auditor General shall not be bound to accept
such request.

The scope of audit shall be determined by
the person requesting the special audit;
however Regulation 80(2) allows the
Controller and Auditor General to modify the
scope of the audit as he shall deem
necessary.

During the financial year under review, I
carried out four (4) special audits. Key issues
from the special audits are summarized
below; however individual special audits
reports have been issued to respective
authorities in accordance with Regulation 81
of the Public Audit Regulations, 2009.


9.2 Report on the audit conducted on
Designated Referral Hospitals and
Designated Voluntary Agency Hospitals for
2010/11 and 2011/12
The following are key findings from the
special audit conducted on Payrolls and
Other Charges in respect of 4 Referral
Hospitals, 48 District Designated Hospitals
and 39 Voluntary Agency Hospitals for the
years 2010/2011 and 2011/2012. The findings
have been grouped into two main areas of
payroll audit and other charges (OC).

Payroll
Payment of salaries to non-existing
Employees Shs. 754,992,183
Salaries paid to retirees, absentees and
ineligible officers through personal
bank accounts - Shs. 754,992,183. This
was noted in 10 out of 91 hospitals.

Unclaimed salaries retained in Hospitals
of Shs. 3,047,574,792
Unclaimed salaries amounting to
Shs.3,047,574,792 pertaining to retirees,
absentees and ineligible officers retained
in various hospitals instead of remitting
this amount to Treasury. The hospital
management paid salaries to staff who
are not in the Government Payroll and
other amounts were used in other hospital
charges.


Unpaid Salary arrears Shs.
2,323,084,860
Accumulation of salary arrears that have
been outstanding for a long period of time
Shs. 2,323,084,860.

Other charges
Non maintenance of separate accounts
for grants received from the Ministry of
Health and Social Welfare (MoHSW) with
other hospital receipts.
Some Hospitals' managements mixed the
Government grants with other sources of
hospital revenue in a single account. Also,
some of these hospitals did not maintain
vote books to separate funds received
from the Ministry (Government) and this
from other various hospital sources.

Outstanding Liabilities and Commitment
Shs. 2,511,881,024
We noted outstanding liabilities of Shs.
2,511,881,024 relating to arrears of
salaries, on leave allowances and
suppliers claims. There is a high risk of
spending the next years' budget to settle
previous years commitments, hence,
affecting planned objectives.

Amount not confirmed to have been
received by Hospitals - Shs.304,075,145
Shs. 304,075,145 disbursed to various
hospitals were not confirmed to have
been received by those hospitals. The
Ministry of Health and Social Welfare will

have to write on this and establish the
whereabouts of this funds.

Un-reconciled difference of funds
released to DDH and VAH by MoHSW
Shs.84,996,355.
Shs. 823,870,474 was transferred to DDH
and VAH by MoHSW. However,
Shs.738,874,119 was verified to have
been received leaving a difference of Shs.
84,996,355 which will have to be
recovered to establish precisely
whereabouts of the funds.

Disbursement of funds to Hospitals
without breakdown according to their
nature of expenditure.
MOHSW transferred funds for other
charges without being itemized. Hence,
the hospitals utilized funds without
having guidance.

9.3 Ministry of Works on Procurement of MV
Misungwi for financial year 2004/2005
The Ministry of Works is responsible through
Tanzania Electrical Mechanical and
Electronics Service Agency (TEMESA) to
regulate ferries in the country. In the fiscal
year 2004/2005, The Permanent Secretary,
Ministry of Works entered into contract
No.10014/2004/2005 on 10
th
May, 2005 with
M/S Sinnautic International of P.O. Box 234,
4900 Oosterhout, Netherlands for the Supply
of new ferry to be plying between Kigongo-

Busisi at a contract price of Euro 2,483,441-
CIP Mwanza.

Summary of findings from the special audit
conducted at the Ministry of Works on
Procurement of MV Misungwi were as shown
below:
One caterpillar engine works after direct
connection of circuits engine to the
propulsion unit without going through the
clutch. This practice will cause early
engine damage.
Inadequate supervision and monitoring of
the contract No.10014/2004/2005 with
Sinnautic International.
Changes in the contract terms without
prior approval of the Accounting Officer
and Tender Board.
MV Misungwi was not officially handed
over to the Ministry of Works.
Nugatory expenditure amounting to Shs.
29,402,371.80 for clearing spare parts
despite the fact that the contractor had
already been paid for the same tasks.
Late delivery of the ferry, and non
delivery of spare parts amounting to Euro
41,140.
Non appointment of inspection and
acceptance committee in accordance
with regulation 127 of the Public
Procurement Regulation, 2005.
Sinnautic International has not completed
works as per contract; we noted non
installation of removable checkered
plates, hand operated injector testing

machine, echo sounder, Global
Positioning System - GPS device and non
provision of Navigation Charts.
Registration of MV Misungwi with
registration number MZ/P 032 at Mwanza
port in 2008 without having seaworthiness
certificate.

9.4 Ministry of Agriculture, Food Security and
Cooperatives on the National Agricultural
Inputs Voucher Scheme (NAIVS)
The National Agricultural Inputs Voucher
Scheme (NAIVS) was formed in 2008 for
implementation of the Accelerated Food
Security Project (AFSP) by the Government of
the United Republic of Tanzania. The
objective of NAIVS is to contribute to higher
food production and productivity in the
Targeted Areas by improving farmers access
to critical agricultural inputs. The
Government of the United Republic of
Tanzania is implementing the project
through the Ministry of Agriculture, Food
Security and Cooperatives (MAFC) summary
of the findings from the special audit broken
down to three administrative level as explain
below.

9.4.1 Ministry Level
Delays in procurement of the agriculture
input vouchers as a result input vouchers
reaches the beneficiaries after the
rainfall seasons.
Improper storage and inadequate
recordkeeping of agriculture input

vouchers. Hence, there were no record
showing redeemed vouchers at the
Ministry for 2010/2011 and 2011/12 and
stores ledger of unused and returned
vouchers from District do not indicated
serial numbers of the vouchers used.
Lack of adequate information on fertilizer
and seed supply in the country. The
importation and distribution of
Agricultural inputs are in the hands of
Private Sector dealing with agricultural
inputs including seeds and fertilizer
companies.
Lack of operational manual of the system.

9.4.2 Region Level
Lack of adequate records of agriculture
input vouchers at Arusha and Rukwa
Regions.
Delays in distribution of agriculture input
vouchers to the districts at Arusha, Lindi
and Rukwa Regions.

9.4.3 District level
Insufficient records maintained for Agro-
dealers at Karatu, Meru, Karagwe, Lindi
and Mpanda.
Lack of basis for selection of Agro-dealers
at Karatu, Lindi, Nkasi and Mpanda
District.
Poor recordkeeping at Karatu, Chato,
Ruangwa, Meru and Kilosa districts.
Karatu, Meru, Lindi, Ruangwa and Kilosa
districts delays distribution of vouchers to
villages.

Lack of seeds and fertilizers inspection in
accordance with section 5(i) of the
Fertilizer Act, 2009 at Karagwe and
Mpanda districts.
Delays in receipt of agriculture input
vouchers at Ulanga and Nkasi districts.
Fraud allegations on vouchers that were
not delivered to the beneficiaries at
Chato District.
56,121 agriculture input vouchers with
the value of Shs.1,159,834,000 were not
used at the Chato District and were
returned to the Ministry.

9.4.4 Village level
Lack of adequate supervision from the
districts.
At Laghangareri village in Karatu District,
300 out of 900 beneficiaries were not
provided with agriculture input vouchers
in 2010/2011.
The Agro-dealer at Jobaj village in Karatu
District, Eagle Agrovet was handled over
with original agriculture input vouchers
by VEO, which is contrary to the circular
issued by the Ministry.
Beneficiaries at Jobaj in Karatu received
Hybrid seeds 10kg to 12kg only or UREA
only for the years 2010/11 and 2011/12 in
exchange for signed agriculture input
vouchers of fertilizers (UREA and MRP)
this implied that value of agriculture
input vouchers redeemed was not
matching to the value of inputs supplied
to beneficiaries.

People who are not in the approved list of
beneficiaries at Ngaibara, Jobaj and
Kilimamoja in Karatu District and
Nyabishenge and Kaisho village in
Karagwe District receive agriculture
input vouchers and agriculture inputs
without following formal procedures.
Lack of records of beneficiaries at Mawilo
village in Lindi District
Beneficiaries were not financially able to
pay for the top up on agriculture input
vouchers
At Inchankima and Msilale the Village in
Chato district agriculture input vouchers
were being purchased by Agro-dealers for
Shs. 10,000 each in the year 2010/11.
Lack of awareness of the scheme by
farmers/beneficiaries at Karagwe and
Ulanga District.
Fake seeds were distributed to farmers at
mamba village in Mpanda, Kaisho and
Nyabishenge villages in Karagwe and
Idunda village in Ulanga District.
Delays in receipt of agriculture input
vouchers in 2011/12
The Village Agriculture Input Voucher
Committee member at Ntene Village in
Lindi district was appointed by Agro
dealer to be his salesman.
Chinongwe and Litima in Ruangwa did not
receive agriculture input vouchers from
the district.
At Mamba village, there were complains
on the quality of the maize seeds and

fertilizers that they do not yield the
expected outputs.

9.5 Ministry of Health and Social Welfare on
financial impropriety of training fees
at Mkomaindo Nursing Training Centre
During the year 2012/2013, a special audit
was conducted on training fees collection
and its accountability at Mkomaindo Nursing
Training Centre and the following is the
summary of the audit findings:
Non maintenance of cash book for
recording training fees received; hence no
Bank reconciliations were prepared,
contrary to Regulation 162(1) of Public
Finance Regulation, 2001 which states
that the balance of bank account as
shown in the bank statement must be
reconciled with the corresponding cash
book balance at least monthly, the
reconciliation statement being filed or
recorded in the cash book.
Improper maintenance of counter foil
register as the actual dates of receiving
receipt books from Sub Treasury differs
from the dates shown in counter foil
register, (8) receipt books and two (2)
deposit slips were not recorded in the
counter foil register.
Training fees received amounting to
Shs.31,056,000 was neither banked nor
available in the cash office, contrary to
Regulation 60 of Public Finance
Regulation of 2001.

Existence of forged admission letters in
the academic year 2010/2011


CHAPTER TEN

OTHER ISSUES
10.0 INTRODUCTION
In this chapter, I am coming up with other
issues arising from the powers vested in me
under Section 12 of the Public Audit Act,
2008 and its Regulations of 2009. In Reg. 34
of the Public Audit Regulation, 2009 it gives
power to the Controller and Auditor General
to make recommendations to the
Government for any matter that CAG
consider to be better for the management of
Public monies, Stores, Securities Stamps and
other Properties issues. In this chapter I have
exercised my power and make
recommendations on matters concerning:
1. Operations of Government Executive
Agencies,
2. Government renting office building
space,
3. Issues relating to Management of Prison
Service Department,
4. Role of CAG in auditing PPP Projects and
5. Issues raised on Auditing of Political
parties.

10.1.0 Government Agency Appraisal
Executive Agencies are semi-independent
public institutions that are designed to
operate at a arms length from their parent
Ministries. Prior to their formation, Agencies
existed as departments under Ministries but
government decided to create them under
ambit of parent ministries for the aim of,

among others to (a) Improve delivery of
public service (b) improve quality of
delivered service and (c) to promote
continuous improvement of service.
To achieve the cited objective above,
government gave agencies greater autonomy,
like hiring from outside the public service
and they can retaining the revenues they
generate. All these incentives were mainly
given so as to motivate workers of the
agencies to work harder, professionally, and
with higher integrity in order to achieve the
goals of providing public services in a more
efficient and effective manner.

If you compare performances of agencies and
departments, you can clearly see that:
I. The level of service delivered has
been improved by existence of
agencies compared to the time they
operated as government Ministry
departments.
II. Quality of service provided to public
has also increased, most of the
agencies are providing improved
services compared to the services that
they were providing as department
under ministries.
III. Compared to departments, revenue
collection has improved under the set-
up of agencies.
IV. Administration expenses on operations
of agencies have increased compared
to the administration expenses during
the set-up of Ministerial department.

Despite of the above comparison between
agencies and departments, over the period of
time agencies have been facing several
challenges which need government's
intervention to sort them out. The following
are some of challenges which crosscut the
majority of agencies.

10.1.1 Financial dependence from government
Most of the agencies still depend on subsidies
from the Government against the spirit of
their establishment. Agencies were
established with the views of having financial
dependence as stated in Sect. 12 of the
Executive Agency Act (Cap.245 Revised
Edition 2009). In this section, it is stated
clearly that funds of agencies consists of
money gained from provision of goods and
services, charge of fees or commission that
will enable agency to meet their
expenditures. But it has been revealed that
most of the agencies are to a large extent
still dependent on government funding to
cover their operating expenses like Personal
emoluments and some of their development
activities. This imposes a great risk on
viability and sustainability of their services
due to this dependence and also overburden
the government in funding this agencies.

10.1.2 Insufficient funds to finance agencies
Most of the agencies are financed by the
Government of Tanzania and few by external
donors. There is shortage of funds to finance

agencies budgets. Despite the fact that
agencies were initially established for the
aim of providing improved services to the
public using their own funds obtained from
charge of fees, commissions, proceedings
from sales of goods or services, these
agencies are still being financed by the
government. It has been revealed that the
funding of agencies is highly below their
budget. The table 57 below shows a sample
of agencies that have received funds below
the approved budget for the year 2012/2013.

Table 56: Insufficiency in government funding of
agencies
Name of Agency Budget (Shs)
Actual Release
(Shs)
Under release
(Shs)
%age
REA 139,608,473,000 43,832,473,000 95,776,000,000 69%
Agriculture Seed
Agency
3,905,348,918 688,472,050 3,216,876,868 82%
TEMESA 16,517,804,783 5,212,086,776 11,305,718,007 68%
TBA 7,854,766,677 2,500,848,001 5,353,918,676 68%

Source: Individual Management letters

From the table above we can see clearly that
there is an acute shortage of funds from
government to the agencies. Also, this to a
great extent affects achievement of
expected Agency's goals. It is very difficult
for a government to provide quality service if
funds are under released. In order to achieve
the main goal of establishing the executive
agencies of providing sufficient and quality
services, it is important for the government
to release funds as budgeted. Since
government funding is seen as a major
constraint, the Government should for the

time being curtain the further formation of
additional Agencies.

10.1.3 Delay on release of funds from
Government
Despite there being shortage of government
funding of Agencies, also release of funds has
been significantly delayed. Funds not
released on time have great effect on the
achievement of Agency's targeted objectives.
For a service to be of quality, it has to be
efficient and hence has to be on time. If you
cannot release funds on time then there in
no way you can get quality and timely
service. Agencies have been receiving funds
not in accordance with their action plan
requirements and this is affecting the
implementation of their intended objectives.

10.1.4 Insufficient number of staff and working
tools
There is insufficient number of staff and
working facilities. Agencies were established
for the purposes of improving quality of
public services. Quality of services goes hand
and hand with a sufficient work force and
other necessary working tools like motor
vehicles. It is difficult to provide quality
service if you dont have right caliber of staff
and working tools. If Agencies are meant to
provide quality and timely service it is very
important for them to have the appropriate
number of qualified staff as well as necessary
working tools.


10.1.5 Under collection of own source revenue
Sect 12 (2) (a) of the Executive Agency Act
(Cap .245 Revised Edition 2009) states that
agencies shall perform their functions in
accordance with modern commercial
principles and shall ensure that, as far as
possible, their revenue are sufficient to meet
their expenditure properly chargeable to
revenue. During this year's audit it has been
noted that, some of the Agencies have being
collecting revenue below their approved
budgets. This makes it difficult for the
Agencies to meet their own expenditure and
settle their own liability without depending
on funds from the government. See table 58
below which shows Agencies under collection
of revenue.

Table 57: Under collection of own source revenue
Name Agency Budget (Shs)
Actual Collection
(Shs)
Under collection
(Shs)
%age
of
under
Agriculture Seed
Agency
4,031,144,000 3,243,186,175 787,957,825 20%
TEMESA 27,922,064,400 22,732,726,218 5,189,338,182 19%
Tanzania forest
services (TFS) agency
74,628,558,879 62,668,602,055 11,959,956,823 16%

Source: Individual Management letters

One of the roles of the Agencies is to provide
quality services to the public and get
revenues from the quality services that they
are providing. It simply implies that revenue
collected should go hand in hand with the
service that Agencies are providing. For
Agencies to be financially independent they

should be able to provide quality service to
the public that will enable them to get
enough revenue to settle their liabilities as
the satisfied public would be willing and
able to pay for the service enjoyed.

10.1.6 Recommendation
From the challenges that I have explained
above, I recommend the following to the
government and to the executive agencies.
All executive agencies which were
established with the aim of providing
service to the public and gain revenue
from their service, it is time for them to
compete in the commercial world by
being more innovative and increasing the
quality and level of service. This will
improve their revenue collections and will
minimize their independence from the
central government in funding matter.

Agencies which were established with
the aim of taking service to a large
number of customers should maximize on
taking advantage of the big customer
base to maximize their revenue collection
potentials.

In order to provide quality service it is
important to have qualified staff and
working tools. Parent Ministries in
collaboration with the Public Service
Commission have to make sure that their
agencies are well equipped with
competent staff and necessary working

tools that will enable them to increase
the level of service and to improve their
service delivery to the public.

Due to the current serious government
fund constraint of the agencies the
government should for the time being
stop creating additional agencies until
when the government financial position
improves.

10.2.0 Payment of Rent Charges by MDAs
Shs.7,895,872,337
Government of Tanzania has 59 MDAs, audit
of MDAs in this financial year revealed that
there are some MDAs which do not have their
own office buildings. These MDAs have been
renting various buildings and pay a lot of
money for rent office accommodation. Audit
examination of MDAs on sample basis,
revealed that nine (9) MDAs in the financial
year 2012/2013 paid a total of Shs.
7,895,872,337 as rent charges per year. The
analysis shows that some of these buildings
belong to private companies. Table 59 below
shows the amount paid as rent by each MDAs.


Table 58: Payment of Rent Charges by MDAs
Vote No. Name of MDAs Amount (Shs.)
Ministry Of Information, Youth, Culture and
Sports
1,038,809,034
Department of Information Service 216,000,000
Ministry of Works 482,219,184
TANROADS 1,432,616,640
Road Fund Board 531,300,000
10 Joint Finance Commission 159,264,127
61 National Electoral Commission 937,200,000
35 Directorate of Public Prosecutions 654,506,859
43 Modern Farmer -Ministry of Agriculture 81,120,000
NIDA 1,423,142,893
97 Ministry of East African Cooperation 435,585,600
12 Judicial Service Commission 129,708,000
40 Labour Court 116,400,000
40 Land court 258,000,000
7,895,872,337
96
98
Total

Source: Individual Financial statement

The above analysis shows that for this
financial year in the sampled 9 MDAs only,
Government has been paying a huge sum of
money for office accommodation. If
Government could have its own buildings to
accommodate its ministries and agencies, the
mentioned amount could have been allocated
elsewhere in important development
activities. Accommodating government
ministries/departments in buildings of other
owner/landlords imposes a great financial
burden to Government in terms of rental
charges. Rents in real world market tends to
raise every time depending on demand which
is also increasing with time, so it is expected
that the government will continue to pay
high rental charges to accommodate its
ministries and departments.

As a government it is very important to
invest on its own office buildings. I do advice
the government to build its own office
buildings to accommodate ministries,
departments and its agencies. Government
can do the following to implement this:
Government through the Ministry of Land
and TBA to find areas for Ministries
buildings of all ministries that do not
have their own buildings.
Government to make arrangements with
social security funds to secure loans for
construction of these office buildings.
Government can also make arrangement
with development partners like Africa
Development Bank, World Bank, etc to
get loans/grants for the construction of
its office buildings.
The spirit of constructing government
buildings should be extended to our
Embassies/Missions where it is very
costly to rent offices or staff houses.

10.3 Challenges facing Tanzania Prison Service
(TPS)
Prison Department is one of the important
department which deals with lives of many
Tanzania Citizens. Normally, Prisons have
three basic functions firstly, is to secure and
control offenders, secondly is to punish
offenders and thirdly is to rehabilitate or
reform offenders. Currently there are 122
institutions (Prisons) including male prisons,
female prisons and Youth Prisons. All 122

prisons are responsible for the custody and
care of more than 45,000 prisoners while the
accommodation capacity is 22,669. This
implies that the prison facilities are
overcrowded by more than 100% and this
makes it very difficult to control and monitor
prisoners in congested prisons.
I conducted a visit in some of the prisons and
I observed that a lot of issues that I now
recommend to Government to take necessary
steps to rescue the current situation found in
many of our prisons in Tanzania. The
followings are some of my recommendations
to the government for the plight of our
prisoners.

10.3.1 Limited budget
It is true that a lot of departments have
problems in financial resources; most of
institutions operate under deficit. But prisons
and other institutions which deal with lives
of people directly like Hospitals etc need
special treatment when it comes to the
government budget ceiling. Prisons need to
feed prisoners, to dress them and to take
care of their health. Not only prisoners this
institution also needs to buy uniforms to its
officers, to pay for leave allowance, moving
allowance and many more.

In the financial year 2012/2013 TPS budgeted
to spend Shs. 131.5 Bil on Other charges and
Shs. 51.6 Bil for development activities. Due
to budget deficit TPS was given budget
ceiling of Shs. 51.4 Bil for other charges and

Shs. 1.3 Bil for development. Taking few
items as example of items that were highly
affected by budget cut down are prisoners
clothes, prisoners food and staff uniform.
See table 60 below.

Table 59: Limited budget
Item
Actual
Requirements (Shs)
Approved
Budget (Shs)-
Variance %
A B C= (B)-(A)
Prisoners food 32,400,320,000 8,000,001,000 -24,400,319,000 75%
Prisoners
Clothes
1,583,198,200 500,000,000 -1,083,198,200 68%
Staff Uniforms 3,707,888,000 350,000,000 -3,357,888,000 91%

Source: Budget book and Budget Proposal from management

From the above table it shows that the three
items were highly affected. The actual
requirements were not met even by half of
the requirement. The picture we are getting
here is that prisoners might not be getting
required ration of food, staffs are not getting
uniforms as required and hence this makes
their working environment not conducive and
also it shows that prisoners do not have the
required pairs of clothes let alone assurance
of their medical care in case of sickness.

10.3.2 Under release of funds
Despite the fact that the budget ceiling that
was given to Tanzania Prison Service was
almost half of the requirement, yet the
approved budget of this institution was not
financed as it was approved. In this year
there was under release of Shs.
23,683,463,320 on recurrent expenditure
which is equivalent to 16% of the budget and

for development under release was
Shs.525,485,285 equivalent to 34% of the
budget. Analysis of budget against actual
release is as in table 61 below:

Table 60: Under release of funds
Item
Approved
Budget (Shs)
Actual release
(Shs)
Variance %
Recurrent budget 143,414,319,789 119,730,856,469 -23,683,463,320 -16%
Development budget 1,535,655,285 1,010,170,000 -525,485,285 -34%

Source: financial statement of Prison Service

The above table shows that it is very
challenging for this institution to serve more
than 45,000 prisons and its officers and this
will automatically affect issues of uniforms
to officers and prisons, staff leaves, moving
expenses and in large extent will affect
settlement of liabilities from suppliers.

10.3.3 Increase of liabilities from suppliers and
staff claims
To provide for food, uniforms officers,
medicine and medical treatment to prisoners
you need to have good relationship with
suppliers. From year 2009/2010 up to
2012/2013 TPS has failed to pay a total
liability of Shs.46,559,702,987 made up of
maintenance costs, uniforms, utilities and
other supplies of goods and services from
various suppliers. See table 62 below to see
the composition of this liability.


Table 61: TPS increase of liabilities from suppliers and staff
claims to 30th June 2013
Item Amount (Shs.) %
Supplies of Goods and Service 25,997,391,544 56%
Staff claims 16,010,580,484 34%
Utilities 4,540,930,958 10%
Total 46,559,702,987

Source: Financial Statement of Prison Service

56% of the liability comes from the suppliers
of TPS. This indicates that TPS has
unfavorable credit worthiness at any time
litigation may be imposed against them by
suppliers.

10.3.4 Poor Infrastructures and congestions in
Prisons
Most of existing prisons were built over 50
years ago, infrastructure of these prisons
(e.g. sewage systems) was meant to
accommodate a certain number of prisoners.
As I stated above, now prisons have more
that 45,000 prisoners while actual
infrastructures are capable of
accommodating only about 22,669 prisoners.
To accommodate this number of Prisoners,
TPS need about 156 prisons and not 122
which is the existing number of prisons in the
country to date. This means that there is a
need to find facilities that will be able to
accommodate more inmates to avoid the
extremely over crowded situation which
could have health and social consequences.


10.3.5 Recommendation on the existing situation
of our Prison
From above challenges facing prisons in
Tanzania I recommend the following to the
government and to the Prison Service
Department itself.

On Number of Inmates to be high in Prisons
The Judicial system of Tanzania will have
to speed up the ruling of pending cases.
There is a large number of inmates in
prisons whom are waiting for their case to
he heard and justice to be given by courts
of law by speeding concluding cases
facing inmates will help to reduce the
number of inmates in prisons.
Government has to opt to use other
methods of punishing inmates after being
found guilty. Government can choose to
use alternative methods of punishments
like extra mural labour, community
service and parole. This will significantly
reduce the number of inmates and
prisoners in prisons.
For minor offenders and defaulters it is
better to use fines and if they fail to pay
the fine, they should be handled to their
township leadership, or district and given
communal based labour.

Issues of limited budget
Maintaining inmates and prisoners
imposes a great cost to the government.
To feed, dress and medical treatment to
inmates is a very expensive undertaking

on the part of the government. The
management of prison Service is advised
to improve quality of their productive
activities like carpentry, agricultural
activities, tailoring, construction of
houses and mechanics. The Prison Service
Department should comment its Prison
Cooperation Sole to a strong and viable
economic way of the department which
through the use of available labour in
prisoners would be very profitably.
Prison Service is encourage to write up
several development proposals and find
various donors like Africa Development
Bank (ADB), USAID, etc that will be willing
and ready to finance their proposal of
expanding and improving the prisons.
Management of Prison Service Department
is advised to call for a visit to members of
PAC and other leaders of Government to
visit Prisons and see the actual situations
in the prisons. This will help them to
make informed decisions concerning
resources allocations to the vital organ of
the state.

10.4 The role of Controller and Auditor General
in Auditing PPP projects
Public Private Partnership (PPP)
arrangements are innovative methods used
by the public sector to partner with private
sector companies that bring capital and their
ability to deliver public projects on time,
while the public sector retains the
responsibility to provide these services to the

public in a way that benefits the public.
Realizing the need to partner and create
synergies between public sector and private
sectors, the Government came up with the
National Public-Private Partnership (PPP)
policy in November, 2009 and enacted a PPP
Act No. 18 of 2010. However, to a greater
extent the role of CAG with regards to
auditing PPP projects has been limited; and
that poses a lot of risks to public resources
that might have been otherwise might
mitigated had the CAG been involved.

10.4.1 Addressing risks in PPP arrangements
PPP Act is among the key laws that was
enacted to embark Tanzania into various
reforms that are aimed at transforming the
economy from Public Owned Central Planned
Economy into Private Sector Owned Market
Driven Economy. PPP has to a greater extent
overcome the government capital budget
constraints , where the public and private
sectors can work together to get better value
for money for the taxpayer in delivering
public services through profit gain to the
private sector and efficient service delivery
to the public sector.
Key development projects such as the
construction of a blood bank in the lake zone
at Bugando Medical Centre in the health
sector, Songas in the energy industry, and
Mlimani City Complex Mall in the social-
economic sector are some of the few
examples which have been executed through

PPP. The partnership has supplemented
limited public sector capacities to meet the
growing demand for infrastructure
development, extracting long-term value-for-
money through appropriate risk transfer to
the private sector over the life of the project
from design/ construction to operations/
maintenance etc.
Despite the benefits that may be derived
from PPP arrangements, there are some
risks associated with PPPs of which
government intervention is of vital
importance. PPPs can drive up costs, under-
deliver services, harm the public interest,
and introduce new opportunities for fraud,
collusion, and corruption.
To address these risks, the International
Standards of Supreme Audit Institutions ISSAI
5220 and ISSAI5240 provide guidance on how
Supreme Audit Institutions should be involved
in the review of the process involving Public
Private Partnership. It is my desire to
recommend to the government to ensure
strong measures are taken to reduce the
extent of risks which can be borne by the
government through these agreements.
Among the risks PPPs can pose include;
Poor decision-making processes may
result in the wrong partner being
selected, or an inappropriate partnership
vehicle being used for the project. In
some cases private partners are single

sourced without using competitive bidding
process thus limiting the advantage of the
government from enjoying the best
economical prices.

The government should design thorough
procurement and appraisal processes which
assesses the dependability and probity of
potential partners. Such appraisal should
focus on choosing a viable partner with
proven track record in project development
through a competitive bidding process.

The unavailability of state financed
feasibility studies could become a costly
arrangement to both parties. Key projects
development are managed through solid
feasibility studies whereas the required
costs and value to be attained are
analyzed and projected. However, lack of
facilitation fund and awareness hinders a
realistic means to determine the cost
benefit analysis pertaining to a particular
project.

Recognizing the importance of feasibility
studies so that interests of both parties are
served and optimal achievement is attained,
the government should create a PPP
Facilitation Fund to finance feasibility
studies on key projects implementation. In
addition, the government is urged to launch
a full scale sensitization program in order to
fully engage the private sectors to
identifiable national priority projects. The

continuous absence of state financed
feasibility studies could become a very costly
affair.

There are instances where a private
partner determines the amount of profit
to be shared from unanticipated
utilization of assets, or capitalizing costs
which are not allowable in the contract.

The government should ensure that issues of
profit sharing (including possible future gains
from property sales or refinancing) are
addressed as clearly as possible in the
partnership agreement. It should also ensure
that the states interests are protected if
contributed assets are disposed off by the
partnership (e.g. guaranteeing the state a
share of the proceeds). The government
should also be able to verify the total costs
being capitalized in the project which are
subject for recovery during the lifetime of
the project.

Under the current arrangement, there is a
possibility of the government to lose
control of its assets. The government or
public entity may agree to transfer some
of its assets to the ownership of the
private partner, as it is the case with
Tanzania Broadcasting Corporation (TBC)
and StarMedia Tanzania Ltd. It is
worthwhile to note that once assets have
been transferred to the private sector,

the public sector is likely to lose
ownership over them.

It is advised that the government should
consider whether assets of national
importance can be leased to the private
sector rather than transferred outright. The
partnership agreement could give the public
sector step-in rights in the event of a
major failure in the delivery of services or
the bankruptcy of the partner.

Project development, bidding and ongoing
costs in PPP projects are likely to be
greater than in traditional government
procurement processes. In most PPPs
there is a risk of costs attached to debt
given the fact that private sector can
efficiently accesses funds and use the
financed funds effectively in order to
maximize their investment (portfolio)
returns. The guarantees and indemnities
given to the private sector partner may
not be fully priced into the agreement
which may lead to the state losing the
value of its investment.

The government should therefore determine
whether the greater costs and risks involved
are justifiable. Careful and thoughtful
analysis should be tailored to address
appropriate allocation of project risks
between the public and private sector
parties affected by the project. In all the
PPP arrangements, the public entity should

look for the optimum transfer of risks by
ensuring that the individual risks are
allocated to those best placed to manage
them.

Given the long-term nature of the PPP
Projects and the complexity associated to
them, it is difficult to identify all possible
contingencies during project development
and events or issues may arise that were
not anticipated by the parties at the time
of the contract. It is more likely that the
parties will need to renegotiate the
contract to accommodate these
contingencies.

The government should be keen in
contract design and negotiation in order to
ensure that any risk resulting from
unforeseeable events are fairly shared
between the two parties and according to
the predetermined and agreed sharing risk
levels.

Public sector partner may be prevented
from obtaining sufficient information
about the partners performance because
the partnerships articles of association or
general legislation may not allow
information to be provided to one partner
on demand that is not supplied to all
partners.

The government should ensure that the
articles of association allow for

performance information to be supplied,
on demand, to the public sector partner.
Where the government is acting as a
lender or guarantor it should request
additional information from the
partnership in order to ensure the
security of its loan.

There are instances where the
partnership may become bankrupt or the
government may wish to withdraw from
the agreement. If the government has not
identified such scenarios before entering
into the agreement, there is a danger
that the government could find itself
unable to exit except at highly punitive
costs.

In its risk analysis before entering the
partnership, the government should
carefully consider these possibilities and
make provision for them - either in the
terms of the agreement (e.g. the power
to withdraw in the event of poor
performance without unreasonable
financial loss) or by way of contingency
planning (e.g. share disposal).

In the event the government/public entity
makes large contractual payments up
front, it may be effectively financing the
private partner. If a large percentage of
the contract price is paid initially, the
private partner may have less incentive to
deliver quickly or to a high standard. The

government could also lose its limited
resources if there is a change of situation
on the ground.

The government should link contractual
payments to the achievement of the
agreed milestones and the standard of
services delivered.

The Public Private Partnership Act does
not provide for CAGs access to all PPP
records and information. The Act does not
state whether the private partners are
supposed to keep proper books of
accounts and records in relation to the
project and whether the books should be
open for scrutiny by the contracting
authority or government. The Act does
not require the private partner to submit
duly audited financial accounts and any
other information as could reasonably be
required by the contracting authority.

The Act should ensure that all PPP
contracts and Production Sharing
Agreements (PSAs) provide for the
Controller and Auditor General to have
access to financial records and other
information of the private partner or
company in all the PPP arrangements.
In addition, the government should avail
and provide to CAG all the relevant PPP
information throughout the project life
from the tendering phase, contract

awards and the operational phase.
Guideline 3 of ISSAI 5220 provides that,
examining a project by a Supreme Audit
Institution throughout these stages has
the advantage that any weaknesses
identified can be corrected before the
contract is signed and so more serious
difficulties avoided at later stages.

The government should also provide
regular information on project
performance clearly showing whether the
private partner is meeting its obligations
to the public sector partner so that any
risk of loss is identified as early as
possible, enabling the government/public
sector partner to consider how best to
protect its interests.

10.5 Common issues emerging from the ongoing
audit of Political Parties accounts
For the first time, the CAG has started the
implementation of the audit of Political
Parties in the country which is in accordance
with the requirement of section 14 (1) of the
Political Parties Act No.5 of 1992. The
exercise is still going on as we prepare this
general report, hence this brief report is on
what has been observed generally so far.

On completion of the whole audit exercise, I
will be in a position of giving a more detailed
report on the audit of political parties in the
country with a view of advising the Registrar
of Political Parties on how best to regulate

these parties and ensure the existence of
accountability and transparency in the
management of the funds entrusted to them.

In the audit of nine (9) Political Parties
currently being conducted, we have observed
the following:

a) The submitted financial statements have
differing accounting basis and financial
reporting frameworks. The format and
accounting period of the Political Parties
are different and do not disclose
pertinent information about the basis of
preparation of the financial statements
and also accounting policies and notes to
the financial statements were missing
hence limiting the audit scope.
b) Financial Reporting framework for four
(4) political parties could not be
established because the submitted
financial statements were only a list of
receipts and payments and the
statements did not contain general party
information and notes to the financial
statements. A sound accounting
framework is an important ingredient for
promoting accountability and
transparency in reporting on the
stewardship of the resources entrusted to
the political party.
c) Eleven (11) out of twenty one (21)
Political Parties with permanent
registration did not submit their annual
financial statements as required by

Section 14 (1) (i) of the Political Parties
Act No.5 of 1992.
d) Seven (7) out of the nine (9) audited
Political Parties do not maintain proper
books of accounts of the funds and
property of the party as required by
Section 14 (1) of the Political Parties Act
No.5 of 1992. Instead the Political Parties
do record receipts and payments only.
e) Four (4) out of nine (9) audited Political
Parties do not maintain bank accounts as
required by Section 15 (1) of the Political
Parties Act No.5 of 1992.
f) Our review noted that no political party
has so far submitted to the Registrar of
political Parties annual declaration of all
property owned by the Party as required
by Section 14 (b) (ii) of the Political
Parties Act No.5 of 1992.The law lacks the
required date for submission of such
declaration.

10.5.1 Recommendation
To enhance disclosure, presentation and
comparability of Political Parties
performance, parties should prepare their
financial statements in accordance with
International Accounting Standards. The
adoption of common reporting framework of
accounting will also lead to consistency and
uniformity of recording transactions and
preparation of the financial statements of
the political parties. This is where the
Registrar of Political Parties in conjunction
with the Accountant General should come in

giving guidance on the type of reporting
framework to be adopted and format of
financial statements to be prepared by the
Political Parties.

10.5.2 Challenges
By virtual of section 14 (1) (i) of the Political
Parties Act No.5 of 1992 it requires me to
audit political parties. However, during audit
I encountered challenges in auditing non
public funds collected by political parties.
According to the constitutional obligation
under article 143(2)(c) of the constitution of
the United Republic of Tanzania, I am
required to audit public funds and resources.
Under the circumstances it is not so clear as
to whether it is justified for me to audit the
non public funds of the Political Parties.

Section 14(1)(i) of The Political Parties Act
No. 5 1992 requires political parties to
submit to me audited financial statements on
30 October each irrespective of which is the
end of the financial year of the party. The
Act assumed that all political parties will
have a common year end and which is not
the case so far, while the Public Audit Act of
2008 requires the accounting officers to
submit to me financial statements for audit
purpose three months after closure of
accounts that is 30 September each year

I recommend to the government to revise the
Political Parties Act No. 5 1992 (amended
2009) in order to resolve the challenges

CHAPTER ELEVEN

11.0 CONCLUSION AND RECOMMENDATIONS
The detailed audit findings in this General
Report were communicated to the respective
Accounting Officers for action. The
Accounting Officers and Sub-Accounting
Officers of MDAs, Embassies and RS are
required to prepare responses on the CAGs
audit findings and recommendations and
submit them to the Paymaster General as per
requirement of the Public Audit Act No.11 of
2008.
In this report, I have pointed out several
weaknesses in internal control systems which
have resulted in financial mismanagement.
These matters call for immediate
intervention from the Accounting Officers by
establishing sound internal control systems
that will prevent future recurrence of the
same deficiencies. In order to effectively
address the weaknesses pointed out in this
report, I have made several
recommendations which, if implemented will
enhance sound financial management within
the Government.
After presenting the salient features from
audit findings for the year 2012/2013 for the
MDAs, Embassies and RS in preceding
chapters, I am now in a position of coming up
with the following general conclusions and
recommendations, which if implemented will
enhance sound financial management on
operations of the Central Government as
stipulated hereunder:

11.1 Non implementation of some of the
previous years recommendations
I noted responses from the Government
through the Paymaster General and the
Accounting Officers. However, some of the
recommendations issued in the previous
years General Report of Central Government
and the Individual reports issued to
Accounting Officers were not responded to.
In this years audit, 77 MDAs/RS had previous
years outstanding issues amounted
Shs.636,849,749,109 with the Ministry of
Works having the largest share of
Shs.253,777,000,000 followed by the Ministry
of Finance (Vote 50) having
Shs.244,919,408,265 while Treasury (Vote 21)
is the third in the ranking having
Shs.72,668,447,899.
As earlier pointed out, Inadequate follow up
in ensuring that previous years
recommendations are implemented could
lead to recurrence of the same anomalies in
the subsequent years.

Recommendation
The government should put more efforts to
ensure that the recommendations are
attended to accordingly. The Paymaster
General should instruct Accounting Officers
to take necessary measures to improve
documentation and records keeping , which
is one of the main causes that contribute to
missing documents and therefore failure to
reply to some of the raised audit issues.

Accounting Officers coming up with clear
documented action plan is another option
which needs to be taken on board. The
action plan will be specific for issues which
cannot be done within a reasonable short
period of time.
Insistence of having a register of audit
recommendations to be kept by every
Accounting Officer is another important
mechanism. A register is a good tool to
record and track outstanding audit issues not
attended to including the progress attained
so far in the implementation of this
recommendation.

11.2 Procurement Management
Compliance with Public Procurement Act and
its regulations is of paramount importance in
getting the best value for money out of
public funds. My office together with PPRA,
have been advising Government through the
Accounting Officers on the best ways of
conducting procurement activities. PPRA
have been issuing various circulars to
MDAs/RS on how to improve compliance of
Procurement Act and its Regulations. In this
years audit there is recurrence of some
matters that were recommended in last
years reports. The recurring weaknesses
include and not limited to Procurements
made without being in the annual
procurement plan, procurements without
competition, assets procured but not in
operations, payments made above
Invoice/Contractual amount, procurements

without approval of Tender Board and
procurements using Imprests.
Taking into consideration that Procurements
takes a huge part of Government spending,
and the fact that there is inadequate
supervision in procurement transactions and
existence of non compliance with the
procurement law and its regulation inevitably
such situation will lead to the government
suffering huge losses.

Recommendation
As earlier pointed out, Procurement takes a
huge part of Government resources in order
to implement its planned activities. Hence,
the government has to improve compliance
with the Procurement Act and its Regulations
to avoid repetition of anomalies noted. The
following need to be taken into consideration
in order to improve compliance;
Government through PPRA has to conduct
several seminars with the aim of building
capacity of PMUs, Tender Boards,
Accounting Officers and User Departments
on the importance of complying with the
Public Procurement Act and its
Regulations.
It is also important to have a
Computerized Procurement Information
Management Systems (PIMS) in effective
operation. This system is hosted by PPRA.
PPRA has to make sure that this system is
user friendly to end users so that MDAs/RS
can easily use this system to improve
procurement activities.

Government should see the need of
establish of the procurement and contract
management committees in MDAs to
oversee the procurements and contracts
undertaken by the government the
committee should have legal power to
review and resend Tender Board decision
where it can be establish that such action
with the result into major servings to the
government.

11.3 Unattended Shortage of Workforce in MDAs
and RS
Human resource is a significant factor for
effective performance of any organization,
this includes efficient delivery of services to
the intended community. During the audit of
2012/13 I noted a huge shortage of staff as
compared to the approved establishment
levels within MDAs. For the sample of 28
MDAs & RSs tested, I noted a shortage of
12,646 staff equivalents to 57% of the
establishment level of 22,159 staff.

I am concerned with this huge shortage of
staff which could imply either the approved
establishment is incorrect or there is serious
shortage of staff in all the MDAs which
inevitably will affect service delivery.

Recommendation
The noted shortage of 12,646 staff
equivalent to 57% of the establishment level
of 22,159 staff in a selected sample of 28
MDAs & RSs tested is so huge that inevitably

will seriously affect the service delivery of an
entity. The PO-PSM should revisit the
establishment levels of MDA and RS and come
up with the ideal required level.

Accounting officers of MDAs and RS should
work hard to ensure that they are equipped
with sufficient and qualified number of staff
and they should plan for staff incentive and
retention policy and by having workable
training programme. Shortage of staff should
be communicated to respective authority
including PO-PSM.

11.4 Salaries Paid to non Exiting Employees
I have noted the Governments efforts
through the PO PSM and the Ministry of
Finance to solve the existing challenge of
paying salaries to non-exiting employees. The
efforts noted include and not limited to
carrying out the exercise of verification of
existing employees and investing in Human
Capital Management Information System
(LAWSON).
Inspite of the Government efforts in this
regard, I have once again observed this year
the existence of salaries being paid to non-
existing employees amounting to
Shs.779,329,181 which was paid to non-
existing employees in 11 sampled MDAs and
RSs.
This observation demonstrates that the
challenge of paying ghost workers is still in
existence.


Recommendation
To avoid such losses in future, Accounting
Officers of the respective MDAs/RS should
check their payrolls periodically to confirm
validity of all entries. Communication should
also be enhanced to ensure that names of
retirees, absconders or terminated
employees are deleted from payrolls once
they cease to be in employment. Apart from
that, Accounting Officers should ensure
unclaimed salaries in respect of employees
who are no longer in public service for one
reason or another are surrendered timely to
Treasury as per given instructions. Further,
Accounting Officers should ensure that the
Human Capital Management Information
System (LAWSON) is fully utilized in order to
obtain the anticipated value for money on its
investments.

11.5 Expenditure Management
Establishment of sound Internal Control
systems is one of the management
responsibilities. I have been addressing the
same in my reports every year. Some of the
MDA/RS have been able to implement my
recommendations and have improved their
operations remarkably but always there are
those who lag behind. Because of existence of
weak internal controls systems, I have again
noted various weaknesses in expenditure
management. This includes Shs.14,498,110,431
which was made without proper supporting
documents as noted in a sample of 29
MDAs/RSs; expenditure made out of approved

budget Shs.15,785,285,943 noted in 29 MDAs
and RSs and missing payment Vouchers
Shs.70,195,394 noted in three MDAs/RSs; Other
observations and the MDAs/RS involved in
brackets are- Long outstanding imprests
Shs.319,423,337 (9 MDAs/RSs); Payments
charged to wrong Account codes
Shs.2,394,834,855 (25 MDAs/RSs);
Overpayment Shs.68,089,906 (5 MDAs/RS);
Missing acknowledgement receipts and EFD
receipts-Shs.47,935,509,285 (13 MDAs/RSs);
Payments lacking accountability
Shs.3,288,257,291 (6 MDAs/RSs); Nugatory
expenditure Shs.687,169,796 (10 MDAs/RSs);
The funds used for unintended activities-
Shs.1,770,390,504 (17 MDAs/RSs); Payments of
previous years liabilities using the funds
appropriated for 2012/2013 Shs.371,879,693 (9
MDAs/RS).

As pointed out above, I observed a number of
anomalies that could otherwise have been
resolved had my earlier recommendations
being taken on board. Issues like payments
charged to wrong account codes, expenditures
made out of the approved budget, improperly
vouched expenditures, missing payment
vouchers and nugatory/fruitless expenditures
have continued to recur regardless of the
recommendations given to resolve the issues.

Recommendation
This is one of the areas noted during my audit
which accommodates a number of challenges.
Mostly, these challenges are caused by not

having adequate Internal Controls, and where
the controls do exist they are not being
correctly supervised and/or overridden by the
entrusted officers.

Accounting Officers of MDAs/RS should ensure
that all payments are authenticated by proper
authorities and proper supporting documents
in line with the requirements of Regulation
95(4) of the Public Finance Regulations of
2001. Internal checks need to be strengthened
including strengthening the pre-audit
functions.

11.6 Operation of Embassies
Embassies and High Commissions operate
as Independent Sub-votes under the
International Cooperation. I managed to
audit 32 of these Offices and noted the
following challenges; About 16
27

Embassies/Missions out of the 32 audited
made payments above the approved
amounting to Shs.6,227,749,594; Payment
of salaries to retired officers amounting to
Shs.575,473,328 involving 3
28
embassies;
Some of the home based staff have
overstayed contrary to conditions given in
their appointment letters which
specifically states that home based staff
shall have the maximum stay of four (4)

27
Refer annexure 2 (under expenditure management)
28
Tanzania High Commission in Abuja-Sh. 157,814,844;
Embassy of Tanzania in Paris Sh. 289,666,694; Tanzania High
Commission-Kampala Sh. 127,991,790

years in the work station abroad; Another
challenge is lack funds for carrying out
diplomacy duties especially in the
economy sector in the countries the
Embassies/Missions are representing.

From the summary of findings above, it
shows that non compliance with approved
budgetary provisions for most of
Embassies/Missions is alarming and
responsible management should strengthen
budgetary controls at the same time insuring
that prepared budgets are realistic. Also, we
call for working on the rest of the issues as
addressed in the individual management
letters issued to each Ambassador of High
Commissioner in their capacity as Sub-Votes
holders.

Recommendation
A separate study is ongoing in this area.
However, basing on what was noted during
audit; I have the following general
recommendations:
The respective Embassies/High
Commissions, in collaboration with MFAIC
should cease payment of Foreign Service
allowances to retired officers and make
early arrangements for immediate
transfers of the ex-officers to their places
of domicile.
Embassies/High Commissions
management should communicate with
the MFAIC for the need of replacement of
home based staff who have overstayed in

one station. This will have positive effects
in the services delivery of the respective
embassies/missions.
MFAIC management should consider a
possibility of setting aside funds in its
budget for carrying out economic
diplomacy and promote tourism
attraction, taking into consideration
that this is an important task to the
Countrys economy.

11.7 Operations of Designated Hospitals
There were various challenges noted in the
audit of Designated Health facilities. These
challenges included salaries of
Shs.754,992,183 paid to retirees, absentees
and ineligible officers through personal Bank
Accounts; Unclaimed salaries amounting to
Shs.3,047,574,792 were utilized by various
hospitals to pay salaries of staff who were not
yet enrolled in the Government payrolls and
to cater for other hospitals activities; Non
maintenance of separate accounts for grants
received from MoHSW with other hospital
receipts.

The noted challenges require serious
interventions by the MoHSW to see the
deficiencies are rectified and do not recur.

Recommendation
After auditing two items of Payrolls and
Disbursement of funds for other charges
(Grants) to the respective Centres/Hospitals,

the following needed to be taken into
account:
The MoHSW should ensure that all funds
transferred to hospitals are itemized
according to their nature of expenditure
instead of being transferred in block
amount as noted during the audit.
The MoHSW in collaboration with the
Treasury should improve communication
with the Hospital managements to ensure
immediate deletion of ghost workers who
are still in the Government Computer
Payrolls.
I urge the District Designated and
Voluntary Agency Hospitals to adhere to
the contract agreement signed between
MoHSW and the respective Hospitals on
adherence to the terms and conditions of
Board members appointment.
I recommend to the MoHSW in
collaboration with the managements of
the Hospitals to ensure that in future
separate bank accounts are maintained in
respect of Government funds instead of
the current situation of mixing up these
funds with other hospital funds.
Furthermore, hospital managements
should be made to be accountable on the
public funds by preparing periodic
accounts/reports to the Ministry.
Alternatively the MoHSW together with
MoF could work out accordingly system
which will allow the use of bank account
but clearly capturing the transaction

related to the government funds received
by the hospitals.

11.8 National Agricultural Inputs Voucher
Scheme (NAIVS)
An audit on the National Agricultural Inputs
Voucher Scheme (NAIVs) which operate under
the Ministry of Agriculture, Food Security and
Cooperatives noted existence of some
challenges which need attention for smooth
operation of the scheme. These noted
challenges in the scheme include delays in
procurement of the agriculture input
vouchers, Lack of adequate information on
fertilizer and seed supply in the country,
Lack of operational manual of the system,
quality of seeds that do not yield the
expected outputs and delays in distribution
of agriculture input vouchers.
While the Government is actively
implementing the National Agricultural Input
Scheme aimed at increasing production of
food crops, audit findings indicate that there
are fundamental operational and control
issues that urgently need to be addressed by
the major implementers of the scheme
including the Ministry of Agriculture, Food
Security and Cooperative and RSs and District
Councils.

Recommendation
Following the challenges noted during the
audit, I recommend improvements of the
NAIVS to be made in the following areas:

Involve Agricultural Extension Officers,
Agriculture Seeds Agency and Agriculture
Research Institutions in reviewing and
assessing seeds and fertilizers issued in
the country who should also monitor on
counterfeit seeds and fertilizers.
Make sure that procurement and
distribution of vouchers are done timely.
Adequate soil analysis is done in various
parts of the country and fertilizer
vouchers are issued strictly in accordance
with the type of soil.
To come up with a simplified version
(preferably Swahili version) of an
operational manual clearly illustrating
how the basic records should be kept and
maintained, reconciliations to be done
and the periodical reports to be prepared
from the village to district and regional
level. Farmers should be made aware and
provided with information on the voucher
system on how it operates and the
benefits to be derived from the use of
quality seeds and fertilizers and the
operation of the NAIVS.

11.9 IPSAS preparedness and implementation
The Central Government has adopted accrual
basis of accounting in preparation of the
financial statements with effect from 2012/13
accounts. Apart from having provision of five
years as first time adopters of IPSAS accrual
basis of accounting, various challenges have
been noted including Non
maintenance/establishment of proper Non-

current asset register (this weakness has been
noted in 22 sampled MDAs and RSs), existence
of grounded and un-serviceable Non-current
asset (noted in 16 MDAs & RSs), Un revalued
Property, Plant and Equipment (noted in 17
MDAs & RSs) and lack of ownership documents.

The few challenges noted on IPSAS 17 and 25
demonstrates a need to those in Government
charged with the responsibilities of financial
management to address issues in connection
with IPSAS accrual implementation particularly
in the following areas;

Activities Backlog in the implementation
of IPSAS Accrual
Audit review of the roadmap for IPSAS
implementation noted several activities
which were planned to be accomplished
by 30
th
June, 2013 to be behind schedule.
Activities such as separation of grants and
borrowing, preparation of the accounting
manual and the chart of accounts were
not completed as planned hence
hindering the smooth progress of
implementation of the adoption of IPSAS
accrual.
Lack of National Committee responsible
for IPSAS implementation
The Government is yet to establish a
proper National Committee responsible to
oversee the progress on the
implementation of the IPSAS project. I
observed that, the responsibility for

coordination of IPSAS activities has been
solely left to the Accountant General. I
understand that, IPSAS project involves
various keep players responsible for
valuation, ownership, recognition and
measurement of Government assets.
However, the Government has no national
committee in place to coordinate and
overseen the successful implementation
of the whole project.

Property, Plant and Equipment (PPE)
In adopting the IPSAS accrual basis of
accounting, the Government has opted
for five years transition provision for PPE,
and I have noted that the Directorate of
Government Assets Management (DGAM)
has an action plan that indicates activities
for valuation of government assets for
five years (from 2012/13 to 2016/17).
However, various challenges need to be
addressed. These challenge include the
issue of valuation of government assets
being done in 2005/06 under the
supervision of DGAM, however there is no
updated PPE report disclosing assets
details such as bar code, report, schedule
of disposed assets etc; also there is
neither action plan nor asset management
guideline and financial statements
disclose any information about valuation
of properties especially land and
buildings.


Lack of actuarial valuation of benefits
plan for Government retiree
Pension for the public service retirees are
paid from the consolidated fund and the
arrangements is recognized by the
Government as Defined Benefit Plan. In
the course of audit, I noted that the
government lacked actuarial valuation of
the benefits plan for Government retirees
contrary to IPSAS 25. Without performing
actuarial valuation, the government has
failed to arrive at the initial liability for
the Defined Benefits Plans and for that
case, the Government could neither
determine the amount of actuarial
gains/losses nor, the past and current
services nor interest cost of the benefit
plan.

Local Government Authorities and
Institutions not consolidated in the
financial statements
On reviewing the consolidated financial
statements of the United Republic of
Tanzania, it was noted that they did not
include the revenue, expenditure, assets
and liabilities of the Local Government
Authorities (LGAs) and Parastatal
Institutions which are in fact using the
same IPSAS accrual financial reporting
framework. This is contrary to IPSAS 6
which requires a Controlling entity to
issue consolidated financial statements
which consolidates all government
controlled entities, foreign and domestic.

Recommendation
Since the Government has a provision of five
years as first time adopters of IPSAS accrual
basis, the Government is advised to do the
following so as to effectively use this
transition period:
Allocate enough resources in terms of
finances and human capital to facilitate
smooth operation of the IPSAS accrual
project.
The government should fully comply with
IPSAS 25 (Employee benefits) over
accounting for Defined Benefit Plans in
order to determine its initial liability for
defined benefit plans due to IPSAS accrual
first year adoption
Establish IPSAS National Coordination
Committee composed by professional
accountants and other professions who
will be the overseers of the five years
roadmap to make sure each step is taken
seriously and on time. So far one year has
lapsed remaining with four years.
DGAM should work closely with
stakeholders so as to enhance the
implementation of the action plan for
smooth compliance with IPSAS 17, and
make necessary adjustments in the
financial statements by separating land
and building into two distinct asset
classes.
The government is advised to initiate the
process of consolidating the financial
statements of LGAs and controlled

entities in the financial statements of
URT.
To properly configure Epicor and the
government budget systems for these
systems to process transactions and
generate financial statements according
to IPSAS accrual requirements.

11.10 Monitoring and evaluation of projects
financed through debt proceeds
In the course of reviewing the National Debt
Strategy of 2002, I noted the governments
effort at improving fiscal sustainability. One
of the ways to attain that, as mentioned in
the strategy is by improving the utilization of
project financing resources which could lead
to sustained economic growth.

However, up to now, there is no department
that is solely responsible for evaluation of
funded projects being financed through loan
proceeds. This could result into sub optimal
which could in turn have a significant impact
on the payback potential of the economy.

Recommendation
As borrowings for development projects is
increasing by becoming a nations priority, I
advise the government to consider
establishing a mechanism for monitoring and
evaluation of projects for which funds raised
through loans are. This will help in the
continuous evaluation of the impact of
funded projects and also minimize the

expectation gap between stakeholders and
the government.

11.11 Lack of Unified Debt Management Office
Management Office (DMO) is becoming a
major concern in the Public Debt
management in the country. The current set-
up which involves Ministry of Finance (MoF),
the Planning Commission, the Attorney
Generals Chamber, and the Bank of
Tanzania (BoT) is detrimental to the
management of public debt due to the fact
that each key player has different core
activity apart from dealing with public debt
which is seen as a secondary function. In
such a situation, transparency which is vital
in debt management is a far reaching point
and accountability is being compromised to a
great extent.

Recommendation
The need for a unified Debt Management
Office is one of the key issues that were
addressed during the financial year
2010/2011. I advise the government to fasten
the establishment of a unified DMO in order
to effectively and efficiently coordinate debt
management activities in the country.

11.12 Converted Liquidity Papers into financing
papers
During the year I noted that the government
had mismatch between revenue collection
and expenditure which led the government

to convert liquidity papers (Treasury Bills)
with Face Value of Shs.339,490,810,000 into
financing paper at an interest cost of
Shs.21,543,703,100. In converting liquidity
papers, domestic debt stock is increased as
well as exposure to rollover risk. Moreover,
liquidity paper conversion contradicts the
government monetary policy of curbing
inflation through mop out of excess cash
(monies) from the economy.

Recommendation
I advise the government to refrain from
converting liquidity papers in order to avoid
likelihood of future debt stock stress.
Proactive and bold measures need to be
taken by the government including but not
limited to improvement on government
revenue collection through TRAs Revenue
Gateway System, fiscal discipline and
effective budget estimates.

11.13 Release of funds towards the end of the
financial year
I noted that Exchequer Issues of
percent of the total exchequers were
disbursed in the 52
nd
week i.e the last week
of the financial period. Moreover, exchequer
released during the fourth quarter were
percent of the total exchequer issues during
the year 2012/2013 of
Shs.14,328,769,376,759 whilst exchequer

Issues for the 3
rd
, 2
nd
, and 1
st
Quarter were
22.1%, 18.9%, and 27.6% respectively.
This demonstrates the existence of
challenges in timely releases of Exchequer
Issues and hence, delaying timely
implementation of planned activities.

Recommendation
In order to tackle the challenge of late
release of approved funds, the government is
advised to align Exchequer Issues with budget
and revenue collections to avoid release
funds close to end of the financial period. By
so doing, it is expected that planned
activities will be implemented according to
the approved action plan.

11.14 Management of Customs and Bonded
Warehouses
I reviewed the operations of the selected
customs and bonded warehouses for the
period under review to evaluate the level of
compliance with the provisions stipulated in
Part IV of the East African Community
Customs Management Act (EACCM), 2004. I
noted that goods with custom duties
amounting to Shs.1,102,640,256 had been
overstayed in the warehouses and no action
was taken to collect the outstanding
revenues. Also, TRA suspended and closed
thirteen Bonded Warehouses before
collecting customs duties totaling
Shs.1,803,910,991. Apart from that, twenty
seven Customs Bonded Warehouses were in
operation without valid licenses from the

Commissioner for Customs and Excise and no
action has been taken against the owners of
the customs bonded warehouses who were
operating without valid licenses.

Recommendation
The government is advised to ensure
adequate controls on the operation of
Customs Warehouses and Customs Bonded
Warehouses and collect the appropriate
customs duties accordingly. In addition, TRA
is urged and insisted to be in the fore front
of ensuring there is compliance and
enforcement of the existing tax legislations
in the country.


14.0 ANNEXURES
Annexure A
Audit opinions for the past four years
Colors Used
Definition of colors used Unqualified
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
1 9 Remuneration Board N/A N/A N/A Unqualified
2 8 Constitutional Review Commission N/A N/A N/A Unqualified
3 10 Joint Financial Commission N/A N/A N/A
Unqualified
with
Emphasis
4 12 Judicial Service Commission Unqualified Unqualified Unqualified Unqualified
5 13 Financial Intelligence Unit N/A N/A N/A Unqualified
6 14
Ministry of Home Affairs - Fire and
Rescue Force
Unqualified
with
Emphasis Qualified Unqualified Qualified
7 15
Commission for Mediation and
Arbitration (CMA) N/A Unqualified Unqualified
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
8 16 Attorney General's Chambers
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with other
matters
9 20 Presidents Office, State House Unqualified Unqualified Unqualified Unqualified
10 21 Treasury Qualified Unqualified Unqualified
Unqualified
with
Emphasis
11 22 Public Debt and General Services
Unqualified
with
Emphasis Unqualified Unqualified Qualified
12 23 Accountant Generals Department
Unqualified
with
Emphasis Unqualified Unqualified
Unqualified
with
Emphasis
13 24
Cooperatives Development
Commission (CDC) N/A Qualified Unqualified
Unqualified
with
Emphasis
14 25 Prime Ministers Private Office Unqualified Unqualified Unqualified Unqualified

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
15 26 Vice Presidents Office (VPO)
Unqualified
with
Emphasis
Unqualified with
16 27 Registrar of Political Parties
Unqualified
with
Emphasis
Unqualified with
17 28 Police Force
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
18 29 Prison Service Department (PSD)
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
19 30
Presidents Office and Cabinet
Secretariat
Unqualified
with
Emphasis Unqualified Unqualified Unqualified
20 31 Vice Presidents Office Unqualified
Unqualified with

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
21 32
Presidents Office Public Service
Management
Unqualified
with
Emphasis Unqualified
Unqualified
with
Emphasis
Unqualified
with
Emphasis
22 33 Ethics Secretariat Qualified
Unqualified with
23 34
International Cooperation
Unqualified
with
Emphasis
Unqualified with
Emphasis Qualified Unqualified
24 35 Directorate of Public Prosecutions N/A Unqualified Unqualified
Unqualified
with
Emphasis
25 37 Prime Ministers Office Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
26 38 Tanzania Peoples Defense Forces
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
27 39 National Service
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
28 40 Judiciary of Tanzania N/A N/A N/A
Unqualified
with
Emphasis
29 41
Ministry of Constitutional and
Legal Affairs
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
30 42 National Assembly
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
31 43
Ministry of Agriculture, Food Security
and Cooperatives
Unqualified
with
Emphasis
Unqualified with
Emphasis Unqualified Qualified
32 44 Ministry of Industry and Trade Qualified
Unqualified with
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
33 46
Training
Unqualified
with
Emphasis Qualified
Unqualified
with
Emphasis Qualified
34 48
Ministry of Lands, Housing and Human
Settlements Development Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
35 49 Ministry of Water
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
36 50 Ministry of Finance Qualified Unqualified Unqualified
Unqualified
with
Emphasis
37 51 Ministry of Home Affairs Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
38 52 Ministry of Health and Social Welfare Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
39 53
Ministry of Community Development
Gender and Children Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
40 55
Commission for Human Rights and
Good Governance
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
41 56
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
42 57
Ministry of Defense and National
Service
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
43 58 Ministry of Energy and Minerals
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
44 59
Law Reform Commission of Tanzania
(LRCT)
Unqualified
with
Emphasis
Unqualified with

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
45 61 National Electoral Commission
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
46 62 Ministry of Transport N/A N/A Unqualified Unqualified
47 65 Ministry of Labour and Employment
Unqualified
with
Emphasis
Unqualified with
Unqualified
with other
matters
48 66
Presidents Office Planning
Commission (POPC)
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
49 67
Public Service Recruitment
Secretariat N/A
Unqualified with
50 68
Ministry of Communication, Science
and Technology
Unqualified
with
Emphasis Unqualified Unqualified Qualified
51 69
Ministry of Natural Resources and
Tourism Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis &
other

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
52 91 Drugs Control Commission
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
53 92
Tanzania Commission for Aids
(TACAIDS) Qualified Qualified Unqualified Qualified
54 93 Immigration Service Department
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
55 94
Presidents Office Public Service
Commission Qualified Qualified Unqualified Unqualified
56 96
Ministry of Information, Youth,
Culture and Sports Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
57 97 Ministry of East African Cooperation Unqualified Unqualified Unqualified Unqualified
58 98 Ministry of Works
Unqualified
with
Emphasis
Unqualified with

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
59 99
Development Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
60 N/A National Consolidated Accounts Adverse Qualified Qualified Disclaimer
61 70 Regional Secretariat Arusha
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
62 71 Regional Secretariat Coast Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
63 72 Regional Secretariat Dodoma Disclaimer
Unqualified with
Unqualified
with
Emphasis
64 73 Regional Secretariat Iringa
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
65 74 Regional Secretariat Kigoma
Unqualified
with
Emphasis Qualified
Unqualified
with
Emphasis Qualified

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
66 75 Regional Secretariat Kilimanjaro Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
67 76 Regional Secretariat Lindi Adverse
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
68 77 Regional Secretariat Mara Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
69 78 Regional Secretariat Mbeya
Unqualified
with
Emphasis
Unqualified with
Unqualified
with other
matters
70 79 Regional Secretariat Morogoro
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
71 80 Regional Secretariat Mtwara
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
72 81 Regional Secretariat Mwanza
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
73 82 Regional Secretariat Ruvuma
Unqualified
with
Emphasis
Unqualified with
74 83 Regional Secretariat Shinyanga Unqualified
Unqualified with
75 84 Regional Secretariat Singida Qualified
Unqualified with
Emphasis
Unqualified
with
76 85 Regional Secretariat Tabora Qualified
Unqualified with
77 86 Regional Secretariat Tanga Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
78 87 Regional Secretariat Kagera Qualified Qualified Unqualified Qualified

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
79 88 Regional Secretariat DSM
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
80 89 Regional Secretariat Rukwa Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
81 95 Regional Secretariat Manyara Qualified
Unqualified with
82 63 Regional Secretariat Geita N/A N/A N/A
Unqualified
with
Emphasis
83 47 Regional Secretariat Simiyu N/A N/A N/A Unqualified
84 54 Regional Secretariat Njombe N/A N/A N/A Qualified
85 36 Regional Secretariat Katavi N/A N/A N/A Qualified
86 2018 Tanzania Embassy in Washington
Unqualified
with
Emphasis
Unqualified with

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
87 2011
Tanzania Permanent Mission to UN in
New York Unqualified
Unqualified with
Unqualified
with
Emphasis
88 2029 Tanzania Embassy in Muscat
Unqualified
with
Emphasis
Unqualified with
Emphasis Qualified Adverse
89 2024 Tanzania Embassy in Saudi Arabia
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
90 2012 Tanzania High Commission in Ottawa Unqualified
Unqualified with
91 2019 Tanzania Embassy in Brussels Qualified Unqualified
Unqualified
with
Emphasis
Unqualified
with
Emphasis
92 2022 Tanzania High Commission in Harare
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
93 2030
Tanzania High Commission in
Lilongwe
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
94 2007 Tanzania High Commission in Lusaka
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with other
matters
95 2008 Tanzania High Commission in Maputo Unqualified
Unqualified with
Unqualified
with
Emphasis
96 2004 Tanzania Embassy in Kinshasa
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
97 2021 Tanzania High Commission in Kampala Qualified
Unqualified with
Emphasis
Unqualified
with
Emphasis Qualified
98 2025 Tanzania High Commission in Pretoria Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
99 2014 Tanzania Embassy in Beijing
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
100 2032
Tanzania High Commission in Kuala
Lumpur
Unqualified
with
Unqualified
with
Emphasis
Unqualified
with other
matters

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
101 2017 Tanzania Embassy in Tokyo
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
102 2028 Tanzania Embassy in Bujumbura Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
103 2023 Tanzania High Commission in Nairobi
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
104 2026 Tanzania Embassy in Kigali
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
105 2020
Tanzania Permanent Mission to UN in
Geneva Unqualified Unqualified
Unqualified
with
Emphasis
Unqualified
with
Emphasis
106 2009 Tanzania Embassy in Moscow
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
107 2016 Tanzania Embassy in Stockholm
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
108 2001 Tanzania Embassy in Addis Ababa
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
109 2005 Tanzania Embassy in Abuja
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
110 2003 Tanzania Embassy in Cairo N/A
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
111 2027 Tanzania Embassy in Abu Dhabi
Unqualified
with
Emphasis
Unqualified with
112 2010 Tanzania High Commission in New Delh
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis

Colors Used
Unqualified with
Emphasis/Other
matters Qualified
Adverse/Di
sclaimer
S/N
Vote
No. Name
Financial year
2009/10 2010/11 2011/12 2012/13
113 2031 Tanzania Embassy in Brasilia Unqualified
Unqualified with
Unqualified
with
Emphasis
114 2013 Tanzania Embassy in Paris
Unqualified
with
Emphasis
Unqualified with
Unqualified
with
Emphasis
115 2002 Tanzania Embassy in Berlin Unqualified
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
116 2006 Tanzania High Commission in London
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis
117 2015 Tanzania Embassy in Rome
Unqualified
with
Emphasis
Unqualified with
Emphasis
Unqualified
with
Emphasis
Unqualified
with
Emphasis


Annexure 'B':
List of audited entities issued with unqualified
opinion with emphasis of matters
S/N
Vote
No. Name
1. 10 Joint Finance Commission
2. 15 Commission for Arbitration and Mediation
3. 21 Treasury
4. 23 Accountant General's Department
5. 24 Cooperative Development Commission
6. 28 Police Force Department
7. 32 President's Office - Public Service Management
8. 35 Directorate of Public Prosecution
9. 38 Tanzania Peoples Defense Force
10. 40 Judiciary of Tanzania
11. 41 Ministry of Constitutional and Legal Affairs
12. 42 National Assembly
13. 44 Ministry of Industries and Trade
14. 49 Ministry of Water
15. 50 Ministry of Finance
16. 53
Ministry of Community Development Gender
and Children
17. 55
Commission for Human Rights & Good
Governance
18. 56 PMO RALG
19. 61 National Electoral Commission
20. 63 Regional Secretariat Geita
21. 66 President's Office - Planning Commission
22. 69 Ministry of Natural Resources and Tourism
23. 71 Regional Secretariat Coast
24. 72 Regional Secretariat Dodoma
25. 76 Regional Secretariat Lindi
26. 79 Regional Secretariat Morogoro
27. 80 Regional Secretariat Mtwara
28. 91 Drugs Control Commission
29. 93 Immigration Department
30. 96
Ministry of Information, Youth, culture and
Sports
31. 2001 Embassy of Tanzania in Addis Ababa

S/N
Vote
No. Name
32. 2002 Tanzania Embassy in Berlin
33. 2003 Tanzania Embassy in Cairo
34. 2005 High Commission of Tanzania in Abuja
35. 2006 Tanzania High Commission in London
36. 2008 Tanzania High Commission in Maputo
37. 2009 Tanzania Embassy in Moscow
38. 2010 Tanzania High Commission in New Delhi
39. 2011 Permanent Mission to UN - New York
40. 2013 Tanzania Embassy in Paris
41. 2014 Tanzania Embassy in Beijing
42. 2015 Tanzania Embassy in Rome
43. 2016 Tanzania Embassy in Stockholm
44. 2017 Tanzania Embassy in Tokyo
45. 2019 Tanzania Embassy in Brussels
46. 2020 Permanent Mission to UN Geneva
47. 2022 High Commission of Tanzania in Harare
48. 2023 Tanzania High Commission in Nairobi
49. 2024 Tanzania Embassy in Saudi Arabia
50. 2025 Tanzania High Commission in Pretoria
51. 2026 Embassy of Tanzania in Kigali
52. 2028 Embassy Tanzania in Bujumbura
53. 2030 High Commission of Tanzania in Lilongwe
54. 2031 Brasilia


Annexure 'C':
List of entities issued with qualified
S/N Vote Name
1. 14 Fire & Rescue Forces
2. 22 Public Debt and General Service
3. 29 Prisons Service Department
4. 36 Regional Secretariat Katavi
5. 37 Prime Minister's Office
6. 43
Ministry of Agriculture Food Security
and Cooperatives
7. 46
Training
8. 48
Ministry of Lands, Housing and Human
Settlement
9. 51 Ministry of Home Affairs
10. 52 Ministry of Health and Social Welfare
11. 54 Regional Secretariat Njombe
12. 68
Ministry of Communication Science
and Technology
13. 70 Regional Secretariat Arusha
14. 73 Regional Secretariat Iringa
15. 74 Regional Secretariat Kigoma
16. 75 Regional Secretariat Kilimanjaro
17. 77 Regional Secretariat Mara
18. 81 Regional Secretariat Mwanza
19. 82 Regional Secretariat Ruvuma
20. 83 Regional Secretariat Shinyanga
21. 85 Regional Secretariat Tabora
22. 86 Regional Secretariat Tanga
23. 87 Regional Secretariat Kagera
24. 88 Regional Secretariat DSM
25. 89 Regional Secretariat Rukwa
26. 92 TACAIDS
27. 95 Regional Secretariat Manyara
28. 99
Development
29. 2004 Tanzania Embassy in Kinshasa
30. 2021
High Commission of Tanzania in
Kampala


Annexure D
A list of outstanding matters Shs.636,849,769,109
Vote No Name of MDAs/RSs Amount (Shs.)
98 Ministry Of Works 253,777,000,000
50 Ministry Of Finance 244,919,408,625
21 Treasury 72,668,447,899
72 RS Dodoma 9,991,961,854
2010 Tanzania High Commission In New Delhi 5,382,527,223
2015 Tanzania Embassy In Rome Italy 4,600,825,745
43 Ministry of Agriculture Food Security and Cooperatives 3,815,969,749
2017 Tanzania Embassy In Tokyo 3,429,872,984
95 Regional Secretariat Manyara 3,303,426,486
52 Ministry Of Health And Social Welfare 2,913,573,127
87 Regional Secretariat Kagera 2,605,614,715
2002 Tanzania Embassy In Berlin German 2,453,805,737
28 Ministry Of Home Affairs-Police Force Department 2,075,030,964
84 RS Singida 1,924,588,306
77 RS Mara 1,732,142,728
48 Ministry Of Lands, Housing And Human Settlements Development 1,694,732,183

2014 Tanzania Embassy In Beijing 1,642,445,371
40 Judicial Of Tanzania 1,579,576,663
29 Prisons Service Department 1,574,752,633
57 Ministry Of Defense And National Service 1,533,315,317
61 National Electoral Commission 1,467,872,154
2013 Tanzania Embassy In Paris 765,365,030
80 Regional Secretariat Mtwara 735,820,882
46 Ministry Of Education And Vocational Training 690,139,477
79 RS Morogoro 633,121,982
85 RS Tabora 600,381,196
34 Ministry Of Foreign Affairs And International Cooperation 571,061,728
2022 Tanzania Embassy In Harare 564,000,000
73 RS Iringa 524,352,884
56 Prime Ministers Office Regional Administration And Local Government 469,328,336
27 Registrar Of Political Parties 444,442,497
81 RS Mwanza 435,634,069
2025 Tanzania High Commission Pretoria 326,535,838
2005 Tanzania High Commission In Abuja 301,624,570
78 RS Mbeya 273,165,167
2019 Tanzania Embassy In Brussels 267,930,497
83 RS Shinyanga 263,258,692
31 Vice Presidents Office 249,221,700

86 RS Tanga 244,439,837
76 RS Lindi 216,318,045
75 RS Kilimanjaro 211,544,454
2024 Tanzania Embassy Saud Arabia 195,412,800
69 Natural Resources And Tourism 191,017,785
74 RS Kigoma 173,663,747
99 Ministry Of Livestock And Fisheries Development 159,709,282
65 Ministry Of Labor And Employment 157,950,573
2021 Tanzania High Commission Kampala 154,145,814
68 Ministry Of Communication, Science And Technology 150,908,539
37 Prime Ministers Office 143,773,537
92 Tanzania Commission For Aids 137,923,693
49 Ministry Of Water 132,598,919
32 Presidents Office Public Service Management 131,299,820
88 RS Dar Es Salaam 129,989,639
2030 Tanzania High Commission In Lilongwe 120,372,615
2006 Tanzania High Commission In London 113,929,389
25 Prime Ministers Private Office 110,382,035
89 RS Rukwa 90,940,112
93 Immigration Service Department 83,344,000
2008 Tanzania Embassy Maputo 80,424,530
2020 Tanzania Embassy In Geneva 74,799,725

53 Ministry Of Community Development Gender And Children 74,672,005
2027 Embassy Of Tanzania Abu Dhabi 70,151,117
2018 Tanzania Embassy Washington Dc 46,420,015
71 RS Coast 36,587,800
2016 Tanzania Embassy In Stockholm 35,564,430
42 Office Of The National Assembly 34,721,330
82 RS Ruvuma 29,996,830.00
2007 Tanzania High Commission In Lusaka 23,441,989
38 Tanzania Peoples Defense Forces (Ngome) 20s,648,800
2004 Tanzania Embassy Kinshasa-Congo 18,957,683
67 Public Service Recruitment Secretariat 13,426,000
44 Ministry Of Industry And Trade 10,881,863
94 Presidents Office Public Service Commission 10,513,000
51 Ministry Of Home Affairs 7,215,500
91 Drug Control Commission 5,546,277
10 Joint Finance Commission 3,800,000
2011 Tanzania Permanent Mission To The United Nations - New York 60,562.24
636,849,769,109


Annexure 'E'
Payments charged to wrong Account codes-
Shs.2,394,834,855
S/
N
Vote no. Description Amount (Shs.)
1 Vote 32 Presidents office
public service
management
38,107,000
2 Vote 97 Ministry of East African
Cooperation
2,746,800
3 Vote 9 Public Service
Remuneration Board
22,640,000
4 Vote 92 Tanzania Commission
for Aids
6,475,000
5 Vote 15 Commission for
Mediation and
Arbitration
59,003,000
6 Vote 88 RS DSM 48,150,000
7 Vote 36 RS-Katavi 83,686,811
8 Vote 78 RS-Mbeya 10,693,692
9 Vote 82 RS-Ruvuma 27,751,306
10 Vote 83 RS-Shinyanga 6,569,280
11 Vote 86 RS-Tanga 45,262,247
12 Vote 73 RS-Iringa 7,020,000
13 Vote 85 RS-Tabora 79,595,647
14 Vote 63 RS-Geita 40,017,625
15 Vote 24 Cooperatives
Development
Commission
4,887,352
16 Vote 56 Prime Ministers Office
Regional
Administration and
Local Government
148,720,000
17 Sub Vote
2024
Embassy of Saudi
Arabia
97,722,020
18 Vote 75 RS-Kilimanjaro 32,165,170
19 Vote 52 Ministry of health and
social welfare
80,169,526
20 Vote 29 Prisons Service 5,313,153.67

S/
N
Department
21 Vote 25 Prime Ministers
Private Office
14,093,000
22 Vote 74 RS-Kigoma 159,216,400
23 Vote 87 RS-Kagera 896,948,228
24 Vote 39 National Service 450,139,500
25 Vote 27 Registrar of Political
Parties
27,742,098
Total 2,394,834,855


Annexure 'F':
Expenditure made out of the approved budget
S/N Vote
No.
Description Amount (Shs.)
1 Vote 55 Human Rights and Good
Governance
104,746,978
2 Sub Vote
2001
Embassy of Tanzania-
Addis Ababa
108,138,176
3 Sub Vote
2003
Cairo
63,457,672
4 Sub Vote
2014
Beijing
904,038,218
5 Sub Vote
2022
High Commission of
Tanzania-Harare
105,089,537
6 Sub vote
2030
High Commission of
Tanzania-Lilongwe
90,025,650
7 Sub vote
2007
High Commission of
Tanzania-Lusaka
40,660,635
8 Sub Vote
2013
Paris
680,393,389
for Aids
51,925,387
10 Vote 72 RS-Dodoma 50,279,887
11 Vote 74 RS-Kigoma 35,555,000
12 Vote 95 RS-Manyara 24,551,200
13 Vote 77 RS-Mara 32,028,000
15 Vote 76 RS-Lindi 119,477,909
16 Sub Vote
2019
Embassy of Tanzania-In
Brussels
644,433,885
17 Sub Vote
2020
Permanent Mission to
the UN-Geneva
176,868,506
18 Sub Vote
2004
Kinshasa
54,038,085
19 Sub Vote
2010
High Commission of
Tanzania-New Delhi
353,838,152
20 Sub Vote
2008
High Commission of
Tanzania-Maputo
117,400,068
21 Sub Vote
2025
High Commission of
Tanzania-Pretoria
1,381,285,962
22 Sub Vote Embassy of Tanzania- 314,491,556

S/N Vote
No.
2015 Rome
23 Sub Vote
2016
Stockholm
748,364,575
24 Vote 25 Prime Ministers Private
Office
12,612,770
25 Vote 87 RS-Kagera 10,450,000
26 Vote 38 Tanzania Peoples
Defence Forces
(Ngome)
8,403,574,214
27 Vote 69 Ministry of Natural
Resources and Tourism
463,901,674
28 Vote 82 RS-Ruvuma 42,002,067
29 Sub Vote
2002
Embassy In Berlin
German
445,225,527
30 Vote 70 RS-Arusha 198,394,273
Total 15,785,285,943


Annexure 'G'
Inadequate supported payments
S/N Vote
No.
1 Vote 39 National Service 855,725,500
2 Vote 55 Human Rights and Good
Governance
9,181,200
3 Vote 98 Ministry of Works-TBA 41,687,500
for Aids
760,332,921
5 Vote 93 Immigration Service
Department
493,692,835
6 Vote 74 RS-Kigoma 2,000,000
7 Vote 95 RS-Manyara 8,180,955
8 Vote 54 RS-Njombe 9,030,000
9 Vote 89 RS-Rukwa 11,697,050
10 Vote 82 RS-Ruvuma 9,202,900
11 Vote 83 RS-Shinyanga 59,634,368
12 Vote 73 RS-Iringa 19,286,800
13 Vote 70 RS-Arusha 700,000
14 Vote 85 RS-Tabora 59,544,305
15 Vote 63 RS-Geita 8,758,975
16 Vote 87 RS-Kagera 31,320,000
17 Vote 47 RS-Simiyu 38,313,867
Regional Administration
and Local Government
169,698,380
19 Vote 91 Drug Control
Commission Vote
1,359,600
20 Vote 99 Ministry Of Livestock
and Fishereis
Development
344,799,155
22 Vote 46 Ministry of Education
and Vocational training
9,857,952,830
23 Vote 52 Ministry of health and
social welfare
889,210,229
24 Vote 42 National Assembly 34,810,980
25 Vote 81 RS-Mwanza 29,764,600
26 Sub Tanzania Permanent 31,350,792

S/N Vote
No.
Vote
2011
Mission to The United
Nations - New York
27 Vote 29 Prisons Service
Department
613,317,559
28 Vote 38 Tanzania Peoples
Defence Forces (Ngome)
23,487,000
29 Vote 69 Ministry of Natural
Resources and Tourism
27,056,570
Total 14,498,110,341


Annexure 'H'
Nugatory expenditure
S/N Vote
no.
Description Amount
(Shs.)
Nature of
expenditure
1. Vote
36
RS-Katavi 9,905,321 Car accident
repair cost
despite having
insurance cover
2. Vote
47
RS-Simiyu 4,485,000 Fuel expenses
not confirmed in
log books
3. Vote
89
RS-Rukwa 20,650,000 Payment for
service wrongly
ordered (PFR
21(C ))
4. Sub
Vote
2031
Embassy of
Tanzania-
Brasilia
36,755,782 Payment for
accommodation
rented and
renovation but
not used
5. Sub
Vote
2018
Embassy of
Tanzania-
Washington
DC
271,229,771

Use of
taxpayers'
monies for
Settlement of
the civil case
against the
private offence
committed by
mission's officer
and payment of
allowances to
personnel
beyond their
stay
6. Sub
Vote
2001
Embassy of
Tanzania-
Addis Ababa
4,280,078 Penalty due to
delay to pay
rent for 14
months
7. Vote Ministry of 8,164,692 Penalty due to

S/N Vote
no.
Description Amount
(Shs.)
Nature of
expenditure
43 Agriculture
Food
Security and
Cooperative
s
delay to pay
rent for 7
months
8. Vote
72
RS-Dodoma 220,136,665 Asset procured 3
years back not
yet in use to
date
9. Vote
89
RS-Rukwa 44,394,927 Unjustifiable
extraordinary
cost for
maintenance of
STK 5508
10. Total (Shs.) 620,002,236


Annexure 'I'
The funds used for unintended activities

s/
n
1 Vote 54 RS-Njombe 2,600,000
2 Vote 88 RS-DSM 11,547,400
3 Vote 74 RS-Kigoma 58,961,000
4 Vote 80 RS-Mtwara 59,319,887
5 Vote 87 RS-Kagera 42,093,134
6 Vote 97 Ministry of East African
Cooperation
980,000
8 Vote 85 RS-Tabora 22,725,000
9 Vote 79 RS Morogoro 1,867,000
10 Vote 95 RS-Manyara 101,470,625
11 Vote 81 RS-Mwanza 155,943,347
12 Vote 86 RS-Tanga 44,837,145
13 Sub Vote
2011
Tanzania Permanent
Mission to The United
Nations - New York
943,169,232
15 Sub Vote
2018
Washington DC
34,051,735
16 Vote 76 RS-Lindi 88,485,000
Regional Administration
and Local Government
89,500,000
Total 1,770,390,504



Annexure 'J'
Evaluation of Internal Control System

VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
MINISTRIES, DEPARTMENTS AND AGENCIES (MDAs)
9
Public Service
Remuneration Board

_

_

_

_

_
12
Judicial Service
Commission

_

_

_

_
13
Financial Intelligence
Unit

_

_

_

_

_
20
Presidents Office
State House

_

_

_

_

_
23 Accountant General


VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
Department
_

_ _ _ _
24
Cooperatives
Development
Commission

_

_

_

_

_
27
Registrar of Political
Parties

_

_

_
28
Police Force
Department
_ _ _ _ _
30
Presidents Office
and Cabinet
Secretariat

_

_

_

_
31

Vice Presidents
Office
_

_

_

_

_

33
Ethics Secretariat

_

_

_


VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
37

Prime Ministers
Office
_ _

_

_

_

38

Tanzania Peoples
Defence Force

_

_

_

39
National Service
_

_

_ _
44
Ministry of Industry
and Trade

_

_

_
49 Ministry of Water
_ _ _

_ _
50 Ministry of Finance
_ _ _

_ _
55

Commission for
Human Rights
_ _

_ _ _
57
Ministry of Defense
_

_

_

59

Commission for
Human Rights and


VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
Good Governance
_ _ _ _ _
65

Ministry of Labour
and Employment

_

_

_

_

_

66
Planning Commission
_

_

_ _

67
Public Service
Recruitment
Secretariat

_

_

_

_

_
68

Ministry of
Communication,
Science and
Technology

_

_

_
96

Ministry of
Information, Youth,
Culture, and Sports

_

_

_

_

VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
97

Ministry of East
African Cooperation

_

_

_

_

_
98
Ministry of Works
_ _ _

_ _
94

President
Office_Public Service
Commission

_

_

_

_
REGIONAL SECRETARIATS (RSs)
36
RS Katavi
_ _
47
RS Simiyu
_ _ _
54
RS Njombe
_ _ _ _
63
RS Geita
_ _
70
RS Arusha
_ _ _
72
RS Dodoma
_ _ _
73
RS Iringa
_ _ _ _ _
74
RS Kigoma
_ _

VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
75
RS Kilimanjaro

_ _ _ _ _
76
RS Lindi
_ _ _ _ _
77
RS Mara
_ _ _ _
78
RS Mbeya
_
79
RS Morogoro
_
80
RS Mtwara
_ _ _ _ _
81
RS Mwanza
_ _ _ _ _
82
RS Ruvuma
_ _ _ _ _
83
RS Shinyanga
_ _ _ _ _
84
RS Singida
_ _
85
RS Tabora
_ _ _
86
RS Tanga
_
89
RS Kagera
_ _ _ _
88
RS DSM
_ _ _ _
89
RS Rukwa
_ _ _ _

VOTE

MDA/RS
Inefficiency
Performance of
Internal Audit
Unit
Inadequate IT
Control
Environment

Inefficiency
Performance
of
Audit
Committee
Lack of
Risk
Management
Assessment

Lack of
documented
Fraud
Prevention
Plan
Epicor
accounting
package not
fully utilized
95 RS Manyara
_


Annexure 'K'
Inadequate number of staff
S/No
Vot
e/Su
b
vote
MDAs/RS
Staff
Require
ments as
per
establish
ment
Current
Staff
Level
Staff
Short
age
Staff
Shortage
%
1. 13 Financial Intelligence
Unit (FIU)
52 17 35 67
2. 14 Fire and Rescue Force
department
4064 1156 2908 72

3. 27 Registrar of Political
Parties 196 51 145
74
4. 35 Directorate of Public
Prosecutions (DPP)
1,019 419 600 59
5. 36 RS Katavi 146 44 102 70
6. 47 RS Simiyu 281 51 230 82
7. 53 Ministry of Community
Development Gender and
Children
5,513 1,141 4372 79
8. 55 Commission for Human
Rights and Good
249 208 41 16

S/No
Vot
e/Su
b
vote
MDAs/RS
Staff
Require
ments as
per
establish
ment
Current
Staff
Level
Staff
Short
age
Staff
Shortage
%
Governance
9. 63 RS Geita 324 169 155 48
10. 68 Ministry of
Communication, Science
and Technology
22 8 14 64
11. 72 RS Dodoma 79 26 53 67
12. 73 RS Iringa 793 555 238 30
13. 74 Regional hospital-RS
Kigoma
432 204 228 53
14. 77 RS Mara 738 529 209 28
15. 83 RS Shinyanga 269 149 120 45
16. 84 RS Singida 1059 455 604 57
17. 86 RS Tanga 701 467 234 33
18. 87 RS Kagera 801 522 279 35
19. 88 RS Dar es-Salaam 230 180 50 22
20. 89 Sumbawanga Regional
Hospital Rukwa
470 147 323 69

S/No
Vot
e/Su
b
vote
MDAs/RS
Staff
Require
ments as
per
establish
ment
Current
Staff
Level
Staff
Short
age
Staff
Shortage
%
21. 89 RS Rukwa 473 288 185 39
22. 95 RS Manyara 530 253 277 52
23. 96 Ministry of Information,
Youth, Culture and
Sports
331 286 45 14
24. 200
5
Tanzania High
Commission in Abuja
5 2 3 60
25. F75 RS Kilimanjaro 1155 745 410 35
26. 79 RS Morogoro 969 735 234 24
27. 85 RS Tabora 587 481 106 18
28. 85 Kitete Regional Hospital-
RS TABORA
671 248 423 63
Total 22,160 9,536 12,62
4
57



ANNEXURE 'L'
Stock verification report by office of stock verifier for financial year (I) UNSUPPORTED
ISSUES OF STORES AND FUEL-SHS. 926,306,812
Vote Ministry/Department/Region Amount (Shs.)
46 Ministry of Education and Vocational Training 30,209,319
44 Ministry of Industries and Trade 3,642,000
47 Ministry of Works 317,868,872
69 Ministry of Natural Resources and Tourism 44,562,260
58 Ministry of Energy and Minerals 20,853,980
99 Ministry of Livestock Development and
Fisheries
11,575,152
53 Ministry of Community Development, Gender
& Children
17,149,350

28 Tanzania Police Services 95,979,520
16 Attorney General Chamber's 9,545,000
40 Judiciary 63,137,060
93 Tanzania Immigration Service 39,615,000
29 Tanzania Prison Services 69,037,736
79 Regional Administrative Secretary- Morogoro 57,804,757
83 Regional Administrative Secretary- Shinyanga 54,403,007
72 Regional Administrative Secretary- Dodoma 6,048,000
95 Regional Administrative Secretary-Manyara 1,133,000
75 Regional Administrative Secretary-Kilimanjaro 5,291,500
77 Regional Administrative Secretary-Mara 55,722,500
74 Regional Administrative Secretary- Kigoma 6,860,000
85 Regional Administrative Secretary- Tabora 1,657,800
87 Regional Administrative Secretary- Kagera 4,147,500
52 Ministry of Health and Social Welfare 10,063,500
TOTAL 926,306,813

(II) UNSUPPORTED RECEIPTS OF STORES-SHS.

2,726,633,911
VOTE MINISTRY/DEPARTMENT/REGION AMOUNT
37 Prime Minister's Office 640,048,000
Fisheries
43,100,960
53 Ministry of Community Development,Gender &
Children
42,522,350
48 Ministry of Land, Housing and Human
Settlement
7,000,000
32 President Office-Public Service Management 81,635,000

40 Judiciary 62,167,266
85 Regional Administrative Secretary - Tabora 5,691,200
54 Regional Administrative Secretary - Njombe 8,040,080
81 Regional Administrative Secretary - Mwanza 3,856,000
75 Regional Administrative Secretary -
Kilimanjaro
14,377,700
77 Regional Administrative Secretary - Mara 288,666,410
74 Regional Administrative Secretary - Kigoma 9,755,000
TOTAL 2,726,633,911

(IV) UNACCOUNTED RECEIPTS OF STORES-
SHS. 732,686,791


34 Ministry of Foreign Affairs & International
Cooperation
3,420,000

48 Ministry of Land & Human Settlement 10,033,745
50 Ministry of Finance 27,743,700
65 Ministry of Labour and Youth Development 2,000,000
66 Planning Commission 128,069,869
40 Judiciary 5,055,000
91 Drugs Control Commission 4,355,000
93 Tanzania Immigration Services 22,313,100
85 Regional Administrative Secretary - Kagera 4,315,400
77 Regional Administrative Secretary - Mara 34,440,877
TOTAL 732,686,791

(V) UNMAINTAINED LOAN REGISTER-SHS.
46,326,412.00


Vote Ministry/Department/Region Amount
81 Regional Administrative Secretary - Pwani 46,326,412
TOTAL 46,326,412

(VI) EXCESSIVE ISSUE OF FUEL-SHS.
4,362,065.00

TOTAL 4,362,065

(VII) UNAPPROVED ADDITIONAL WORKS-SHS.
37,128,000.00

TOTAL 37,128,000

(VIII) IMPROPER POSTING - SHS.
1,910,000.00


TOTAL 1,910,000

(IX) UNCOMPLETED WORKS - SHS.
242,100,440.00

TOTAL 242,100,440

(X)PAYMENT OF WORKS NOT COMPLETED -
SHS. 44,857,928.00

TOTAL 44,857,928

(XI) DEFICIENT STORES-SHS. 436,713,066
VOTE MINISTRY/DEPARTMENT/REGION Amount(Shs)

43 Ministry of Agriculture and Cooperatives 35,258,534
and Children
3,223,150
62 Ministry of Transport 4,196,890
TOTAL 436,713,066


(XII) UNACCOUNTED PURCHASES OF STORES-
SHS. 5,342,194,700

Vote Ministry/Department/Region Amount(Shs)
46 Ministry of Education and Vocational Training 1,186,315,654
Cooperation
149,607,210
99 Ministry of Livestock Development 62,966,779
48 Ministry of Land and Human Settlement 5,625,000

& Children
40,039,300
40 Judiciary 110,635,832
79 Regional Administrative Secretary-Morogoro 11,904,150
82 Regional Administrative Secretary-Ruvuma 2,108,850
75 Regional Administrative Secretary-Kilimanjaro 5,294,020
81 Regional Administrative Secretary-Mwanza 72,576,481
71 Regional Administrative Secretary- Coast 26,140,120
74 Regional Administrative Secretary-Kigoma 4,050,000
72 Regional Administrative Secretary-Dodoma 11,493,158

87 Regional Administrative Secretary-Kagera 250,965,274
TOTAL 5,342,194,700

(XIII) UNRECEIPTED ISSUES OF STORES-SHS.
3,779,659,039

Fisheries
15,239,010
& Children
32,041,117

32 President Office- Public Service Management 5,332,500
29 Tanzania Prison Service 184,607,550
79 Regional Administrative Secretary- Morogoro 830,000
75 Regional Administrative Secretary- Kilimanjaro 4,907,000
81 Regional Administrative Secretary- Mwanza 6,881,840
77 Regional Administrative Secretary- Mara 44,038,450
71 Regional Administrative Secretary- Coast 4,926,\9
95 Regional Administrative Secretary- Manyara 2,854,060

TOTAL 3,779,659,039

(XIV) ISSUES AGAINST NILL BALANCE -SHS.
41,363,200

TOTAL 41,363,200

(XV) IRREGULAR PROCUREMENT -SHS.
1,115,000

Vote Ministry/Department/Region Amoun(Shs.)
TOTAL 1,115,000

(XVI) PROCUREMENT WITHOUT COMPETITIVE
QUATATION-SHS. 237,754,344

Vote Ministry/Department/Region Amount(Shs.)

16 Attorney General Chambers 20,024,600
TOTAL 237,754,344

(XVII) STORES NEITHER IN MASTER
INVENTORY REGISTER NOR INVENTORY
SHEETS-SHS. 570,887,400

and Children
23,255,000
Fisheries
18,685,000

46 Ministry of Education and Vocation Training 87,749,000
40 Judiciary 19,500,000
TOTAL 570,887,400

(XVIII) UNAUTHORIZED PAYMENT OF WORKS-
SHS. 3,240,000.00

TOTAL 3,240,000

(XIX) IRREGULAR ISSUES OF STORES -SHS.
3,625,000.00


TOTAL 3,625,000

(XX) IMPROPER POSTING -SHS. 7,500,000
TOTAL 7,500,000

(XXI) UNTRANSFERRED BALANCE OF STORES-
SHS. 1,160,934,158.00


TOTAL 1,160,934,158

(XXII) OUTSTANDING STORES ON LOAN-SHS.
133,509,210.00

43 Ministry of Agriculture, Food Security &
Cooperatives
49,736,000
53 Ministry of Community Development,Gender &
Children
2,032,500
74 Regional Administrative Secretary- Kigoma 15,623,500
TOTAL 133,509,210


(XXIII) FUEL NOT RECORDED IN THE LOG
BOOK-SHS. 216,789,901.00

Fisheries
4,640,400
48 Ministry of Land, Housing and Human
Settlement
3,380,000
TOTAL 216,789,901


(XXIX) FUEL NOT TAKEN ON LEDGER - SHS.
433,858,166

Cooperatives
90,021,841
40 Judiciary 73,359,285
75 Regional Administrative Secretary- Kilimanjaro 9,589,000
95 Regional Administrative Secretary- Manyara 4,969,800
TOTAL 433,858,166


(XXV) UNACCOUNTED ISSUES OF STORES -
SHS. 110,066,640.00

TOTAL 110,066,640

(XXVI) MAINTANANCE AND REPAIR OF
GOVERNMENT VEHICLES TO PRIVATE
GARAGE WITHOUT PRIOR APPROVAL FROM E
& M DIVISION-SHS. 94,922,668.81


TOTAL 94,922,669

(XXVII) UNDELIVERED STORES-SHS.
1,773,377,965

Fisheries
312,185,641

TOTAL 1,773,377,965

(XXVIII) UNPOSTED RECEIPTS OF STORES-
SHS. 93,015,600.00


TOTAL 93,015,600

(XXIX) UNPOSTED ISSUES OF STORES-SHS.
866,525,065


Cooperatives
65,506,944
Cooperation
1,876,000

82 Regional Administrative Secretary- Ruvuma 971,500
TOTAL 866,525,065

(XXX) EXHIBIT ITEMS NOT HANDED BACK TO
RESPECTIVE OWNERS -SHS. 2,614,000.00

TOTAL 2,614,000

(XXXI) EXPIRED DRUGS/CHEMICALS -SHS.
31,312,095


TOTAL 31,312,095

GRAND TOTAL 20,103,289,577

Annexure 'M'
List of MDAs, RS and Embassies with Grounded and un-serviceable Non current
asset
S/No Vote/
sub
vote
MDAs/RS Grounded and un-serviceable
asset
1) Agenc
y
TANROADS Arusha The crusher machine has not
been serviced and repaired for
more than two years now
2) 34 Ministry of Foreign
Affairs and International
cooperation
Motor vehicles with cost value
of Shs. 517,500,000
3) 42 National Assembly Motor vehicles with cost value

S/No Vote/
sub
vote
asset
of Shs.110,480,100
4) 43 Ministry of Agriculture
Food Security and
Cooperatives
of Shs.359,500,000
5) 53 Ministry of Community
Development Gender
and Children
Toyota L/C Station Wagon(STJ
6012), Nissan Patrol SGL (STK
76) and Nissan Patrol Station
Wagon (STK
2262)
6) 61 National Electoral
Commission
of Shs.165,539,382
7) 63 RS Geita One motor vehicle TOYOTA
LAND CRUSER S/W with
Registration No. STK 9547 was
grounded from 30
November,2012
8) 66 Planning Commission Computers, printers and

S/No Vote/
sub
vote
asset
photocopy machines.
9) 68 Communications
Science and
Technology
Isuzu Mini Bus grounded for
one year
10) 78 RS Mbeya Hilux Double Cabin with
registration No.DFP 4682 and
Nissan Patrol with registration
No.STK 6575
11) 89 RS Rukwa two (2) Motor Vehicles and
three (3) motor cycles
12) 95 RS Manyara Three motor vehicles and
nineteen motorcycles with
total acquisition cost of
Shs.130,867,766 had been
grounded without being
repaired.

S/No Vote/
sub
vote
asset
13) 2006 Tanzania High
Commission in London
Motor vehicle with registration
number 2620206 Type M-BENZ-
E240 was acquired in the year
2004 at a cost price of
Shs.105,823,000 and is
grounded since 2009.
14) 2022 Tanzania Embassy in
Harare
(i) Mercedes Benz E 240 with
registration number 76 CD
purchased in the year 2001
(ii) Toyota Hiace (Service car)
with registration number
76 CD 3 purchased in the
year 2004
15) 2004 Tanzania embassy
Kinshasa
Suzuki with registration no.
034 CD 02
16) 2024 Embassy of Tanzania in
Riyadh
Toyota Mini Bus, Ford Tempo,
Toyota

S/No Vote/
sub
vote
asset
Camry and Toyota
Camry with registration
number CD-44/3; CD-44/2;
CD-44/1 and CD-44/5
respectively
17) 29 Prisons Service
Department
20 motor vehicles in Prisons
Regional Office Kilimanjaro


Annexure 'N'
List of MDAs RS and Embassies with partial revaluation of Property, Plant and
Equipment
S/No Vote/Sub
vote
MDAs/RS Remarks
1 Agency TANROADS 74 motor vehicles disclosed in the
Financial statement have no
value hence PP&E figure was
underestimated
2 10 Joint Finance
Commission
Despite the asset valuation being
done in 2005/06, Values shown in
the reports for all assets are of
Financial Year 2003/04.

3 13 Financial Despite the asset valuation being

S/No Vote/Sub
vote
MDAs/RS Remarks
Intelligent
Unit
done in 2005/06, Values shown in
the reports for all assets are of
Financial Year 2003/04.

4 36 RS Katavi 6 Motor Vehicles, 1 Motor Cycle
and 7 buildings disclosed with
no value
5 54 RS Njombe 8 buildings located at Njombe
Makete, Makambako and Ludewa
were not valued.
6 65 Ministry of
Labour and
Employment
27 Labour Office buildings were
not valued as shown below:
1 Labour office building
located in DSM
26 Labour Office buildings
located up country stations
namely Songea, Njombe,

S/No Vote/Sub
vote
MDAs/RS Remarks
Tukuyu, Mbeya, Morogoro,
Ifakara, Kilosa,Tanga,
Korogwe, Lushoto, Muheza,
Same, Moshi, Arusha, Lindi,
Mtwara, Dodoma, Singida,
Tabora, Kigoma, Mwanza,
Kagera, Mafinga,
Shinyanga, Kahama and
Musoma
7 78 RS Mbeya A total of 25 Motor vehicles out of
38 vehicles available have no
value and 25 buildings out of 30
buildings available have no value.
8 88 RS Dar es
Salaam
8 buildings (Ilala DCs office (Ilala
Boma), Kinondoni DCs office
,Temeke DCs office, Kariakoo
Division Office, Mbagala Division
Office ,Kigamboni Division Office

S/No Vote/Sub
vote
MDAs/RS Remarks
,Kigamboni Ward Office, Mbagala
Ward Office);12 motor vehicles
and three motor cycles had do
value.
9 2002 Embassy of
Tanzania in
Berlin
The Embassy building has not
been revalued since it was
acquired in 2003 at a total cost of
Shs. 2,449,037,200 equivalent to
Euro 1,250,000.
10 2003 Tanzania
Embassy In
Cairo Egypt
4 buildings were not valued, one
of them was valued in year 1976
and another one in year 2001
11 2005 Tanzania High
Commission in
Abuja
Two (2) plots ( There is no
valuation of the land since 19
th

October, 2004 when the
properties were allocated by the
Government of Nigeria ) also two
motor vehicles with zero value

S/No Vote/Sub
vote
MDAs/RS Remarks
were not re-valued
12 2014 Tanzania
Embassy in
Beijing China
Government of Tanzania building,
situated at 53, Dong Liu Jie, San
Li Tun having a total area of
Seven thousand and twelve square
metres (7,012 m2) bought at USD
1,980,000) has not been valued.
The contract for purchase was
signed in 12
th
January, 1989.
Commission-
Kampala
five buildings located at Plot No.6
Kagera/Shimon Rd, Plot No.7
Katonga Rd, Plot No.4 Ridgeway
Drive, Plot No.6 Abu Qarga
(Khartoum) and Plot No.5 MAC-
NIMIR(Khartoum) were not valued
Commission in
Lilongwe
Five (5) buildings and one (1) plot:
neither land nor buildings were
valued since when these

S/No Vote/Sub
vote
MDAs/RS Remarks
properties were acquired. Land
and buildings were acquired in
2003 and 2004 respectively
15 2011 Tanzania
Permanent
Mission to the
United Nations
one building (Flat) located at 30
Over hill Mount Vernon NY 10552
acquired in 1964 (approximately
50 years ago) and two buildings
(Apartments) located at 30 Street
NY 10016 and 33 Street NY
10010,acquired in 1982
(approximately 30 years ago) were
not revalued
16 2018 Tanzania
Embassy -
Washington DC
three buildings i.e. House No.1
40 years ago), House No. 2139
36 years ago), and House No.9914

S/No Vote/Sub
vote
MDAs/RS Remarks
32 years ago) were not revalued.
17 2015 Embassy of
Tanzania in
Rome
Two buildings one was acquired in
2002 at a cost of
Shs.2,370,024,000 equivalent to
Euro 1,200,000 and another
building was acquired for
Shs.2,040,025,413 equivalent to
Euro 1,032,914.


Annexure 'O'
List of MDAs and RS with Improper recognition of intangible assets
S/No Vote MDAs/RS Amount(Shs.
)
Remarks
1. 43 Ministry of
Agriculture
Food Security
and
Cooperatives
5,842,805,97
3
Note 61 to the financial
statements disclose
reports and documents
as intangible assets

)
Remarks
2. 46 Ministry of
Education and
Vocational
Training
(MoEVT)
11,978,566,8
13
Transferred to various
institutions under the
Ministry to cover
appraisal costs.

3. 70 RS Arusha 246,398,410 Note 61 to the financial
statements disclose
4. 71 RS Coast 540,436,610 Note 61 to the financial
statements disclose
5. 68 Ministry of
Communicatio
n, Science and
Technology
737,827,680 Note 61 to the financial
statements disclose
6. 81 RS Mwanza 114,731,482 Note 61 to the financial

)
Remarks
statements disclose
7. 82 RS Ruvuma 194,545,500 Appraisals
15,000,000 and Reports,
Documents etc
179,545,500 were
disclosed as intangible
assets
8. 98 Ministry of
Works
11,760,110,0
47
Transfer of funds to
meet the following
expenses;
(i) Consulting works
Shs.2,067,418,000
(ii) Land damage
compensation
payments
Shs.9,692,692,047.13

)
Remarks
was disclosed as
intangible assets
9. F75 RS Kilimanjaro 265,687,412 Expensed for SLM
project was recognized
(grouped) as Intangible
Assets.

activities for SLM
project include:-
Development
expenditure incurred to
restore Kilimanjaro
climate conditions, soil
fertility, increase crop
productivity, introduce
income generating
activities like bee and
poultry keeping, refrain

)
Remarks
people from
deforestation, preserve
water sources, prevent
soil erosion by
constructing check dams
and sub soiling, and all
land related activities.
Total 31,681,109,
9258



Annexure 'P'
List of MDAs, RS and Embassies with unsettled liabilities
S/No. Vote MDAs/RS Amount (Shs.)
1. 12 Judicial Service Commission 3,813,000
2. 14 Fire and Rescue Force department 345,659,803
3. 15 Commission for Mediation and
Arbitration
144,481,616
4. 16 Attorney Generals Chambers 650,471,593
5. 24 CooperativeDevelopment
Commission
13,523,134
6. 28 Ministry of Home Affairs-Police
Force Department
123,707,877,057
7. 30 Presidents Office And Cabinet
Secretariat
1,386,821,720
8. 31 Vice Presidents Office 723,500,261
9. 32 Presidents Office Public Service
Management
2,782,667,533
10. 33 Presidents Office - Ethics
Secretariat
158,486,224

11. 34 Ministry of Foreign Affairs and
International Cooperation (MFAIC)
8,509,231,003
12. 35 Directorate of Public Prosecutions 173,292,904
13. 37 Prime Minister's Office 516,276,499
14. 38 Tanzania Peoples Defence Forces 47,263,538,902
15. 39 National Service 16,941,427,457
16. 40 Judiciary of Tanzania 1,733,559,659
17. 43 Ministry of Agriculture Food
Security and Cooperatives
44,739,685,559
18. 44 Ministry of Industry and Trade 602,221,147
19. 47 RS Simiyu 208,920,427
20. 49 Ministry of Water 6,152,485,146
21. 51 Ministry of Home Affairs 813,158,107
22. 53 Ministry of Community
Development Gender and Children
2,823,393,281
23. 61 National Electoral Commission 2,246,616,280
24. 65 Ministry of Labour and Employment 683,831,493
25. 66 Planning Commission 516,898,837

26. 67 Public Service Recruitment
Secretariat
310,430,327
27. 68 Ministry of Communication Science
and Technology
162,073,744
28. 69 Ministry of Natural Resources and
Tourism
567,186,431
29. 70 RS Arusha 617,865,810
30. 72 RS Dodoma 1,749,791,442
31. 74 RS Kigoma 199,219,197
32. 86 RS Tanga 1,139,615,661
33. 77 RS Mara 752,083,766
34. 78 RS Mbeya 151,533,000
35. 82 RS Ruvuma 687,324,501
36. 83 RS Shinyanga 136,681,304
37. 84 RS Singida 357,504,940
38. 85 RS Tabora 684,820,669
39. 88 RS Dar Es Salaam 182,882,717
40. 89 RS Rukwa 356,771,074

41. 93 Immigration Service Department 456,498,496
42. 94 Presidents Office Public Service
Commission
432,610,713
43. 95 RS Manyara 277,245,314
44. 96 Ministry of Information, Youth,
Culture and Sports
717,088,528
45. 98 Ministry of Works 2,873,864,166
46. 99 Ministry of Livestock and Fisheries
Development
716,596,341
47. 2007 Tanzania High Commission Lusaka
Zambia
171,301,003
48. 2022 Tanzania Embassy in Harare 126,896,880
49. 2023 Tanzania Embassy in Bujumbura 40,327,496
50. 2028 Tanzania High Commission Nairobi 17,999,650
Total 277,728,051,812

Public Accounts Audit by CAG Tanzania 2012/2013

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