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April 15th 2011

Highlights from the 2009/10 CAG audit of Tanzania’s Central Government Operations April 15th 2011 1. General Progress in implementing audit recommendations is rather mixed. Significant progress seems to have been made in resolving audit queries, yet there are more departments that have unresolved audit queries in 2009/10 compared to 2008/09. Also there are fewer clean (unqualified opinions) this year as compared to 2008/09. There seems to be a number of issues that have gained a perennial/repetitive status in Audits, and that are contributing to this situation .These include:  Non/partial response to audit queries  Non/partial implementation of Audit Recommendations resulting into a back log of audit issues that remains unattended from previous audits  Poor internal controls  Sub optimal utilisation of the Integrated Public Financial Management System and inadequate checks and balances integrated into it to safeguard public spending data.  Failure to follow best practices establishes in Public Accounts reporting i.e., International Public Sector Accounts Standards (IPSAS) as well as the Public Finance Act. Such issues need to be addressed unwaveringly. In particular, it would help if the Accounting Officers and Sub-Accounting Officers are held accountable in the event follow up audits reveal that they have not taken all the necessary and possible steps to rectify problems that have been unearthed by the Auditor General in previous Audits.

2. Expenditure management highlights from the CAG report on Central Government operations 2.1 Audit queries that remain outstanding/unresolved, have gone down but there are more MDAs/RASs with unresolved matters in 2009/10 than in 2008/09. The MDAs/RAs made significant progress in reducing amount of resources involved in matters of audit from previous years that remained unresolved. In 2008/09 audit queries that remained unresolved amounted to Shs. 1.1 trillion. In 2009/10 the amount had been reduced considerably to Shs. 468.627 billion. This is a step in a positive direction. However, the fact that MDAs/RASs with matters that are unresolved keeps increasing (Table 1) raises concerns about the level of commitment overall in resolving such issues completely. This issue can be put into a better perspective by what the CAG notes concerning responses obtained from the Paymaster General with respect to the 2008/09 audit queries. The CAG reports that more than 50% of the recommendations/queries He raised to Central Government departments were not responded to by the Pay Master General. These recommendations are reiterated in the current report (See page7-12 of the Audit report).


April 15th 2011 Table 1: Comparison of Outstanding matters of previous years’ Audits Amount Involved in Shs.

Number of MDAs/Ras Involved

64,504,129,099 1,036,225,348,815 1,055,460,602,544 468,627,883,842

17 17 37 46

2006/07 2007/08 2008/09 2009/10

Source: General Report of the CAG on Central Government for 2007/08 and 2009/10 All Accounting Officers and sub-Accounting Officers are required by law to send their responses to the Paymaster General for Consolidation and submission to the CAG. The law requires that the PMG sends the responses to the CAG within three months from the date of tabling of the Audit Reports. It is as such critical that the PMG follows up to ensure that adequate responses to the 2009/10 audit queries are provided, and that He is able to submit the responses to the CAG within the stipulated time frame. 2.2 Goods and Services that are paid for but are not delivered/or are only partially delivered have increased The amount of goods and services that are paid for by tax payers money but are not delivered at all or are only partially delivered have gone up more than eight folds to Shs. 14.7 billion in 2009/10 from Shs. 1.6 billion in 2008/09. The other worrisome element concerning this trend is that there are more Central Government departments that are involved. In 2008/09 there were four government departments (Fire and Rescue; Prisons; Ministry of Finance and Economic affairs and Immigration department) in 2009/10 there are 12. Table 2: Goods paid for but not delivered (in Tanzanian Shillings) 2008/09 and 2009/10 S/N





Undelivered motor vehicles in 2009/10



Fire and Rescue department






Prisons Department










Judiciary Lands, Housing and Human Settlements Development





Finance and Economic Affairs



Health and Social Welfare















RAS Coast





RAS Kilimanjaro





RAS Mbeya





RAS Rukwa





Immigration department



Infrastructure Development




n.a 5,830,602,264


14,749,964,673 6,451,424,473 Total 1,660,648,095 n.a No mention is made of vehicles; *Appears in individual Vote issues but not in the issue’s summary Source: General Report of the CAG on Central Government for 2008/09 and 2009/10


April 15th 2011 Close scrutiny suggests that a significant amount of goods that are not delivered are motor vehicles. For example the entire 1.6 billion worth of undelivered goods and services in 2008/09 involved purchase of motor vehicles and motor cycles from various suppliers; and of the Shs. 14.7 billion of undelivered goods in 2009/10 at least Shs. 6.5 billion (44%) relates to purchase of motor vehicles. This indicates that more control is needed on procurement of vehicles to ensure money utilised is well spent for the benefit of Tanzanian tax payers. 2.3 Salaries worth Shs.1.8 billion were paid to non-existent or ineligible officers Over the last couple of years, the CAG has consistently raised alarm over the tendency of salaries being paid to non-existent employees. The 2009/10 Audit reveals once again that this issue has not been fully resolved. The government spent Shs.1.8 billion shillings on salaries to absconded, retired and deceased employees in its various Central Government departments, an indication that payroll controls are still weak. As a Central Ministry responsible for overseeing Payrolls, the President’s Office- Public Service management needs to improve its oversight role in this area. Table 3: Salaries paid to non-existent or ineligible officers (In Tanzanian Shillings) S/N 1 2 3 4 5 6 7 8

Vote 31 32 48 52 69 85 87 93

MDAs/RAS Vice President’s Office President’s Office – Public Service Management Ministry of Lands and Human Settlement Development Ministry of Health and Social Welfare Ministry of Natural Resources and Tourism RAS Tabora RAS Kagera Immigration Service Department Total Source: General Report of the CAG on Central Government for 2009/10

Amount (Shs) 3,735,895 1,686,726,709 26,020,152 83,768,896 10,052,512 6,315,000 21,662,551 4,325,851 1,842,607,565

2.4 The Government borrowed Shs. 1.331 trillion from the Central Bank but failed to disclose the information In 2009/10 the government collected revenue amounting to Shs. 7.928 trillion from all its sources (domestic taxes and non tax revenue; loans and grants). In the same period, the government is reported to have spent Shs. 8.522 trillion. This implies a financing gap of Shs. 594.3 billion. Because the government could not raise sufficient money elsewhere to finance this gap, the government ran an overdraft in its Exchequer Account at the Central Bank at various times in the course of 2009/10 and closed the year with a cumulative overdraft of Shs. 1.331 trillion, about 15.6% of the total resources spent in the year. However, this amount did not feature in the statement of outstanding public debt which means that apart from misleading the public about resources available in the year, the figure of public debt reported was understated by an equivalent amount. 3

April 15th 2011

2.5 Cash budgeting is not observed. Central Government departments entered into commitments and incurred liabilities beyond their allocated means One of the challenging issues that the CAG has observed again in 2009/10 is the fact that government departments keep creating/entering into commitments for commitments for which no funds exists. The CAG has revealed that Shs. 254.617 billion in commitments and liabilities were created in 2009/10 by various Central Government departments over and above means available to them. This and the fact that the government ran such a huge overdraft with the BoT defeat the whole idea of cash budgeting. This year is however not the first time the CAG is raising this issue: “As pointed out in my last year’s report, the fact that these liabilities and commitments existed during the year under review defeats the Government’s IPSAS - cash basis reporting framework and the government’s cash budgeting system. Spending beyond the approved limit is illegal and therefore calls for disciplinary actions against Accounting Officers who fail to comply with the government’s cash budget system” (General Report of the CAG on Central Government for 2009/10, page 167)

3. Some issues affecting major service delivery sectors This part only includes some of the issues that involve substantial amounts of money (more than 25 Million per issue) in key social Sectors. The list is not exhaustive. Instead it is intended to be indicative of areas that need critical attention.

I: Education Vote 46: Ministry of Education and vocational Training Shs. 987,991,157.18  Unverified and unpaid Teachers claims as of June 2010 SHS.282, 543,545.34  Imprests (advances) that were paid in the year but which were not disclosed in financial statements SHS.518,649,690  Payments made without supporting documents SHS.46,341,491  Unconfirmed delivery of Specialized Equipment and Supplies that were supposed to be provided to handicapped students Shs.422,999,976.18 Vote 56: PMO-RALG Shs. 611,104,553  During the financial year 2009/2010, the PMO-RALG through the Secondary Education Development Programme ordered and paid total Shs. 611,104,553 to M/s Toyota (T) LTD for acquisition of ten (10) vehicles for SEDP but no vehicle had been delivered as at January 2011.


April 15th 2011

II: Health Vote 56: PMO-RALG: Shs. 4,886,045,280/=.  In February 2010, PMO-RALG ordered 43 Units of Ambulances from Toyota Tanzania for Councils. The amount involved sums up to Sh. 4,886,045,280/=. As of January 2011 (Almost a year later) these ambulances had not been delivered. Vote 75: RAS Kilimanjaro Shs.666, 372,949 

In September, 2009 a sum of Shs.125, 000,000 was paid to Incar Tanzania Limited for purchasing of brand new Iveco ambulance for Mawenzi Hospital, and was supposed to be delivered within 8 – 12 weeks from the date of order confirmation. One year and 3 months later (January 2011) this ambulance had not been delivered.  The RAS made advance payment (deposit with the Ministry of Infrastructure development) for purchase of three motor vehicles worth Shs.329, 877,640 in 2009/10. Up to the time of audit, there was no evidence to indicate that the vehicles had been delivered.  Unclaimed salaries amounting to Shs.211, 495,309 received from the Councils and for the Secretariat employees relating to retired, deceased, terminated employees were not returned to the Treasury. Besides that, the Secretariat is not maintaining a register for unclaimed salaries. Vote 78: RAS Mbeya Shs. 175,568,670  Hospital Ambulance paid for but not delivered Shs.77,047,000  Supply and installation of Mortuary Cold Room worth Shs.98, 521,670.05 was not yet completed. Vote 71: RAS Coast Shs. 123,750,000  IVECO Ambulance (Advanced life support Ambulance) worth Euro 66,000 equivalent to Shs.123,750,000 ordered during the year under review from M/S Incar Tanzania Ltd of Box 20479 Dar es Salaam is yet to be delivered

III: Internal Security/Safety Vote 14- Fire and Rescue Force Shs. 2,417,396,582

About Shs. 1,045,074,358 was spent by the Department in 2008/09 and 2009/10 yet the CAG could not be presented with proof of the goods being delivered The Breakdown is as follows: o Shs. 705,197,958 involves money used to buy Motor vehicles in 2008/09 but whose proof of delivery could not be presented neither in the previous audit nor in the just completed audit o Shs. 298,600,000 was paid to Noble Motors for supply of Motor vehicles in 2009/10 but until the audit of 2009/10 was completed the Audit Office had not been provided with proof of delivery


April 15th 2011


Shs. 41,276, 400 was paid to Open Sanit in 2009/10 to supply the Department with Fire and Rescue Uniforms. Proof of delivery could not be traced. In addition, the Department has as sum of Shs. 1,372,322,224 for implementation of various projects yet there is no adequate disclosure about the kind of projects to be financed.

IV: Water Vote 49: Ministry of Water Shs. 1,299,461,374.3  Ministry of Water and Irrigation awarded a contract to M/S Nyakirang’ani construction Limited for the Construction of Earth fill embankment Dam and Associated Civil Works for Kawa village in Nkasi District at a contract sum of Shs.1, 092,868,644. The works were expected to be completed on 5/9/2009. As at the time of audit in November, 2010, the contractor had already been paid Shs.721, 971,009 but the work had not been completed.  An agreement between the Ministry of Water and Irrigation and M/S Befra construction Company Limited was signed for the construction of Earth fill Embankment Dam and Associated Civil Works for Mti Mmoja Village in Monduli District at a contract sum of Shs.695, 765,256. However, Addendum order No.1 with Shs.206, 592,730.30 was not supported by an authority of the Tender Board.

4. Conclusion These notes are intended to provide some highlights from the audit reports unveiled recently by the Tanzanian Controller and Auditor General. It is shown that weaknesses in expenditure management continue to plague central government departments in Tanzania and that significant commitment will be required to safeguard use of tax payers’ money. If there is any way you can act, please do. And beyond that take your turn to read the audit report available from A lot of facts are presented there. All the details in this document are based on the Audit of Central Government for 2009/10 and two years preceding it.


Highlights from the 2009/10 CAG audit of Tanzania’s Central Government Operations April 15th 2011  

Progress in implementing audit recommendations is rather mixed. Significant progress seems to have been made in resolving audit queries, yet...

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