Audit reports reveal more rot in government entities

Dar es Salaam. The Controller and Auditor General (CAG) tabled his 2021/22 audit reports to Parliament yesterday, revealing how a number of government entities misappropriated public funds amounting to billions of shillings.

This comes a few days after the CAG and the Prevention and Combating of Corruption Bureau (PCCB) submitted their reports for the 2021/22 financial year to President Samia Suluhu Hassan.

According to the CAG, Mr Charles Kichere’s reports, while the losses of non-commercial public organisations climbed by 71 percent in the financial year 2021/2022, reaching Sh303.83 billion, the debts of 24 organisations exceeded their capital.

According to the CAG report, 67 percent of the losses incurred by non-commercial organisations were due to the National Health Insurance Fund (NHIF), which alone recorded a loss of Sh204.65 billion.

The loss, he said, was due to an increase in the cost of medical benefits and member service costs that did not match the income.

Also, the fund has had a negative cash flow in its operational activities; this trend showed that contributions were increasing by 12.9 percent while spending increased by 24.6 percent twice.

The report indicates that 11 commercial organisations have debts greater than their capital, while 13 non-commercial ones have the same situation.

A commercial organisation like the Tanzania Railway Corporation (TRC) has a debt that is 23 times greater than its capital, while the debt of the Tanzania Electric Supply Company Limited (Tanesco) is three times greater than its capital.

That means that while TRC’s capital is Sh392.41 billion, its debt is Sh9.24 trillion, while Tanesco’s capital stands at Sh3.94 trillion compared to its debt of Sh15.62 trillion.

Further, 14 organisations have been mentioned as suffering losses, including Air Tanzania Company Limited (ATCL). CAG noted that ATCL has been making losses for five consecutive years, and despite the government giving a subsidy of Sh30.63 billion in 2021/2022, it still reported a loss of Sh35.23 billion.

“If the government had not provided the subsidy, the company would have suffered a loss of Sh65.86 billion. This shows the challenges that ATCL is currently facing in the market,” says CAG.

In one of the aspects of the reports, the CAG further noted that it had found various irregularities in the expenditure management of several public entities.

He revealed to have noted mismanagement of funds released by the Ministry of Lands, Housing and Human Settlements Development advanced to councils a sum of Sh26.04 billion for surveying, planning, and titling of land.

The amount, he notes, was out of the total loan amount of Sh41.14 billion that was disbursed by the aforesaid ministry to 54 councils and five other government institutions in 2021, with only Sh15.1 billion repaid to the ministry.

“This means that there is a balance of Sh26.04 billion (equivalent to 63 percent) that has not been refunded,” he said, adding that it was in violation of Article Seven of the agreement, which stipulates that the loan must be repaid to the Ministry within six months from the date of the MoU (December 15, 2021, to June 15, 2022).

From the mismanaged amount, he found out that Shinyanga Municipal Council, Shinyanga District Councils, and Dodoma City Council utilized Sh2.35 billion in activities not related to the surveying, planning, and titling of land.

On the other hand, Musoma District Council, Shinyanga Municipal Council, Tabora Municipal Council, and Mtwara Municipal Council, generated a total revenue of Sh2.02 billion and used Sh1.37 billion for other activities, while the same was supposed to be refunded to the ministry.

In this regard, the CAG attributed the shortcomings to inadequate monitoring and supervision by the ministry of Land to ensure that the projects were implemented by the councils as per the agreement.

He noted that the delay in loan repayment had denied the government the opportunity to utilize the funds for other development activities.

“I recommend that the Ministry of Lands, Housing and Human Settlements Development strengthen monitoring and supervision, and enforce the agreed terms,” he advised.

In addition, he said that the ministry should take immediate action to fulfil its obligation to repay the borrowed amount of Sh50 billion to the Ministry of Finance and Planning as per the pact.

Further, during his audit on procurement management, he noted that on December 21, 2020, the Ministry of Home Affairs entered into an agreement with Tanzania Automotive Technology Centre (TATC) for the supply of three fire engine trucks with a total amount of Sh2.98 billion.