Former CAG calls for probe into Bank of Tanzania, Tanga port and missing Sh1.2 trillion

Dodoma. As the government has started taking action against executives implicated in the Controller and Auditor General (CAG) report for 2020/21, Wajibu Institute of Public Accountability (Wipa) wants comprehensive investigations and actions.

Wipa’s executive director Ludovick Utouh pointed out areas requiring probe as the tendering process for the expansion of Tanga Port and bank notes exchange at the Bank of Tanzania (BoT).

“The two issues constitute a huge fraud that requires immediate government’s action by putting to task all the implicated officials. These are the things seriously hurting our economy and the general public,” said Mr Utouh, who is also an ex-CAG.

In his analysis, he said CAG Charles Kichere’s audit exposed hints of corruption in the Tanga Port expansion project where the contractor was paid over Sh104 billion and later subcontracted the job to another firm.

The sub-contracted firm agreed to execute the job at Sh40 billion, therefore enabling the main contractor to pocket Sh64 billion without performing any duty.

Also, a specialised audit conducted between January 2017 and December 2019, revealed that BoT incurred Sh3.99 billion loss for exchanging defective notes.

Between January 2017 and September 2019, CAG says in a report that BoT received 417,006 defective goods worth Sh10,000 each valued at Sh4.17 billion for exchange.

“However, his audit shows that only 1,427 notes worth Sh14.27 million were not defective deserving removal from circulation and 16,187 others worth Sh161.87 million deserving exchange,” he said.

“Also, 399,392 notes worth Sh3.99 billion lacked criteria, however, the new notes were issued under dubious circumstances organised by six BoT officials,” he added. As for the Sh1.2 trillion scam, Mr Utouh said the CAG report revealed that the money was never remitted to the Consolidated Fund raising serious concerns that require immediate address and accountability in public funds supervision.

Mr Utouh was speaking during the launching of four Institute’s accountability reports. The event was held before Parliamentary Standing Committees, representatives of civil society organisations (CSOs), government executives and members of the media.

He said Sh31.32 trillion was collected in the 2020/21, which is equivalent to 89.8 percent of the target to collect Sh34.87 trillion approved by Parliament.

According to him, reconciliation of collected revenue and those remitted in the consolidated fund shows that a total of Sh3.554 trillion, which is equivalent to 10.19 percent, was uncollected.

“But, the CAG says in a report that only Sh30.07 trillion of the total collections was remitted to the Consolidated Fund, meaning that over Sh1.25 trillion remains unremitted,” he said. According to him, the CAG attributed the difference to funds that were directly disbursed to implementation of development projects as well as the amount that wasn’t deposited to the fund by the Tanzania Revenue Authority (TRA) until end of 2020/21 Fiscal Year.

“There are things that need to strongly be addressed once reported by the CAG for citizens to see that action is being taken,” he said.

“We don’t mean that the said funds have been swindled, but they are not seen in the government systems. The Ministry of Finance and Planning should properly oversee procedures to pass all government monies in the available system,” said Mr Utouh.

“I noted 399,392 pieces of Sh10,000 notes were attached with plain papers to claim new notes. The pieces were cut from 199,696 notes,” said the CAG in the report.

The CAG said the central bank did not keep records of customers who changed the defective notes, making it difficult to identify them.

In the customer attendance book from January to November 2019, the CAG noted only 24 customers who visited the BoT regularly to exchange the scrap notes.

He advisied the BoT governor to take action against employees involved in the scam.

“Government funds and national resources belong to the people who must be informed of everything about its use. When there is a smell of corruption, it is crucial that action be taken against culprits,” stressed Mr Utouh.

The CAG report should be expedited

Stakeholders at the launch of the four reports by Wajibu Institute included the chairman of Parliamentary Budget Committee, Mr Daniel Sillo, proposed reduction in the preparation time of the CAG reports for lawmakers and other stakeholders to analyse it timely.

Vice chairman of the Parliament’s Public Accounts Committee (PAC), Mr Japhet Hasunga, said in the current system, the reports were discussed more than a year after the weaknesses were identified by the CAG.

“The financial statements are closed in June and they are submitted to the CAG in September 30. The CAG is then required to prepare reports for six months until March 31. Parliament begins to deliberate the reports in August,” he said.

“With the current technologies, the statements can be closed within one month. If the CAG time is also reduced, stakeholders will have enough time to discuss the reports,” said Mr Hasunga.

The chairman of the Board of Directors of Wajibu Institute, Mr Yona Killagane, said it was possible to reduce the time “the procedure is set out in the Constitution and the Public Accounts Act.”

“When the Constitution was drafted in 1977 this technology was not there. We should not fear to make productive changes,” said Mr Killagane, calling for the Constitution and laws to be amended to allow for such changes.

Regarding the irregularities in the Tanga Port project, Finance and Planning ministry’s permanent secretary Emmanuel Tutuba said every public institution had a returning officer responsible and answerable for negligence and losses in respective areas of jurisdictions.

“I’m the government paymaster. After I have made payments, there are officers entrusted for supervising expenditure of public funds. In case of negligence or corruption occasioning loss to the government, it is the returning officer who is supposed to be accountable,” he said.

“If the CAG has noted corruption, the Prevention and Combating of Corruption Bureau (PCCB) and other public institutions should work on the matter,” he added.

Regarding the Sh1.2 trillion, he declined to comment citing lack of such information.