Report shows how Tanzania misused billions of Covid-19 funds

Dar es Salaam. The audit report of Controller and Auditor General (CAG) Charles Kichere highlighted flaws, with huge sums of money being misused while intended for the implementation of the country’s Covid-19 Socio-Economic Recovery and Response Plan (TCRP).

In September last year, the government secured $567.25 million (equivalent to Sh1.291 trillion) through a loan from the International Monetary Fund (IMF) under the Rapid Credit Facility (RCF) window disbursement.

The funds focused on health, education, water, tourism, social protection, energy, economic empowerment, and coordination and administration sectors for both Tanzania Mainland and Zanzibar, whereby Sh1 trillion was meant for the former and Sh230.1 billion for the latter.

Moreover, according to Mr Kichere, the ministry of Finance and Planning disbursed Sh1.24 trillion (96.21 percent) to implementers of the projects in the prioritised sectors, leaving a commitment balance of Sh48.93 billion (3.79 percent). The implementation of the TCRP involved the collaboration of various stakeholders across the government, with the Ministry of Finance and Planning serving as the overall coordinator.

Therefore, the audit report, which was submitted to President Samia Suluhu Hassan last week, has highlighted the shortcomings that could be a red flag for fraudulent activities.

Besides, the CAG, on the other hand, proposed some recommendations for improvement, promising to monitor the implementation of the said recommendations as part of the audit process.

For instance, the highlighted shortcomings as per CAG include the Value Added Tax (VAT), which according to him is worth Sh333 million and was paid by Ocean Road Cancer Institute to Anudha Limited on exempted medical equipment, thus demanding a refund.

Other illegal activities were noticed when the PO-RALG paid Sh1.4 billion to a supplier of motor vehicles without withholding a tax of Sh28.04 million (2 percent of the payment amount).

On the other hand, the Lugalo Hospital paid Sh33.75 million to a supplier for consultation and design without withholding a tax of Sh1.69 million (5 percent of the paid amount).

Therefore, Mr Kichere wants the service providers to remit the tax amount that was not withheld.

Other areas, according to the audited report, including the executed works by SUMA JKT Construction Company, were paid Sh217.80 million (100 percent) of the contract sum without confirming the value of completed works to justify the payments made.

The report disclosed that at least 21 entities paid a total of Sh17.92 billion to suppliers for various medical equipment that had not been received by the time of the audit (November 2022) beyond the contract period.

Furthermore, CAG Charles Kichere discovered by the time of the audit that the Ministry of Health had paid at least Sh18.85 billion to Toyota Tanzania and UNICEF for procuring motor vehicles that were yet to be delivered.

The CAG’s finger was also pointed at two Regional Referral Hospitals (RRH), which had executed construction projects valued at Sh2.07 billion without performance guarantees, which is contrary to public procurement regulations.

On the other hand, the special audit underlined that medical equipment suppliers under four contracts worth Sh8.9 billion delayed submitting the required performance securities, ranging from 122 to 155 days, against the stipulated 28 days from the date of notification of the award.

Another area where Mr Kichere wasn’t happy was when he discovered that Bugando Medical Centre had awarded seven contracts for supplying medical equipment worth Sh3.95 billion to a single bidder (Computech ICS (T) Ltd).

According to him, the red flag was also raised on suppliers delivering medical equipment worth Sh154.11 million contrary to the specifications in the signed contracts despite being paid the whole amount.

Besides, other medical equipment valued at Sh2.29 billion was received yet not inspected as the Lugalo General Military Hospital did not appoint a goods Inspection and Acceptance Committee for the procured CT scan (64 slices) and an oxygen generation machine.

Yet again, the said hospital also procured medical equipment worth Sh3.67 billion without user specifications as directed by the ministry responsible for health. In fact, the equipment was to be procured by ORCI and MSD.

In another incident, CAG disclosed that the same military hospital procured goods worth Sh4.01 billion without using TANePs, which is contrary to public procurement regulation. Failure to use TANePs reduces efficiency and limits transparency and fairness.

The CAG questioned the hospital’s (Lugalo) decision to undertake various procurements worth Sh447.55 million from various suppliers without contract agreements using a single-source procurement from SUMA JKT.

CAG recommends that hospitals ensure all agreements with suppliers are in writing and signed, thus avoiding legal disputes.