Financial audits in Zanzibar face lingering challenges despite progress

Unguja. Zanzibar has made strides in financial audits in the recent past, as indicated by the latest report from the Auditor General.

However, significant hurdles persist, with some institutions grappling with substantial deficiencies in financial reporting, leading to questionable audit statements or outright failure to provide information.

Presenting the report for the fiscal year 2022/23 at the Zanzibar State House, on Monday Controller and Auditor General (CAG), Dr Othman Abbas Ali, underscored ongoing challenges despite efforts to enhance financial reporting standards. Dr Ali revealed that the criteria for financial reporting continue to pose challenges.

In addition to highlighting flawed statements, the Auditor General drew attention to inefficiencies within government systems, many of which are outsourced.

These inefficiencies not only jeopardize the confidentiality of government information but also impede the attainment of organisational objectives. He also noted that his independence is at stake.

"I encounter constitutional independence challenges in executing my duties. There are instances where presidential appointees officials have openly threatened me, saying they could have me fired in a matter of hours," Dr Ali remarked, refraining from specifying individuals or entities.

Responding to these challenges, Zanzibar President Dr Hussein Mwinyi cautioned against any form of interference with the CAG's mandate, stressing the importance of upholding the rule of law.

In a bid to address operational issues highlighted in the Auditor General's report, Dr Mwinyi called for the establishment of a special committee, tasking Chief Secretary Zena Said with its immediate formation.

Dr Mwinyi outlined a plan for addressing audit queries, with criminal queries to be referred to the anti-corruption and economic crimes agency (ZAECA), while operational queries will be handled by the special committee.

Furthermore, Dr Mwinyi urged institutions consistently receiving questionable audit statements to undertake self-assessments, emphasizing the need to eliminate recurrent issues.

Despite acknowledging progress compared to previous years, Dr Mwinyi stressed the need for concerted efforts to overcome remaining challenges.

Out of 165 statements issued, 138 were deemed satisfactory, while 12 were questionable, and 15 failed to provide audit opinions.

Among the central government opinions, 95.45 percent were satisfactory, with only 4.5 percent being questionable. Similarly, 86 percent of opinions from public corporations and autonomous institutions were satisfactory, while 13.3 percent were questionable.

For regional authorities, local government authorities, and SMZ special departments, 86.36 percent of opinons were satisfactory, with 3.4 percent being questionable. However, 46.8 percent of development projects failed to provide audit opinions.

Institutions with questionable opinions included various government agencies and public corporations, reflecting systemic issues in financial management.

Failures to provide audit opinions were attributed to inadequate evidence or cooperation, along with errors in financial statements.

The Auditor General emphasized the importance of addressing internal control weaknesses and implementing recommendations to enhance financial governance.

Challenges in revenue collection persisted, with discrepancies between actual collections and bank deposits, and delays in revenue submission.

Domestic debt remained a significant concern, underscoring the need for prudent financial management practices.

Concerns were raised regarding discrepancies in infrastructure project costs and delays in fund disbursements, highlighting inefficiencies in project management.

Similarly, discrepancies in fund allocations to agencies like the Economic Empowerment Agency (ZEEA) raised questions about fiscal accountability.

President Mwinyi urged a concerted effort to address challenges highlighted in the report, emphasizing the importance of proactive measures to ensure financial integrity.

He underscored the need for adherence to legal procedures in government contracts and expressed optimism in overcoming prevailing challenges.

"In spite of the shortcomings, the achievements are noteworthy. A clean audit statement rate of 95.4 percent is commendable. It's imperative to establish a special committee to tackle operational issues," Dr Mwinyi concluded, stressing the importance of sustained efforts towards financial transparency and accountability.