CAG REPORT:LOCAL GOVERMENT 2008/2009

ANNUAL GENERAL REPORT OF THE CONTROLLER AND AUDITOR GENERAL

On the Financial Statements of Local Government Authorities

for the financial year ended 30th June, 2009

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 iii

THE UNITED REPUBLIC OF TANZANIA

NATIONAL AUDIT OFFICE

Telegram: “Ukaguzi” Telephone: 255(022)2115157/8 Fax: 255(022)2117527 E-mail: [email protected] Web site: www.nao.go.tz In reply please quote

Ref. No.CA.4/37/01/2008/2009

Office of the Controller and Auditor General Samora Avenue, P.O. Box 9080, DAR ES SALAAM. 26th March, 2010

Your Excellency Dr. Jakaya Mrisho Kikwete, The President of the United Republic of Tanzania, State House, P.O. Box 9120, DAR ES SALAAM.

Re: Submission of the Annual General Report of the Controller and

Auditor General on the Audit of Local Government Authorities (LGAs) for the financial year ended 30th June, 2009

Pursuant to Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised 2005) and Sect. 48 of the Local Government Finances Act No.9 of 1982 (Revised 2000), together with Sect. 34 of the Public Audit Act No.11 of 2008, I hereby submit to you the above mentioned report for your information and necessary action.

I submit,

Ludovick S.L. Utouh CONTROLLER AND AUDITOR GENERAL

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 iv

Office of the Controller and Auditor General, National Audit Office of the United Republic of Tanzania

The statutory duties and responsibilities of the Controller and Auditor General are enshrined in Article 143 of the Constitution of the URT of 1977 (revised 2005), further elaborated in Sections 45 and 48 of the Local Government Finances Act No 9 of 1982 (revised 2000) and in Sect.10 (1) of the Public Audit Act No. 11 of 2008. Vision To be a centre of excellence in public sector auditing Mission To provide efficient audit services in order to enhance accountability and value for money in the collection and use of public resources.

Our Core Values are:- Objectivity: We are an impartial organization, offering services

to our clients in an objective, and unbiased manner.

Excellence: We are professionals providing high quality audit services based on best practices.

Integrity: We observe and maintain high standards of ethical behaviour and the rule of law.

People’s focus: We focus on stakeholders’ needs by building a culture of good customer care and having competent and motivated work force

Innovation: We are a creative organization that constantly promotes a culture of developing and accepting new ideas from inside and outside the organization

© This audit report is intended to be used by Government Authorities. However, upon tabling of this report in Parliament, the report becomes a matter of public record and its distribution may not be limited.

(Established under Article 143 of the Constitution

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 v

Foreword By virtue of the provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised 2005), and Section 45 of the Local Government Finances Act No. 9 of 1982 (revised 2000) together with Sect. 9 of the Public Audit Act No.11 of 2008, the Controller and Auditor General to carry out financial audits for the purpose of establishing the financial performance of any expenditure or use of resources in the Local Government Authorities which involves enquiring, examining, investigating and reporting in so far as I consider necessary. I have the honour therefore, to submit to the President of the United Republic of Tanzania, Dr. Jakaya Mrisho Kikwete and through him to Parliament my Annual General Report on the audit of Local Government Authorities (LGAs) for the year ended 30th June, 2009.

This report contains conclusions and recommendations that directly concern the Local Government Authorities which operate under the Prime Minister’s Office - Regional Administration and Local Government Authorities (PMO-RALG).

The said Local Government Authorities have been given opportunity to scrutinize and discuss the factual contents of the draft individual reports issued to each LGA during the exit meetings. I wish to acknowledge that the discussions with the auditees have been very constructive. My Office intends to carry out a follow up at an appropriate time regarding necessary actions taken by the Government through the Minister responsible with Local Government Authorities in relation to the recommendations of this report.

The Local Government Authorities have a wide range of responsibilities for the provision of essential services and good governance for the citizens of their locality. In order to carry out these responsibilities, they have to collect revenues through taxes, licences, fees and other sources. In this respect, sound

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 vi

financial management is crucial if the Local Government Authorities are to convince the public that such revenues have been properly accounted for and utilized for the intended purposes, and have achieved the maximum benefit possible. The objective of carrying out the financial audit on the Local Government Authorities is to enable the Controller and Auditor General to form a professional opinion on the financial statements of LGAs and, in particular;

• To ensure that the existing LGA’s organization structure for adminstration, accounting, finance, technical matters and information technology are reliable enough to manage LGA funds propely.

• To appraise all financial operations undertaken by LGAs and to ensure that financial statements and activity reports are complete, accurate and reflect the state of resources managed under the LGAs precisely, and the surporting documentary evidence matches the expenditure to which it relates

• To check whether funds granted to the Councils through the Regional Administrative Secretariat for support of the LGAs have been used for the purpose intended.

• To certify whether the funds have been used exclusively to cover expenses relevant to the purpose of LGAs within the financial framework

• To ensure that Internal Audit and Audit Committee functions are in place and active in protecting LGAs funds.

• To ensure that the Tender Board and the Procurement Management Unit (PMU) are in place and functional.

Finally, I would like to express my gratitude to all those who created an enabling environment for me to discharge my

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 vii

Constitutional obligations with the timely completion of the Local Government Authorities report for the financial year ended 30th June, 2009.

Ludovick S.L. Utouh CONTROLLER AND AUDITOR GENERAL Office of the Controller and Auditor General, National Audit Office, Dar es Salaam, 26th March, 2010

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 viii

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 ix

Acknowledgement It is indeed my pleasure and great honour to extend my appreciation once again to the President of the United Republic of Tanzania, His Excellency, Dr. Jakaya Mrisho Kikwete and his entire Government, the Speaker of the Parliament of Tanzania Rt. Hon. Samwel Sitta (MP), the three Parliamentary Oversight Committees i.e PAC, LAAC and POAC, all Parliamentarians, the PMO-RALG, all Accounting Officers within the LGAs and the Development Partners for the invaluable support of our work. Their invaluable support and spirit of taking seriously matters raised in my reports with a common goal of disseminating and fostering a culture of financial discipline along with transparency and accountability within the government is plausible. It is my belief that, this kind of concerted efforts shall enhance Public Sector Financial Performance for useful contributions towards MKUKUTA and the Millennium Development Goals (MDGs).

Next, I would like to thank my staff for maintaining a strong relationship with the auditees, without compromising their independence. Whilst our position is entrenched in the Constitution, we would be powerless without credibility. Our audits have always been conducted without fear or favor and our contribution to public sector accountability has been growing and recognized both locally and internationally. I would like to thank every member of my staff for their endeavors to have worked so hard and diligently, to have once again been able to meet the statutory reporting deadline of my 2008/09 report.

I would also, like to express my gratitude and appreciation to all role players I have had the chance of working with during the course of this audit and the preparation of the report thereon. It has been an honor for me to have been a part of the process of once again fulfilling our mission and remain focused on our vision. I am certain that our values will be reflected in our determination to ever-improve our annual general reports; and I am optimistic that they shall continue adding value to all our stakeholders.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 x

In this respect I feel obliged to extend my regards to the Parliament through its oversight Standing Committees for their commitment in enforcing accountability in the use and management of public resources through their deliberations and resolutions on my reports. It is my belief that since this report is being issued on time, it will expedite the Committee’s hearings so that this oversight function is brought up to date.

The performance of functions and the exercise of the powers of the Controller and Auditor General require a strong institutional frame work equipped with tools of modern technology, trained and skilled personnel supported by a comprehensive legal regime. In this regard, the Public Audit Act No.11 of 2008 was enacted by the Parliament of the United Republic of Tanzania and became operational on 1st July, 2008. I thank the Government and Parliament for facilitating the enactment of the Act.

Further, I extend my gratitude to the Development Partners particularly the Swedish National Audit Office (SNAO), the Government of Sweden through SIDA, the DPs through PFMRP project, AFROSAI-E and all well wishers who have contributed immensely towards the modernization of the Office.

I am equally indebted to all other stakeholders including the Permanent Secretary PMO-RALG, Paymaster General, the Treasury and all Accounting Officers of the LGAs for the much needed support, cooperation and information availed to me. I would also like to thank the Government Printer for expediting the printing of this report to enable its timely submission. The Media is another important group that I would like to thank. This is a group which makes possible my audit reports to reach many Tanzanians as required. By so doing they create awareness of what is contained in my reports once they are made public.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xi

The other group I would like to take time to thank is the public servants throughout Tanzania, whether in Local or Central Government or Public Authority Institutions. Their invaluable contributions being criticisms or praise should not be underestimated. I just hope that their inputs are reflected in my report whilst they still can see and appreciate that my office is striving hard in this transitional era with lots of reforms taking place nationally and globally.

Last but not least, I would like to thank staff members of my Office who have worked tirelessly towards the timely release of this report. Their commitment and dedication has been very inspirational to me. I urge them to uphold the team spirit they have demonstrated in their future endeavors. Finally, I would like to thank the Tanzania Public whom we ultimately serve. I strongly encourage the Tanzanian Public to ever continue demanding and pushing for greater transparency and accountability on the use of public resources in the Country.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xii

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xiii

List of abbreviations

A/C Account AAGs Assistant Auditors General ACGEN Accountant General ACT Local Government Finances Act No. 9 of 1982 AfDB African Development Bank AFROSAI-E African Organisation of Supreme Audit Institutions -

English Speaking CAG Controller and Auditor General CC City Council CHF Community Health Fund CIDA Canadian International Development Agency CSPD Child Survival Protection and Development DAP Director of Administration and Personnel DC District Council DDC Dar es Salaam Development Coorperation DPs Development Partners EAMEATCO East African Meat Company F/Y Financial Year GDC German Development Cooperation GFS Government Finance Statistics GTZ German International Agency for Technical Cooperation HIV/AIDS Humman Immuno Deficiency Virus/Acquired Immune

Deficiency Syndrome IDA International Development Association IFAC International Federation of Accountants IFRS International Financial Reporting Standards INTOSAI International Organization of Supreme Audit Institutions IPSAS International Public Sector Accounting Standards ISA International Standards on Auditing JRF Joint Rehabilitation Funds KfW German Agency for International Financial Cooperation LAAC Local Authorities Accounts Committee LAFM Local Authority Financial Memorandum, 1997 LAMP Land Management Program LAPF Local Authority Provident Fund LGAs Local Government Authorities LGDG Local Government Development Grant LGFA Local Government Finances Act, 1982 LGLB Local Government Loans Board LGRP Local Government Reform Programme

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xiv

LLG Lower Level Government LPO Local Purchase Order MC Municipal Council MCC Millenium Challenge Coorporation MEATCO East Africa Meat Company MTEF Medium Term Expenditure Framework NAO National Audit Office PAA Public Audit Act No.11 of 2008 PEDP Primary Education Development Programme PFMRP Public Finance Management Reform Programme PMG Paymaster General PMO-RALG Prime Minister’s Office – Regional Adm. and Local

Government PO-PSM President Office – Public Service Management PPR Public Procurement (goods, works, non concultant

services and disposal of public assets by tender) Regulations, 2005

RAS Regional Administrative Secretary SAR South Africa Rand SNAO Swedish National Audit Office TASAF Tanzania Social Action Fund TAZARA Tanzania Zambia Railway Authority TBL Tanzania Breweries Limited TC Town Council TEMESA Tanzania Electrical, Machenical and Electronics Services

Agency WSDP Water Sector Development Programme

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xv

Table of contents Foreword ………………………………………………………………….……v List of abbreviations ……………………………………………….………...xiii Executive Summary…………………………………...……………………….xvii

CHAPTER ONE .................................................................... 1 1.0 Background and General Information ......................................... 1 1.1 Legal framework governing the Controller and Auditor General’s

Audit of Local Government Authorities Accounts ........................... 1 1.2 Applicable Audit Standards and Reporting procedures ..................... 4 1.3 Organization of LGAs’ audit work at NAO .................................... 5 1.4 Scope and applicable audit standards ........................................ 6 1.5 Statutory responsibilities of LGAs ............................................. 7 CHAPTER TWO ................................................................... 9 2.0 Types, Basis and Trend of Audit Opinions .................................... 9 2.1 Basis of Opinions issued ......................................................... 9 2.2 Audit opinions ..................................................................... 9 2.3 Basis of expressing other than unqualified audit opinion ................. 10 2.4 Analysis of audit opinions for LGAs ........................................... 13 CHAPTER THREE ................................................................ 19 3.0 Presentation of Financial Statements and Analysis of Audit Results .... 19 3.1 LGAs with unqualified opinion ................................................ 19 3.2 Councils with unqualified opinion with emphasis of matter ............. 19 3.3 Council’s with Qualified Opinion ............................................. 53 3.4 Council with Adverse Opinion.. ............................................... 95 3.5 Financial statements preparation process .................................. 96 CHAPTER FOUR ............................................................... 117 4.0 Financial and Assets Management; Good Governance and Internal

Controls Systems in LGAs .................................................... 117 4.1 Follow up of implementations of the previous years’ auditor’s

recommendations on General and Individual LGAs reports ............. 117 4.2 Assessment of Information Technology (IT) Control Environment in

LGAs ............................................................................. 123 4.3 Cash Management ............................................................. 131 4.4 Management of Non Current Assets ........................................ 135 4.5 Outstanding debtors ......................................................... 143 4.6 Outstanding Creditors ....................................................... 144 4.7 Missing revenue earnings receipt books ................................... 145 4.8 Revenue collection not remitted by Collecting Agents ................. 146 4.9 Payments made without proper supporting documents (Improperly

vouched expenditure) ………………………………………………………..………………147 4.10 Missing payment vouchers (Unvouched expenditure)…………………………148

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xvi

4.11 Unspent Development Funds/Grants Non utilization of Government grants) .......................................................................... 149

4.12 Payroll Audit ................................................................... 150 4.13 LGAs Financing Analysis ...................................................... 155 4.14 Operational Performance of Special Funds ............................... 159 4.15 20% Contributions not transferred to Villages/Wards ................... 162 CHAPTER FIVE ................................................................. 165 5.0 Review of Contracts and Compliance with Public Procurement

Processes in LGAs ............................................................. 165 5.1 Introduction .................................................................... 165 5.2 Effectiveness of Procurement Management Unit (PMU) ................. 166 5.3 Appraisal of Contract management and procurement of goods, works

and services in LGAs .......................................................... 167 CHAPTER SIX ................................................................... 171 6.0 Results of Special Audits ..................................................... 171 6.1 Introduction .................................................................... 171 6.2 A summary of matters arising from the Special Audits conducted in

financial year 2008/09 .................................................................................. 171 CHAPTER SEVEN .............................................................. 187 7.0 Performance Review of Donor Funded Projects in LGAs ................ 187 7.1 Introduction .................................................................... 187 7.2. Audit Results of the Tanzania Social Action Fund (TASAF) ............. 187 7.3 Water Sector Development Program (WSDP) ............................. 200 7.4 Roads Fund in LGAs ........................................................... 210 7.5 CIDA Financing for Health and HIV/AIDS ................................... 212 CHAPTER EIGHT ............................................................... 213 8.0 Performance Evaluation of Projects Under LGDG ........................ 213 8.1 LGDG’s projects performance evaluation review ........................ 213 8.2 Unsatisfactory workmanship on the construction of community

facilities/projects ............................................................. 232 CHAPTER NINE ................................................................ 237 9.0 Conclusions and Recommendations ........................................ 237 9.1 Conclusion ...................................................................... 237 9.2 Recommendations ............................................................. 242 Annexure ....................................................................... 248

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xvii

Executive Summary

This part of the report gives an overview of the General Report followed by major irregularities and weaknesses noted during the course of our audit, summary of recommendations and highlights the structure of this report.

A. Overview

We have completed the audit of the financial statements for Local Government Authorities for the financial year ended 30 June, 2009. The summary of important findings of the audit is contained in this general report and the details of the same have been issued separately in the management letter of the individual respective Councils.

Generally, it is worth mentioning upfront that the LGA’s financial reporting for the financial year 2008/09 has considerably improved as compared to the accounts of the financial year 2007/08. The obvious reasons which have facilitated inter-alia this improvement include the following:

Following a bold decision of adopting wholesale the International Accounting Standards effective 1st July, 2004 by the Accountancy Professional Board in Tanzania, that is the National Board of Accountants and Auditors (NBAA), the Government through the Permanent Secretary PMO-RALG issued a directive vide letter Ref.No. CA:26/307/01A/79 dated 28th September, 2009 instructing all LGAs in the country to prepare their accounts in accordance with the International Public Sector Accounting Standards (IPSAs) - accrual basis of accounting beginning this financial year 2008/2009.

Adoption of these standards provides the basis for competent financial reporting accompanied by more

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xviii

disclosures which are very useful to users of financial statements for their decision making.

PMO – RALG took the initiative and made a decision of training Council officers entrusted with the duty to prepare financial statements basing on the adopted IPSAS – accrual basis of accounting.

A single guideline for the preparation of financial statements for 2008/09 was issued by PMO – RALG as opposed to the 2007/08 when LGAs experienced a multiple conflicting and contradicting guidelines from different unreliable sources.

A participative audit approach introduced by the Office of the Controller and Auditor General has been well received by auditees including LGAs. In this approach auditees are taken on board from the planning stage of the audit to issuing the audit reports.

PMO – RALG has been pro-active in issuing guidance materials to all LGAs on how to rectify shortcomings basing on best practices instead of waiting for changing the whole guiding legislations.

B. Major irregularities and weaknesses noted during the

course of our audit

Inspite of the noted improvements in financial reporting in LGAs, through our audit reviews, which involved enquiring, examining, investigating as we considered necessary under the circumstances we were able to come up with the following major irregularities and weaknesses:

• Periodic checks not carried out by the Council management to confirm the validity of all payroll entries as a result payments of salaries to retired, absconded, resigned and terminated employees were paid through their bank accounts without being detected. Such payments are very difficult to recover once detected since the money would have already been drawn and spent by the beneficiaries.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xix

• Unspent balances for the preceding financial year were not subsquently brought forward to the Statement of Capital Expenditure and its financing for the year under review.

• Payments were made to various suppliers of goods and services without calling for competitive bidding or at least three quotations contrary to the requirements of Reg. 4(2) (b) of the Local Government Authorities’ Tender Board (Establishment and Proceedings) Regulations, 2007.

• Payment vouchers aggregating to Shs.2,526,117,587 from 33 Councils were not availed for audit and payments amounting to Shs.5,313,071,671 from 62 Council’s were not supported by proper documentation to enable verification of the payments for authenticity and occurrence as per Order No. 5(c) of the Local Authority Financial Memorandum of 1997. We were thus uncertain as to whether such payments were actually incurred and are related to Council’s activities.

• Most of the Councils did not transfer 20% of the abolished taxes to Villages contrary to Government instructions.

• 1,341 fixed receipt books and open receipt books used to collect revenues were not availed for audit verification from 50 Councils contrary to Order No. 101 of LAFM 1997.

• Laxity in control over contract payments and supervision of Councils projects including construction works by Councils management.

• Unclaimed salaries amounting to Shs.1,755,207,927 in respect of 58 Councils was not surrendered to the Treasury as per directives given through Circular Letter No. EB/AG/5/03/01/VOL.VI/136 dated 31st August 2007.

• Current liabilities amounting to Shs.1,114,230,706 in respect of employees’ statutory contributions to LAPF from 20 selected Councils were not disclosed in the financial statements.

• Non clearance of outstanding items in the bank reconciliation.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xx

• Misstatements of the financial statements due to improper recording of accounting transactions and accounting treatments.

• Although the Councils had established Internal Audit Units to oversee the Internal Control system within the Councils, still we have noted some weaknesses including understaffing and inadequate coverage of auditable areas.

• Councils did not prepare the CHF and Women and Youth Revolving Fund statements to show the financial position of the Fund. This is contrary to the requirements of Order 84 (iii) of the Local Authority Financial Memorandum, 1997

• Trend of outstanding matters from the previous years which remained unresolved is as shown below:

F/ Year Amount of outstanding

matters (Shs) No. of Councils

involved 2006/2007 4,643,565,831 52 2007/2008 32, 903,395,306 112 2008/2009 53,463,558,647 126

The above trend of events is disappointing in the sense that given the amount of energy, resources and efforts devoted in improving financial reporting in LGAs, the amount of outstanding matters and even the number of LGAs involved is supposed to decrease and not increase as reflected on the table above.

• Non collection of revenue from internal sources including:

- Outstanding Billboards fees Shs.1,960,425,011 in respect of 5 Councils not collected

- Revenue from collecting agents Shs.1,095,113,399 in respect of 43 Councils was not remitted to the Council

- Revenue from produce cess Shs.313,887,389 in respect of 2 Councils not collected and

- Shs.2,063,206,119 accruing from Cashewnut Export Levy from 7 Councils not recovered.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxi

Non collection of revenue from internal sources is due to laxity in internal control and monitoring of revenue collections accruing from the Councils.

• In addition, analysis of the type of opinions issued to LGAs

in the 2008/2009 as compared to 2007/2008 is summarized in the table below:

Councils

Unqualified opinion

Qualified opinion Adverse opinion Total

2007/08 2008/2009 2007/08 2008/09 2007/08 2008/09 2007/08 2008/09

City Councils

3 - 1 4 - - 4 4

Municipal Councils

7 10 10 7 - - 17 17

Town Councils

4 4 2 2 - - 6 6

District Councils

58 63 48 42 - 1 106 106

Total 72 77 61 55 - 1 133 133

Perce-ntage

54% 58% 46% 41% - 1%

Notably, there is only one (1) Council, which has been given an Adverse Opinion during the year under review. This scenario has been attributed by the fact that when we were conducting audit at Kilosa District Council it transpired that our scope of revenue and expenditure verification was limited as we were unable to verify several expenses incurred and revenue collected. There were 744 missing revenue earning receipt books and payment vouchers aggregating to Shs.1,000,002,020, which we could not verify. Under the circumstances we have decided to conduct a Special Audit of Kilosa District Council.

C. Summary of Recommendations (i) Non-Collection of revenue from internal own source

During audit, we noted laxity in internal control over collection of revenues from internal sources in LGAs. We

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxii

recommend that PMO – RALG should come up with enforceable guidelines on all contracts entered by LGAs. The expectation is that these guidelines will point out the minimum criteria to be met by the Council management before even presenting the suggestions to Council Committees which involves Councillors. Also, Councils should seriously collect internal sources of revenues to build financial base and independence. There should be a mechanism to enforce Councils to collect all revenues due in the respective year. Respective Council Treasurers should make adequate financial and accounting arrangements to ensure the proper recording of all monies due to the Council and the proper collection, custody, and banking of such monies.

(ii) Option for Councils to utilize services from IFMS - EPICOR accounting system

The IFMS – EPICOR system being used by the Central Government is supported administratively by the Accountant General, whereas the same system being used by LGAs does not have a strong administrative and technical support in case of technical failure and for its sustainability.

We noted during audit of accounting records under IFMS – Epicor that, many Councils’ IFMS - EPICOR are either not operational or their utilization is still at low levels. We recommend that the Government should come up with the best ICT solution for LGAs.

(iii) Payment of salaries to Council employees through Payroll

We noted salaries being paid to non-existing employees. As previously recommended; that the concerned offices (LGAs, MoF, PO – PSM) responsible for paying Government employees’ salaries should closely work together to ensure prompt update of the payrolls. Also, the Treasury should not pay salaries to employees’ individual bank accounts

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxiii

without endorsement of the management of the Council concerned. The respective Council management should also strengthen their Salaries Sections to collaborate with the Heads of Councils’ departments to ensure that salaries are paid to the existing employees and also promptly providing inputs for updating the payrolls.

(iv) Updating the Local Government Legislations

LGAs operate within the prescribed legal frameworks. Some of these instruments include the Local Government Finances Act No. 9 of 1982 (revised 2000), Local Government (District Authorities) Act No 7 of 1982(revised 2000), Local Government Finances Act No. 9 of 1982 (revised 2000). These Acts are supported by the Local Authority Financial Memorandum of 1997 and Local Authority Accounting Manual of 1993. These legal frameworks are outdated. In order to have meaningful reforms especially on the adopted frameworks which are based on the best practices like adoption of IPSAS and establishment of Audit Committees, the outdated guiding legal framework also need to be repealed or amended to cope with the current demand.

(v) Reporting on Development Projects Management

It has come to our attention that many Councils are preparing projects implementation reports which does not have a base in the actual status of the concerned projects, hence misleading the decision making organs. In some extreme cases these reports are just reports prepared in the office without taking into account the real situation in the field. From this background, it is recommended that the project implementation reports which are discussed by Council’s Committees and LAAC should be declared as part

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxiv

of auditable reports and be submitted to the CAG along with the financial statements for audit purposes.

(vi) Sustainability of the adopted IPSAs – accrual basis of

accounting

To be assured of the sustainability of the adopted IPSAs – accrual basis of accounting, the Government should again consider the possibility of having an office entrusted with the functions of the Accountant General for LGAs. This Office will be equivalent to that of the Accountant General in the Central Government. Alternatively as earlier pointed out in my previous audit reports; is to extend the roles of the existing Accountant General to LGAs. This suggestion goes hand in hand with the Government decision to adopt IPSAS - accrual basis of accounting. The adopted IPSAS are usually very frequently updated; hence the LGA’s Accountant General will be a champion to ensure that the Councils adopt the changes as required.

(vii) Lack of Accountability of “Funds” operating under the

Council

PMO – RALG should guide Councils to prepare accounts of these Funds in order to have meaningful accountability mechanisms and attain the goal for establishing these Funds. Examples of funds operating under LGAs are Women and Youth Fund and Community Health Fund.

(viii) Top management of the Council should be employed under Renewable Contract Employment basis

Major irregularities and weaknesses in LGAs are the same year in and year out. In actual fact in real terms the financial management situation in LGAs is not improving as expected. In order for the Government’s philosophy of decentralization by devolution (D by D) to succeed, the country needs very strong and committed leadership in the

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxv

LGAs. The current employment framework of permanent and penshionable system has failed to provide that kind of leadership in the LGAs. Hence, in order to strengthen the Councils’ management, the appointing authority should shift from the permanent and penshionable employment system to the contract and renewable employment system of the Councils’ top leadership. This system should start by having performance contracts with predetermined performance deliverables during the tenure of office by the top management of the LGAs. Re-appointment should be performance based and should continue until one reaches retirement age. Such a system will allow the Government to weed out the non performers before they cause too much damage to the Councils they are serving. This will expectedly make the top managers fully responsible for coming up with the workable strategies and plans which will bring an obvious impact to the society being served while improving public financial management in our LGAs. This will also put into practice the D by D philosophy of the Government, whereby people will be motivated to participate in development activities and demand to be led by managers who are accountable.

D. Structure of the Report The LGA’s General report on the financial statements for financial year 2008/09 has been arranged in nine (9) chapters as summarized below:

Chapter 1: Background and General Information

This chapter provides detailed information on the Legal framework governing financial reporting in LGAs namely; the Constitution of the URT of 1977, the Local Government Finances Act No.9 of 1982 (revised 2000) and Public Audit Act No.11 of 2008. Other issues dealt with in this chapter are functions and responsibilities of NAO, reporting procedures, the scope of audit, standards applicable to the audit of LGAs in Tanzania and statutory responsibilities of LGAs.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxvi

Chapter 2 Types, Basis and Trend of Audit Opinions

This chapter provides an insight into the meaning of various types of audit opinions, which the Controller and Auditor General (CAG) issues on the audit of financial statements of LGAs, namely Unqualified Opinion, Qualified Opinion, Adverse Opinion and Disclaimer of Opinion.

Chapter 3 Presentation of financial statements and analysis of audit results

A detailed analysis of audit results of LGAs for the year 2008/2009 is given in this chapter. This includes reasons that have contributed to the type of audit opinions given to various LGAs in the year under review. The analysis of audit results has shown that out of 133 LGAs audited, 77 (58%) were given Unqualified Opinions, whereas 55 (41%) LGAs were given Qualified Opinions and one (1) Council has been given an Adverse Opinion.

Chapter 4 Financial and assets management; good governance and Internal Controls Systems in LGAs

This chapter highlights shortcomings and weaknesses observed in the financial and assets management inherent in LGAs. These include follow up on implementation of the previous years’ auditors’ recommendations on individual audit reports. In addition, this chapter gives analysis of cash and assets management, good governance and Internal Controls Systems in LGAs

Chapter 5 Review of contracts and compliance with public procurement processes in LGAs

This chapter deals with compliance with the Public Procurement Act No.21 of 2004 and its related Regulations, appraisal of procedures for

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 xxvii

procurements of goods, works and services in LGAs and other procurement irregularities observed by auditors during the course of audit of the LGAs.

Chapter 6 Results of Special Audits This chapter gives highlights on the CAG’s

rationale of conducting Special Audits in LGAs and also summarises the outcomes of special audits carried out in 2008/09. During the year under review, eight (8) Special Audits were conducted based on the Terms of References given by the CAG and results communicated to the management of the respective LGAs and other Government Institutions for further actions.

Chapter 7 Perfomance review of Donor funded projects in LGAs

This Chapter gives highlights on the auditors’ reports and specifically on salient issues noted during audit of the following donor funded projects i.e TASAF, Roads Fund, Water Sector Development Programme and CIDA Financing for Health and HIV/AIDS.

Chapter 8 Performance evaluation of Projects under LGDG This chapter deals with the critical analysis and

evaluation of LGAs selected projects namely: Health, Schools, Administration works and small water services.

Chapter 9 Conclusions and Recommendations This chapter covers concluding remarks and

recommendations for future improvements.

Controller and Auditor General (CAG) General Report on LGAs for 2008/09 1

CHAPTER ONE

1.0 BACKGROUND AND GENERAL INFORMATION

1.1 Legal framework governing the Controller and Auditor General’s Audit of Local Government Authorities Accounts

This report is issued in accordance with the requirements of Article 143(4) of the Constitution of the United Republic of Tanzania of 1977.

The report comprises of the results of audits of the financial statements of the Local Government Authorities for the year ended 30th June, 2009.

Pursuant to Article 143(2) (c) of the Constitution of the United Republic of Tanzania, I am required to perform audit, at least once in every year, and submit reports on the financial statements of the Government of the United Republic of Tanzania, financial statements prepared by all officers of the government of the United Republic of Tanzania, financial statements of all courts of the United Republic and the financial statements prepared by the Clerk of the National Assembly.

On the other hand, Section 45(1) of the Local Government Finances Act No. 9 of 1982 (revised 2000) specifies that, “The accounts of every District Council and of every Urban Authority shall be audited internally by an internal auditor employed by the authority concerned, and the external auditor for each of those authorities shall be the Controller and Auditor General” Also, Section 10 (1) of the Public Audit Act, 2008 gives mandate to the CAG to audit the LGAs. Section 45(4) of LGFA No. 9 of 1982 (revised 2000) on the other hand specifies that, “As soon as possible after the closure of the financial year of a Local Government


Authority, the authority shall submit its accounts for audit to the auditors, who shall complete the audit not later than six months after the closure of the financial year”.

Further, Section 45(5) of LGFA No. 9 of 1982 (revised 2000) specifies that, “Every authority shall permit the auditor to check any cash, investments or other assets in its possession or over which it has control and to have access at all times to all its accounts and all books, vouchers and papers relating to them”.

Furthermore, Sect. 48(1), (2) and (4) of the Local Government Finances Act No. 9 of 1982 states that “the auditor shall make and sign a report to the Local Government Authority on the accounts and the annual balance sheet and statement or abstract, and one copy of each of the report together with the annual balance sheet and statement or abstract or a copy of it shall be sent to the Minister, Regional Commissioner and the Director who shall table the report before the Full Council”.

The section further requires me to do the following:

a) To draw attention to every item of expenditure charged in the accounts which is not authorized by Law or which has not been sanctioned by the Local Government Authority.

b) To draw attention to any deficiency or loss incurred by the negligence or misconduct of any person accounting to any sum which has not been brought to account by such person.

c) To certify the amount of that unlawful expenditure, deficiency or loss, this has not been brought to account.

d) To submit a copy of the audit report of the LGAs to the Minister responsible for LGAs, National Assembly, Regional Commissioners and the Local Authorities Directors.


The audit results of the financial statements of the LGAs were submitted to the respective Council Chairpersons and copied to Council Directors who are the Accounting Officers of the LGAs. This report is the outcome of the summary of issues observed in the specific individual audit reports of each Council. We appreciate that the submitted financial statements of the LGAs for the year ended 30th June, 2009 were prepared based on IPSAS accrual basis of accounting and Part iv of the Local Government Finances Act No. 9 of 1982 (revised 2000), and in accordance with the provisions of Order No. 53 of Local Authority Financial Memorandum (LAFM) of 1997 as the applicable reporting framework for Local Government Authorities.

The accountancy profession in Tanzania under the National Board of Accountants and Auditors (NBAA) with the full support of the Government made a bold decision by pronouncing that effective 1st July, 2004 Tanzania should adopt IPSAS basis of accounting, therefore requiring Local Government Authorities to prepare their financial statements based on IPSAS accrual basis of accounting. It therefore meant that, the financial statements of LGAs should be prepared in accordance with the International Public Sector Accounting Standards (IPSAS) - accrual basis of accounting.

A complete set of financial statements prepared under IPSAS - accrual basis of accounting and submitted for audit should include the following:

(a) A statement of financial position; (b) A statement of financial performance (c) A statement of changes in net assets/equity; (d) A cash flow statement; (e) A statement of comparison of budget Vs actual

amount by nature (f) A statement of comparison of budget Vs actual

amount by function (g) Notes to the financial statements


In lieu of the above, effective this financial year 2008/2009 and in accordance with the directive from the Prime Minister’s Office vide Circular letter with Ref. No.CA:26/307/01A/79 dated 28 September, 2009 directed all Local Government Authorities to prepare their accounts based on IPSAS accrual basis of accounting.

Furthermore, Order No. 90 of the Local Authority Financial Memorandum (LAFM) 1997 also, requires the Councils to publish at their own offices and in local newspapers within their areas of jurisdiction the following:

(i) the audited consolidated statement of financial

position (balance sheet) and statement of financial performance (income and expenditure)- abstract of accounts; and

(ii) any signed audit report on the accounts.

I consider the adoption and publication of accounts and audit report by LGAs as an opportunity for LGAs to encourage greater communication and dialogue with their inhabitants on their achievements and future direction.

The National Audit Office is the Supreme Audit Institution (SAI) of the URT which has a unique responsibility to ensure that there is proper accountability, financial discipline and transparency within the United Republic of Tanzania. Furthermore, NAO has a unique responsibility to provide audit reports of good quality and ensure that the reports are issued within the statutory due date. These reports give detailed results of revenue collections and expenditure analysis and governance issues of the Local Government Authorities.

1.2 Applicable Audit Standards and Reporting procedures

Being a member of the International Organization of Supreme Audit Institutions (INTOSAI) and AFROSAI-E, NAO is required to comply with the requirements of carrying out audits of the financial statements of Local Government


Authorities in conformity with the INTOSAI standards and the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC).

During my audit, I critically examined and verified the financial statements together with their supporting documents to establish their validity to be charged as Councils’ expenditures. At the end of the audit, various audit opinions were expressed on the financial statements based on the findings.

In compliance with the requirements of Article 143 (4) of the Constitution of the URT of 1977 (Revised 2000), this report has been submitted to the President of the URT on 26th March, 2010.

Individual audit reports of the LGAs have been submitted to the respective Council Chairpersons and copied to the Directors of these LGAs who are required to table them to their respective Full Councils.

1.3 Organization of LGAs’ audit work at NAO

The report provides a summary of the final results of the audit exercise, which was carried out by the Office throughout the country. In order for my Office to be able to handle this enormous task of auditing all the LGAs in the country, it has established Regional Offices in all twenty one (21) Regions of Tanzania Mainland for administrative purposes. These Regional Offices are headed by the Resident Auditors who report to Zonal Auditors. For the purpose of auditing LGAs in the country, the regions in the country have been grouped into zones under the supervision of Zonal Auditors who report to the Assistant Auditor General (Regions) stationed at the National Audit Office (NAO) Headquarters. According to the organization structure of NAO, the Assistant Auditor General reports directly to the Controller and Auditor General. For the purpose of audits of LGAs currently NAO operates with five (5) zones as shown on the following organization structure:-


1.4 Scope and applicable audit standards

1.4.1 Scope of audit Audit scope refers to the activities covered by an audit. Audit scope includes, where appropriate audit objectives, nature and extent of auditing procedures performed, period of audit and related activities not audited in order to define the boundaries of the audit. The main objective of conducting the audit is to enable the CAG to express a professional opinion on the financial statements of the LGAs for the period ended 30th June 2009. The audit covered the evaluation of the effectiveness of the financial accounting system and internal control systems over their activities, examination and verification of the accompanying financial statements, the performance report and other auditing procedures as was considered necessary under the circumstances for the purpose of forming an opinion on the financial statements. The audit

Controller and Auditor General

Coastal Zone Dar es Salaam City is head office of

Zone one

Central Zone Dodoma is Head

office of Zone two

Northern Zone Arusha is Head Office of Zone

Five

Dodoma Singida Tabora Kigoma

Morogoro

Southern Zone Mbeya is Head Office of Zone

Four

Lake Zone Mwanza is Head office of Zone

Three

Dar es Salaam Mtwara Lindi Pwani

Mwanza Kagera Mara

Shinyanga

Mbeya Ruvuma Iringa

Sumbawanga

Arusha Kilimanjaro

Tanga Manyara

Assistant Auditor General (Regions)


was carried out on a risk based approach, therefore the audit findings are confined to the extent that records, documents and information requested for the purpose of audit were made available to us.

1.5 Statutory responsibilities of LGAs

The responsibility for the preparation of the financial statements for audit purposes lies with individual LGAs. Sect. 40(1) of the Local Government Finances Act No. 9 of 1982 states as follows, “Subject to the following provisions of this section, every LGA shall cause to be provided, kept and maintained books of accounts and records with respect to:

(a) the receipt and expenditure of money by and other financial transactions of the authority;

(b) the assets and liabilities of the authority, and shall cause to be made out for every financial year a balance sheet showing details of the income and expenditure of the authority and all its assets and liabilities”.

Therefore, the preparation and submission of LGA’s accounts is a legal requirement as per the Local Government Finances Act No. 9 of 1982 (revised 2000). The management of LGAs must comply with this Act.

LGAs annual audit reports provide information to assist citizens to assess the Council’s performance and to hold Council management to account for their performance. Timely information is necessary for this to occur. This is the whole essence of accountability in the use of public resources.

The publication of audited financial statements shall be made within six months of the receipt of the report of the auditor in compliance with the requirements of Sect. 49 of the Local Government Finances Act No. 9 of 1982 (revised 2000).


LGAs in the country are expected to have in place effective financial reporting arrangements that underpin financial statements preparation procedures including the early recognition and resolution of issues that impact on the financial statements themselves. The results of my audit this financial year, have shown that those LGAs that maximized the alignment of their year end financial reporting processes with effective internal control systems, segregation of duties in the Finance Department, prepared monthly bank reconciliations, instituted proper custody of accountable documents etc were more successful in meeting the deadlines for submission of better quality financial statements for audit purposes, than those which did not.


CHAPTER TWO

2.0 TYPES, BASIS AND TREND OF AUDIT OPINIONS

2.1 Basis of Opinions issued

To comply with statutory requirement, I am obliged to give assurance to stakeholders of the respective Councils whether the information given in their financial statements present fairly, the results of the operations, cash flows and financial position of the Councils for the year ended 30 June 2009. This certification provides to stakeholders the audit assurance as to the genuineness of the financial operations of the Councils including the Council’s compliance with prescribed requirements. Based on the International Standards on Auditing (ISA) and INTOSAI standards, the following opinions were issued as a measure of the assessment given on the financial information presented. These are unqualified opinion, unqualified opinion with emphasis of matter, qualified (except for) opinion, adverse opinion and disclaimer of opinion.

2.2 Audit opinions

2.2.1 Definition of Audit Opinion An audit opinion expresses a view as to whether or not the financial statements audited have been prepared consistently using appropriate accounting policies, in accordance with relevant legislation, regulations, and applicable accounting standards/principles.

The opinion also has to state whether there is adequate disclosure of information relevant to the proper understanding of the financial statements or not.

For purposes of accountability and transparency to the National Assembly, regardless of the opinion given in the individual audit reports, audit findings are narrated alongside their implications, recommendations,


management responses, and auditors’ comments. I believe that this form of presentation of audit findings and reporting, promotes the obligations conferred to the Accounting Officer to prepare the financial statements and to myself.

2.2.2 Types of Audit Opinion I now give a detailed explanation of the type of audit opinion issued as follows:

2.2.2.1 Unqualified Opinion An unqualified opinion is issued when I am satisfied that the Council, Department or Agency’s financial statements are presented fairly in all material respects; in accordance with applicable financial reporting framework and applicable accounting principles and standards. However, issuance of an unqualified opinion does not mean that the Council has a clean wholesale system of internal control. It only means that nothing has come to my attention of the auditor to warrant a qualified opinion. Accordingly, each Council issued with an unqualified opinion has also been issued with a management letter giving details of the material issues that are equally potential to risks of financial and/or stores losses which if not addressed could lead to qualified opinion in the future.

2.3 Basis of expressing other than unqualified audit opinion

2.3.1 Unqualified opinion with Emphasis of Matter In certain circumstances, the audit report may be modified by adding an emphasis of matter paragraph to highlight matters affecting the financial statements. The addition of such emphasis matters paragraph does not affect the audit opinion. The paragraph is normally included after the opinion paragraph and ordinarily refers to the fact that the opinion is not qualified in this respect.


An emphasis of matter paragraph is appended in each situation, which draws the immediate attention of the Accounting Officer warning him/her about those matters requiring his/her urgent attention. However, the main objective of the emphasis of matter paragraph is to bring closer understanding of the situation obtained in the audited entity, despite the unqualified opinion given.

2.3.2 Qualified Opinion A qualified opinion is issued when I conclude that an unqualified opinion cannot be issued but due to the disagreement with management or limitation of scope is not so material and pervasive and except for the effect of the matter giving rise to the modification of audit opinion; the financial statements were prepared in accordance with the applicable financial reporting framework and not misleading thus they do not require an adverse opinion.

2.3.3 An Adverse Opinion An adverse opinion is issued when the effect of a disagreement with Management has a material and pervasive effect on the financial statement such that the financial statements are not prepared in accordance with the applicable financial reporting framework or are misleading as a whole. In this case, a qualified opinion is not adequate to disclose the misleading nature of the financial statements.

2.3.4 Disclaimer of Opinion A disclaimer of opinion is expressed when I am unable to obtain sufficient appropriate audit evidence in the financial statements so prepared and submitted. In this case, the situation has material effect on the financial statements such that I am unable to express my opinion on the financial statements.

In the circumstances that a disclaimer of opinion is issued on the financial statements, disclosure is made of any unknown material misstatements or other reservations


about the fair presentation of the financial statements in conformity with the applicable reporting framework.

2.3.5 Circumstances that may lead to expressing an audit opinion rather than an Unqualified Opinion

(a) Limitation of Scope of Audit When I am unable to obtain full information regarding the financial statements’ preparations or documents and the scope of audit is limited to full access of documents or such financial statements, and that I am unable to issue my Opinion, and then there may be existence of the following matters.

• Payments are made without payment vouchers. • Goods or services are procured without being

supported by delivery notes. • Payments were not beng supported by proper

documents. • Revenue receipt books not submitted for audit

verification. • Assets owned or procured were not supported by

analysis schedules. This may lead to doubtful existence of the Assets.

• Unavailability of confirmation from the payees on the payment made. (acknowledgement of payments)

(b) Disagreements in best practice on records keeping

and non compliance with Laws and Regulations

Order Nos. 9 through 16 of the Local Authorities Financial Memorandum (LAFM) 1997 requires the Council to establish and support a sound system of internal control within the Council. Order No. 53 places responsibility on the Council management to prepare the financial statements in accordance with law, regulations, directives issued by the Minister responsible for Local Government and the Local Authority Financial Memorandum.


Disagreement with management on best practice on records keeping and compliance with laws occurs under the following situations.

• The assets owned by the LGAs are not recorded in the Fixed Asset Registers.

• Stores purchased and paid for but not recorded in stores ledger.

• Where there are no disclosures of bank balances in the books of accounts.

• When the accounting records are omitted, incomplete or in accurate.

• Where there is in adequate disclosure of accounting policies.

• When the LGAs use inappropriate accounting method such as in appropriate depreciation rate/charge.

• Procurement of goods, works or services not done in accordance to the Public Procurement Act No.21 of 2004 and its related Regulations.

2.4 Analysis of audit opinions for LGAs

This part intends to show the trend of audit opinions issued to LGAs over the period of two years starting 2007/08 to 2008/09. The idea behind this presentation is to compare the financial performance of Councils over the two years period. The analysis of types of Opinions issued to LGAs in the two financial years 2007/08 to 2008/09 has shown that a total of 133 LGAs audits has been finalized. Out of the 133 LGAs that were audited 77 (58%), have been given Unqualified Opinions whereas, in 2007/2008, 72 (54%) were given Unqualified Opinions. Out of the 133 LGAs audited, 55 (41%) have been given Qualified Opinion during the year under review (2008/2009) compared to 61 or (46%) in the previous year. On the other hand one Adverse Opinion was issued during the year under review while no Council issued with such kind of opinion in the previous financial year.


The main reasons for the Local Government Authorities (LGAs) not performing better mostly have been attributed by the following factors. • The submitted financial statements lack proper

disclosures as some of the items were not properly disclosed as per the requirements of IPSAS accruals basis of accounting thus resulting into difficulties in measuring performance of LGAs.

• Lack of close supervision on the part of Council management to supervise and monitor implementation of development projects being implemented at Lower Level Governments (LLG) i.e. Wards and Villages. Councils transferred funds to Wards and Villages without making follow-ups.

• The scope of audit has widened to encompass value for money aspects, payroll audit, risk management and information systems in LGAs.

• Increase of funds transferred to Councils under the arrangement of decentralization by devolution (D by D), which has high demand on capacity to manage the finances hence increased risks of mismanagement of such funds.

In view of the above analysis, we can conclude as follows:-

(a) During the year under review there were no Councils which received unqualified opinion without emphasis of matter.

(b) The number of Unqualified Opinions has increased from 72 (54%) in the year 2007/2008 to 77 (58%) during the year under review (2008/2009)

(c) The number of Qualified Opinions has decreased from 61 (46%) in the year 2007/2008 to 55 (41%) during the year under review (2008/2009). Of the 55 LGAs issued with Qualified Opinion mostly were attributed by:-


• Most of the Councils did not transfer 20% of the abolished taxes to villages contrary to the Government instructions.

• Periodic checks not carried out by the Council management to confirm the validity of all payroll entries as a result payments of salaries to retired, absconded, resigned and terminated employees were paid through their bank accounts without being detected.

• Unspent balances for the preceding financial year were not subsquently brought forward to the Statement of Capital Expenditure and its financing for the year under review.

• Payments were made to various suppliers of goods and services without calling for competitive bidding or at least three quotations in an effort to curb for enhanced costs, contrary to the requirements of Reg. 4(2) (b) of the Local Government Authorities Tender Board Regulations, 2007.

• Payment vouchers were not availed for audit and not supported by proper documentation to enable verification of the payments for authenticity and occurrence as per Order No. 5(c) of Local Authority Memorandum of 1997. We were thus uncertain as to whether such payments were incurred and are related to Council’s activities.

• Fixed receipt books and open receipt books used to collect revenue were not availed for audit verification contrary to Order No. 101 of LAFM 1997.

• Laxity in internal control over contract payments and supervision of construction works by Councils’ management.

• Unclaimed salaries not surrendered to the Treasury as per directives given through Circular Letter No. EB/AG/5/03/01/VOL.VI/136 dated 31st August 2007.

• Current liability in respect of employees’ staturoty contributions to LAPF not disclosed in the financial statements.


• Non clearance of outstanding items in the bank reconciliation.

• Misstatements of the financial statements due to improper recording of accounting transactions and accounting treatments.

• Non collection of revenue from internal sources including outstanding Billboards fees, property tax, produce cess fees and Cashewnut Export Levy not recovered. This is due to laxity in control and monitoring of revenue collections accruing from the Councils on internal sources.

• Revenue collected by Agents not remitted to the Councils.

(c) There is only one (1) Council, which has been issued with

an Adverse Opinion during the year under review. This situation has been facilitated inter-alia by the fact that our scope of revenue and expenditure verification was limited as we were unable to verify several expenses incurred. There were 744 missing revenue earning receipt books and payment vouchers aggregating to Shs.1,000,002,020. In the circumstances, a Special Audit is on going.

The above information can be summarized in the table below:

Analysis of Audit Opinions issued to LGAs in 2007/2008 and 2008/2009

Councils

Unqualified opinion

Qualified opinion Adverse opinion Total

2007/08 2008/2009 2007/08 2008/09 2007/08 2008/09 2007/08 2008/09

City Councils

3 - 1 4 - - 4 4

Municipal Councils

7 10 10 7 - - 17 17

Town Councils

4 4 2 2 - - 6 6

District Councils

58 63 48 42 - 1 106 106

Total 72 77 61 55 - 1 133 133

Perce-ntage

54% 58% 46% 41% - 1%


A detailed list of LGAs and opinions issued for the financial years 2007/2008 and 2008/2009 is shown in Annexure 1.

Analysis of audit opinions issued during the financial years 2007/2008 and 2008/2009 can be represented in a form of a Histogram as shown below:-

0

10

20

30

40

50

60

70

2007/08 2008/2009

Comparison of Councils with Unqualified Opinion

City CouncilsMunicipal CouncilsTown CouncilsDistrict Councils

Chart No. 1 depicts a slight increase of Councils with Unqualified Opinion from 72 or (54%) in year 2007/2008 to 77 or (58%) during the year under review.

0

10

20

30

40

50

2007/08 2008/2009

Comparison of Councils with Qualified Opinion


Chart No. 2 depicts a slight decrease of Councils with Qualified Opinion from 61 or (46%) in year 2007/2008 to 55 or (41%) during the year under review.


0

0.2

0.4

0.6

0.8

1

2007/08 2008/2009

Comparison of Council with Adverse Opinion


Chart No. 3 depicts that only one Council (Kilosa DC) has been given an Adverse Opinion during the year under review. Our audit scope of revenue and expenditure of Kilosa District Council was limited as we were unable to verify several expenses incurred. There were no payment vouchers totaling Shs.1,000,002,020 and respective supporting documents for the various payments made to support activities carried out during the year. Also, 744 revenue earning receipt books were noted missing. Without supporting documents authenticity, occurrence and completeness of the transactions can not be verified. On the basis of this background, the CAG found it appropriate to decide to conduct a special audit of Kilosa District Council which is ongoing currently.


CHAPTER THREE

3.0 PRESENTATION OF FINANCIAL STATEMENTS AND ANALYSIS OF AUDIT RESULTS

3.1 LGAs with unqualified opinion

During the year under review there were no Councils which received unqualified opinion without emphasis of matter.

3.2 Councils with unqualified opinion with emphasis of matter

The following 77 Councils received unqualified opinion with emphasis of matter.

1. BARIADI DC • One tractor and eight motor cycles worth

Shs.53,112,000 not confirmed to have been delivered. • Procurement of Drugs and Medical supplies worth

Shs.23,502,600 not delivered. • Revenue collected by agents amounting to

Shs.29,497,700 were not remitted to the Council.

2. BUKOMBE DC • Payment of salaries to absconded and resigned

employees Shs.3,455,247. • Unutilized development funds for Construction of

classrooms at Bulumbaga, Kasozi and Shilabela Primary schools Shs.16,500,000

• Unutilized development funds for Procurement of school desks for Busambilo Primary school Shs.210,000

• Stores items not accounted for Shs.8,430,000

3. KISHAPU DC • Late submission of statutory contribution Shs.4,755,528

paid to LAPF related to employees’ terminal benefit. • Construction works in progress at Kishapu High School

Shs.97,616,402


• Construction works in progress at Mwakipoya, Igaga, Mipa and Bubiki Secondary Schools Shs.42,057,860

• Construction works in progress at Various Primary Schools teachers houses Shs.30,000,000

• Construction works in progress at Badi Dispensary Shs.2,018,000

• Construction works in progress at Kishapu DC Administration Block Shs.213,034,200

which need close supervision

4. MEATU DC

• Nugatory expenditure upon termination of contract Shs.128,493,790

• Payments not supported by proper documentation Shs.9,424,709

• Payments amounting to Shs.1,560,000 loaned/advanced between Council cash accounts without effecting refund to the respective accounts

• Salaries amounting to Shs.964,000 paid through bank accounts in respect of employees who were no longer employee of the Council

• Uncompleted construction works at Secondary and Primary school buildings Shs.77,409,042

• Uncompleted construction works at Dispensary Shs.2,199,800

• Uncompleted construction works at District Hospital Shs.3,566,000

5. SHINYANGA MC

• Development funds transferred to Primary Schools Funds totalling to Shs.5,700,000 were not acknowledged.

• Un presented cheques amounting to Shs.4,686,914 • Payments not supported by proper documentation

Shs.2,000,000 • Computers worth Shs.2,080,000 were procured and


paid for to one supplier through special imprest contrary to Order No.250 of the LAFM (1997).

• 6. KAHAMA DC • Uncompleted construction works at various Primary and

Secondary Schools Shs.169,000,000 • Revenue collected by Agents amounting to

Shs.2,087,400 not remitted to the Council • Delayed rendition of unclaimed salaries to Treasury

Shs.9,981,597

7. MASWA DC

• Motor Vehicles purchased and paid for but not delivered to the Council Shs.122,030,010

• Stores amounting to Shs.18,280,000 not supported by relevant supporting stores ledgers.

• Questionable Procurement of Stores items Shs.9,300,000.

• Payments not supported by proper documentation Shs.9,330,089.

• Unclaimed salaries not surrendered to Treasury through RAS Shinyanga Shs.5,346,099.46

• Unpresented cheques amounting to Shs.29,718,236.96 • Deposits in Transit amounting to Shs.12,064,177.91

8. SHINYANGA DC

• Loans and salary advances paid to newly appointed teachers not yet recovered Shs. 15,130,000.

• Unpresented cheque amounting to Shs.125,856,166 • Deposit in transit amounting to Shs.30,125,892 • A sum of Shs.100,000,000 was diverted funds for

construction of Solwa Mwakitolyo road instead of buying a speed boat for Mwakitolyo village.


9. BUKOBA DC

• Unpaid salaries Shs.16,563,105 not remitted to Treasury through Regional Administrative Secretary.

• A sum of Shs.39,026,750 paid from CDG Account was loaned by General Fund Education Account but not refunded.

• Development funds amounting to Shs.1,216,519,268 remained unutilized as at 30th June, 2009.

• Fuel worth Shs.10,424,000 could not confirm to have been utilized in the absence of motor vehicles log books.

10. BIHARAMULO DC

• Outstanding matters from previous years amounting to Shs.90,802,517 were not yet acted upon

• Nine Revenue receipts books issued to Revenue Collectors were not produced for audit inspection.

• Revenue collected by agents not remitted to the Council Shs.5,882,000

• Unclaimed salaries of Shs.18,719,910 for various payees who are no longer Government employees were not remitted to Treasury through Regional Administrative Secretary.

• Goods worth Shs.24,172,800 were ordered and paid for but were found to be partly delivered or undelivered.

• Fuel amounting to Shs.29,288,500 could not be confirmed to have been utilized in the public interest in absence of issuing particulars and logbooks.

• Procurements worth Shs.20,765,500 were made without approval of the Council’s Tender Board

11. BUKOBA MC

• Payment of Shs.5,065,000 made to Wards members not supported by signed attendance registers or sheets.



• Computer and printer worth Shs.2,320,000 were not physically found in the Council’s Office.

• Utilization of fuel purchased and paid for worth Shs.5,808,840 could not confirmed due to non availability of vehicle Log books.

• Contract sum of Shs.16,722,975.60 differs with the actual payment made of Shs.17,656,100.

12. MISENYI DC

• Outstanding previous year’s matters amounting to Shs.4,924,457 remained unresolved.

• Overpayment of salary arrears Shs.8,519,160 made to ten (10) officers without recovery.

• Payments in bank not in cashbook amounting to Shs.2,582,844

• 25 revenue earning receipts books were not produced when called for during audit inspection.

• Revenue collected by agents not remitted to the Council Shs.6,939,850.

• Payments not supported by proper documentation Shs.40,943,500.

• Fuel worth Shs.6,185,400 could not confirmed to have been issued and utilized in the absence of log books.

• Fuel worth Shs.2,169,570 issued to private motor vehicles.

• Additional payment of Shs.46,252,050 for purchase of motor vehicle caused by delay in procurement process.

13. MULEBA DC

• Outstanding previous year’s matters amounting to Shs.90,332,316 remained unresolved.

• Three (3) revenue earning receipt books were not produced for audit inspection.

• Salary arrears were overstated to the tune of Shs.39,703,652

• Unclaimed salaries amounting to Shs.39,094,404 relating to retirees, absentees and deceased employees


were not remitted to Treasury thorugh Regional Secretariat.

• Night out allowances paid not indicating dates of travelling Shs.5,764,000.

• Stores items worth Shs.18,866,350 were not recorded in the Stores Ledger

14. GEITA DC

• Cheques not presented to the bank amounting to Shs.1,020,634.

• Contract documents for routine maintenance were not made available to auditors.

• Expenditure incurred without budgetary provision Shs.15,216,687.

15 MAGU DC


• Irregular Payment of salaries Shs.7,814,272

16. KWIMBA DC

• Stores purchased and paid for but not accounted for Shs.11,860,000.

• Plots sales revenue collections totaling Shs.24,236,280 were deposited into CSPD account instead of relevant land development account

• Payments amounting to Shs.1,415,000 were made without supporting documents.

• Council officers were double paid for the months of April and May amounting to Shs.1,285,800.

• Unclaimed salaries worth Shs.48,658,484 pertaining to


deceased and retired employees were not confirmed to have been surrendered to Treasury.

17. MISUNGWI DC

• Receipts in cash book not in Bank Shs.5,923,666 • Payment in Bank not in cash book Shs.993, 650 • Salaries amounting to Shs.48,387,390 were paid to

deceased and retired employees. • Uncompleted construction of District hospital ward and

DED residential house

18. SENGEREMA DC

• Acting allowances of Shs.950,940 paid to an officer while acting the post of District Treasurer was not authorized by the Accounting Officer.

• Overpayment of transport of personal effects of Shs.1,213,500 paid by the Council to two officers upon on transfers by applying a wrongly rates.

• Doubtful payments of extra duty allowances of Shs.3,285,000 paid to the Council’s employees.

• Wrongly classification of accounting codes from health account to meet expenses of the Council for Shs. 42,581,447.

19. MUSOMA MC

• Motorcycles and Motor vehicles worth Shs.73,574,255 not delivered.

• Payments amounting to Shs.98,659,241 have not been supported with relevant supporting documents

• Poor construction of side drains at Nyakato - Kigera Road Shs.18,010,000.

• Salaries amounting to Shs.52,297,597 relating to employees who have either retired, deceased or have absconded from Council’s service continued to be paid through their respective personal bank accounts.


• Purchase of goods and services without inviting quotations Shs.78,752,000

20. MUSOMA DC • Three revenue earning receipt books were not

produced for audit and Revenue collected on them could not therefore be verified to have been accounted for.

• Expenditure of Shs.18,753,100 was not supported by relevant supporting documents.

• Stores valued Shs.24,329,500 ordered and paid for, but were not accounted for in the relevant stores ledgers;

• Inter-transfer of funds between one accounts to another in form of a loan amounting to Shs.34,500,000 for which no reimbursement to giving accounts was evidenced.

• Salaries amounting to Shs.64,473,298 are suspected to be paid to Retired, terminated and resigned officers through their personal bank accounts.

• A sum of Shs.3,793,687 was recorded in the Council’s Cashbook but was not evidenced to have been banked.

21. BUNDA DC • Nine (9) general revenue receipts books used or unused

were not returned and available for audit. • A sum of Shs.1,000,000 paid to an officer as a loan to

enable him to attend training sponsored by Grummet Fund.

• Construction of male Ward at Manyamanyama Health Centre, Bunda at the contract sum of Shs.97,359,200 have not been completed as planned.

• Rehabilitation of Ikizu Health Centre at contract sum of Shs.27,520,800 was not completed

• Accounts have been overdrawn to the tune of Shs.99,868,264 without the prior express approval of the Minister.

• Community Health Fund Contributions from the citizens amounted to Shs.13,557,675 were not


utilized/distributed for health development activities. • Payment vouchers amounting to Shs.10,476,000 were

not made available during audit. • Payment amounting to Shs.32,617,224 were not

supported with relevant supporting documents. • The Council had already paid the contractor

Shs.4,985,000 for rehabilitation of Manyamanyama Health Centre without receive service.

• A sum of Shs.9,304,848 in respect of September, 2008 salaries was paid to newly employed Teachers from General Fund Account instead of educations account without refund.

• The 8 officers were appointed as members of PMU instead of employing permanent staff.

• Most of the members can not be accountable for any procurements mistakes because they are not professional in procurement.

• PMU lacks supporting and administrative Staff

22. TARIME DISTRICT COUNCIL

• Maintenance of Motor Vehicle were made to the private garage without prior approval Shs.11,472,300

• Revenue collected by agents not remitted to the Council’s Shs.1,851,000

• Payments aggregating to Shs.11,121,700.00 were erroneously paid from the Health & CDG accounts instead of the General Fund & TASAF Account

• Payment vouchers worth Shs.44,538,335 recorded in the cash books were not produced for audit scrutiny

• Payments amounting to Shs.13,683,657 were not properly supported by relevant documents.

• Salaries amounting to Shs.89,166,635 relating to employees who have either retired, deceased or have absconded from Council’s service continued to be paid through their personal bank accounts


23. SERENGETI DC

• Unutilized Development Funds without showing detailed analysis of unimplemented projects

• Unauthorised expenditure Shs.907,612,347 • One classroom and two Teachers’ houses at Machochwe

and Kitunguruma Secondary School valued at Shs.5,000,000 not completed

• Construction of Teacher’s house at Manchira Secondary School not completed Shs.5,829,255

• Two Teacher’s houses at Mugumu Secondary School not completed Shs.12,838,145

• Dinning Hall at Kisaka Secondary School not completed Shs.3,000,000

• Receipt in bank not C/book Shs.7,204,702 • Unpresented Cheques amounting to Shs.321,629,134 • Payment in Bank not in cash book amounting to

Shs.196,224,635 • Receipt in cash book not bank amounting to

Shs.731,121 • Missing payment vouchers amounting to

Shs.15,054,000 • Payments not supported by proper documentation

Shs.15,125,300 • Funds transferred from various accounts to general

account not refunded Shs.14,680,000 • Unclaimed salaries not remitted to Treasury through

RAS Shs.39,411,359

24. MAFIA DC

• A sum of Shs.18,572,000 was paid to Suppliers for supplying various materials and maintenance of the Council motor vehicles without approval.

• A sum of Shs.49,600,000 received from Treasury for purchase of motor vehicle during the year 2006/2007 but spent in during 2008/2009 for other activities

• Advances to the Council’s employees, amounting Shs.1,700,000 not yet recovered.


• Statutory deductions for financial year 2008/2009 amounting to Shs.5,285,600 were not paid by the Council to LAPF

25. KISARAWE DC • Revenue collected by agents not remitted to the

Council Shs.49,187,500 • Revenue amounted to Shs.1,098,510 collected by

Water department and Natural Resources Departments not banked

• Unpaid LAPF Contributions amounting to Shs.51,455,018

• No insurance coverage for eight Council’s vehicles • Stores procured but not accounted for – Shs.7,496,400 • Construction of OPD Building at Chole (LGCDG Funds)

not completed Shs.8,841,840 • Construction of Kiluvya dispensary not completed –

Shs.14,500,000 • Tondoroni Water Supply Project Shs.37,000,000 not

completed. • Spot improvement works Chole – Sofu – Gwata Road

38km and Kazimzumbwi – Mzenga road 31km Shs.12,570,000 in Works valued to Shs.12,570,000 in respect of drainage works and Heavy Grading had not been executed.

• Construction of Health Centre (MCH) at Chole for Shs.28,000,000 not yet started

• Construction of Administration Block at Mzenga “A” Secondary not yet started Shs.14,339,882

• Unclaimed salaries not surrendered to the Treasury through Regional Administrative Secretary - Shs.57,185,500

26. MKURANGA DC • No response on outstanding issues raised in my special

audit report • Variation Order for Shs.384,920 not approved by

Tender Board.


• Contract for collection of Council revenues between the Council and M/S Auto-Mate Ltd was made without conditions to the contract which stipulates the performance security/guarantee penalty in case of any defaults by the agent to protect the Council against risks that might occur

• Missing Payment Vouchers amounting to Shs.7,847,500. • Contributions to LAPF Shs.76,000,000 was not paid on

due dates • Special imprest of Shs.4,727,500 paid to DED Mkuranga

to meet various activities/expenses was not retired. • Salaries Shs.24,514,834 were paid to Council employees

who are not working with Government. • Outstanding payables Shs.11,436,000 not included in

the Financial Statement for the year 2008/2009

27. RUFIJI DC

● 2760 lts fuel worth Shs.5,796,000 were issued in bulk without being supported by either respective requisition from the recipients or utilization account.

● Revenue collection totaling Shs.50,458,391 in respect of produce from sea products, forest and agricultural products were not remitted to the Council by the collecting agents.

● Revenue collection amounting to Shs.1,897,800 collected and recorded in the cash books had not been banked.

● A sum of Shs.45,729,10952 paid direct to National Microfinance Bank Kibiti from Treasury in respect of Council’s Employees’ salaries for the month of August 2009 were not supported by the detailed analysis of the payees.

● Aging analysis of payables Shs.476,234,567 showing the period under which payable remained outstanding was not submitted.


28. TEMEKE MC

• Outstanding previous matters amounting to Shs.222,817,733 not yet resolved.

• Outstanding Bill board’s fees amounting to Shs.22,607,595 had not been recovered.

• The Council had not marked procured items for easy identification.

• Unclaimed salaries of Shs.21,619,310 were not surrendered to the Treasury

• 64 Primary and 37 Secondary Schools had neither title deeds nor surveyed plots.

• Values of 3 Residential Houses have not been removed in the fixed asset register and a total net asset of Shs.104,276,883 were reflected in the books of account.

• A sum of Shs.140,200,519 appearing in the cash book but not reflected in the respective bank statements.

29. KILWA DC

• Procurement of exercise books not advertised

Shs.12,200,035 • Non Compliance with procurement Plan of 2008/2009

Shs.6,465,000 • Revenue collections not remitted to the Council’s Main • Cashier Shs.9,222,250 • Payments not supported by proper documentation

Shs.19,584,990 • Missing payment voucher amounting to Shs.13,213,192 • Questionable Services of motor vehicle paid to M/s A.

G. Autos – Lindi Shs.16,000,200 • Proceeds from sale of famine maize not paid

27,900,000 • Questionable average variation of salaries for the

month of July to June 2009 Shs.6,100,306 • Amount spends over and above the Council approved

budget Shs.4,159,000


30. LIWALE DC • 2 motor cycles (Yamaha type) worth Shs.13,400,000 not

received by the Council. • Monthly procurement reports for the year 2008/2009

were not availed for audit purpose. • A sum of Shs.3,205,457 granted to Council officials as

salary advances had not been recovered. • Investments to the Local Government Loan Board and

Share in Lindi Farmers totaling Shs.16,055,000 were not supported by security, deed, share certificate or contractual documents

31. LINDI TC • Payments amounting to Shs.3,957,000 were not

properly supported by relevant supporting documents. • A sum of Shs.1,777,700 were effected in 2008/2009 in

respect of services provided during fiscal years 2005/2006 and 2006/2007 without budgetary provisions.

• Delay in clearing deposits recorded in the Cash Book but not reflected in bank Shs.3,413,055

32. NACHINGWEA DC • Procurement of goods and services amounting

Shs.4,780,800 were not included in the procurement plan

• A sum of Shs.1,500,000 was paid M/S Rehema Mohamed Supplier of Flags - who was not in the list of the approved suppliers to provide goods and services to the Council

• Liquidate damages amounting to Shs.4,694,672 was not imposed to the contractors for delay in completion of the contract works.

• Investments to the Local Government Loan Board and Share in Lindi Farmers totaling Shs.19,410,000 were supported by documentary evidence including security, deed, share certificate or contractual documents.

• Receipts in cash book but reflected not in bank (Un credited Cash book) Shs.9,940,518.


33. RUANGWA DC • Monthly procurement reports were not prepared and

availed for audit verification. • Procurement of goods and services worth Shs.5,976,200

were not included in the procurement plan for the year 2008/2009.

• Revenue collections amounting to Shs.1,540,600 collected by revenue collectors were not remitted to the Main Cashier of the Council

• Supporting documents of the expenditures Shs.15,399,132 were not submitted for audit purpose.

• Construction works of classrooms, teachers House, ward offices, bus stand, Radio station, staff houses and DED’s Office had been completed with defects which need rectifications

34. LINDI DC • A sum of Shs.3,353,000 was incurred by the Council

during the year being special imprest for the purchase of spare parts contrary to order No.249 of LAFM (1997).

• Questionable use of Council receipt books Shs.1,000,000

• Questionable issue of fuel Shs.1,814,400 • Non disclosure of three (3) Motor cycles in non-current

assets • Outstanding payables figure was understated by

Shs.6,778,282.00

35. MOROGORO MC

• Uncollected Revenue Shs.127,113,323 • Subvention not accounted for Shs.46,699,104 • Salaries paid to retired or deceased officers

Shs.11,722,170 • Expenditure Charged to wrong Codes Shs.48,986,180 • Unspent balance from the previous year not budgeted

for Shs.365,831,145 • 20% of Compensation grant not remitted to Villages

Shs.89,672,478


36. MUHEZA DC • Motor vehicle NISSAN SG4 NEW MODEL worth

Shs.118,000,000 not yet delivered. • Retention money amounting to Shs.26,558,116 not

transferred to deposit account. • A sum of Shs.85,052,900 was paid to Mkinga General

Enterprise without sufficient quotations.

37. KILINDI DC • Irregular maintenance and repair of motor vehicle -

Shs.4,325,400 • Goods and services procured without quotations

Shs.41,706,460 • Overpaid motor vehicle-Shs.5,773,500

38. SIHA DC

• Revenue collected by agents not remitted to the Council Shs.902,000

• Revenue collections not banked Shs.1,050,000 • Salaries paid to either retired or deceased employees

Shs.4,363,999 • Irregularities on salaries payments Shs.3,154,330 • Deferred Payments Shs.38,455,804 • Over payment on contact for construction of Council’s

Office block Shs.6,042,051 • Weak Performance of Audit Committee • The Council has no risk management policy • Improper maintenance of fixed asset register

39. HAI DC

• Revenue collection not remitted to Council accounts by various agents Shs.7,999,000

• Deposit of funds to MSD not booked in the accounts Shs.429,861,436

• Salaries of two employees paid into one bank account number Shs.8,469,341


• Laxity in Control over payments of salaries through bank Shs.11,244,193

• Questionable payments made to M/S Bhaganga General Supplies Shs.26,586,000

• Outstanding advances to employees Shs.8,907,800 • Improperly vouched expenditure Shs.3,477,500 • Loans not recovered Shs.6,938,308 • Salaries paid to Employees without having bank

account number Shs.9,654,346 • Salaries paid to the officers who are no longer

employees of the Council Shs.8,644,916

40. KARATU DC

• Three revenue earning receipt books were not submitted for audit when requested

• Variation in respect of 2007/2008 contract for construction amounting to Shs.54,022,995 was done without approval of the Council Tender Board, and was not evidenced to have been budgeted for in the year 2008/2009

• Revenue collections from revenue collectors amounting to Shs.5,644,000 were not remitted to the Council.

• Payment vouchers totaling to Shs.33,469,870.88 were not submitted for audit, hence nature, purpose and type of payment could not be evidenced

• Payment vouchers amounting to Shs.15,755,643.08 were inadequately vouched

• Salaries amounting to Shs.26,706,581 were paid to employees who are no longer in service

• Payments amounting to Shs.26,855,900 have been paid in respect of previous year’s liabilities, but there was no proof that the payments formed part of 2007/2008 creditors

41. ARUSHA DC • Stores items worth Shs.4,406,555 were not entered in

stores ledger and utilization of the same could not be made available though called for. There is a possibility of misuse or abuse of stores items purchased.


• Payment vouchers totaling Shs.12,126,000 were paid without proper supporting documentation.

• Payments amounting to Shs.3,735,284 were made to various payees, but the bonafide payees did not acknowledge the receipt of the sum paid to them.

• Unclaimed salaries amounting to Shs.23,470,727 pertaining to deceased, absconded and retired officers whose salaries continued to be credited into Council’s account were not remitted to Regional Administrative Secretary for subsequent remittance to the Treasury.

• The payments and other credit settlements amounting to Shs.64,770,090 at wards and village levels in respect of released Capital development grants funds sent to the wards and villages for implementation of projects under their locality were made on cash basis.

• Competitive bidding was not observed and no competitive quotations were sought to enable the Council to obtain the most economic prices and ensure procurement of quality goods, works and services.

• The Council over-spent a total of Shs.14,640,231 in salaries item in excess of their respective item income. The source of income to finance overspending could not be established. The Council under-spent a total of Shs.27,672,206 in capitation and “Tarajali” items. The whereabouts of the unspent amount in the under spent items could not be established.

42. TABORA DC • Outstanding previous matters amounting to

Shs.1,198,092,198 not yet resolved. • Payments amounting to Shs.5,785,000 were not

supported by proper documents • Internal Audit unit is not effective as the unit does not

have sufficient human and financial resources • The Council does not have the risk management policy

and strategies to mitigate them. • A sum of Shs.1,111,170 was paid as salary advance to

teachers employed under contract terms. However no recoveries have be made.


• A total amount of Shs.2,962,346 was paid to employees who are no longer in public service

• The Council did not prepare separate financial statements of Youth Development Fund, Community Health Fund, and Women Development Fund as directed by LAAC.

• Projects with the value of Shs.317,098,564 planned to be implemented during the year were not implemented.

• Development projects amounting to Shs.190,102,250 were not completed during the year as planned.

43. TABORA MC

• Internal Audit Unit did not finalise all planned audit programmes due to insufficient human and financial resources.

• The Council does not have a risk management policies and strategies to manage risk.

• Revenue collected by agents but not remitted to Council amounted to Shs.13,813,200

• A balance of Shs. 31,704,690 had not been paid to the Council by the contractor.

• Retirement particulars for imprests amounting to Shs.24,223,343 were found missing in their respective batches.

• Missing payment vouchers amounted to Shs.23,258,840 • Payments amounting to Shs.20,045,390 were not

supported by relevant supporting documents. • Capitation funds amounting to Shs.34,798,506 were not

paid to respective school • Payments amounting to Shs.49,945,112 properly

chargable to the previous year were charged to the current year.

44. NZEGA DC • Two (2) earnings receipt books not produced.

• Findings arised from assessment of internal control system were not replied.


• Grants from Central Government totaling Shs.70,473,000 were not received by the Council.

• Counting of inventories at DMO’s office, health centres and

Dispensaries were not made.

45. URAMBO DC • Procurements of goods and works valued

Shs.13,936,300 were made without following tendering procedures.

• The Council purchased drugs/medicines and books worth Shs.3,868,000, which however, were not recorded in the stores ledgers.

• Grants of Shs.33,525,000 issued by the government were not received by the Council.

• The Council did not collected revenue of Shs.10,450,000 from collecting agents.

• Payments for goods and services of Shs.25,208,684 were made by the Council without supporting documents.

• Unclaimed salaries of Shs.10,444,974 for deceased and retired employees were not yet remitted to Treasury

• Drugs/medicines and books worth Shs.3,868,000 were purchased but not recorded in the stores ledgers

46. CHUNYA DC

• Contract Register which contain necessary information regarding all contracts entered by the Council was not being maintained by the Council.

• Liquidated damages amounting to Shs.23,641,807 from M/S Mashar Bernard had not been paid to the Council for failure to meet contractual obligation within the agreed time.

• Revenue totaling Shs.8,339,500 emanating from various Council sources were not remitted to the Council

• Salaries for retired and deceased employees amounting to Shs.4,190,020 were not remitted to Treasury

• Missing Payment vouchers amounting to Shs.10,196,945


47. MBEYA DC

• Revenue receipt books were not made available to auditors hence the revenues collected on them could not be ascertained

• The final utilization for fuel purchased worth Shs.2,656,000 could not be ascertained in absence of the log sheets.

• Payments not supported by proper documentation Unsupported expenditure Shs.6,400,000

• Primary School materials not accounted for Shs.13,917,602

• Salaries paid to Retired Officers Shs.6,494,950 • Unpaid salaries not remitted to Treasury Shs.4,785,211

48. MBOZI DC

• 1 PC Generator 18 -20KVA costing Shs.28,030,000 supplied to Mbozi but not yet installed.

• Advance totaling Shs.1,082,080 paid to newly employed teachers not yet recoved.

• Payments amounting to Shs.17,628,274 were made to 5 school managements but neither the expenditure particulars nor the accounting records were produced for verification when called

• A sum of Shs.1,529,575 being August, 2008 salaries in favour of retired, absconded and deceased employees had not been returned to the Council by NMB.

• Outstanding creditors (LAPF) amounted to Shs.17,831,981

• Delay in surrendering of unclaimed salaries to Treasury Shs.15,312,973

49. MBARALI DC

• Hotel levy totalling Shs.857,700 due to the Council (for 2008/2009) had not been paid by hotel owners

• Missing payment vouchers amounted to Shs.9,707,802


• The list of schools was not incorporated in the schedule of property, plant and equipment.

• TBL shares amounting to Shs.2,500,000 were not included in the total financial assets of Shs.42,567,700 shown in the statement of financial position.

• The Council has a potential receipt of Shs.16,876,286 which could arise from a civil case Mbarali District Council Vs Tanzania – Zambia Railway Authority (TAZARA) which were not disclosed in the Statement of Financial Position as a contingent asset.

• An amount of Shs.35,830,934.00 in respect of Local Authority Provident Fund (LAPF) accrued from various Councils’ employees were not disclosed in the Accounts Payables.

• Statement of capital expenditure and its financing does not include the balances carried forward from the previous year.

50. ILEJE DC

• Contract register which contain vital information regarding contracts entered into by the Council was found not to have been properly kept by the Council

• Liquidated damages totaling Shs.4,700,000 was not deducted after termination of the contract with M/s Beshu Enterprises.

• The Council implemented activities worth Shs.10,652,100 without budgetary provisions.

• Council made transfer of Shs.63,006,000 from Development and Deposit accounts to General Fund accounts for accomplishment of Council recurrent activities.

• Uncredited receipts amounting to Shs.200,000 • Payments in bank not in cash book Shs.33,238,575 • Revenue emanating from exchange transactions, Grants

and other transfers were reported less than the actual receipts by Shs.3,712,500


51. KYELA DC • Invitations to tenders were not widely advertised.

• Liquidated damages amounting to Shs.3,469,569 were not recovered from the contractor.

• Council management procured and paid for Stores worth Shs.3,500,000 but not confirmed to have been delivered.

• Revenues worth Shs.4,076,800 emanating from the Sale of plots projects were not yet collected from landlord.

• Ownership of 1 vehicle and 1 motor cycle worth Shs.35,050,000 could not be confirmed as having been owned by the Council due to non availability of Registration Cards.

• Cattle dip tanks were not in use • Capitations fund paid to Mwenge Primary School was

not accounted for Shs.6,294,242 • Fourteen Motor vehicles and 13 Motor cycles were

observed to have not been included in the fixed assets register

• Investments with LGLB has been overstated by Shs.17,000,000

• Receipt in Cash book not in Bank amounting to Shs.35,639,000

• Receipt in Bank statement not in cash book amounting to Shs.4,888,766.68

• Understatement of LAPF Payables amounted to Shs.21,940,861

52. IRAMBA DC • The Internal Audit Unit has one staff only, as such he is

not able to discharge internal audit functions effectively.

• The Council paid salaries totaling Shs.6,603,902 to employees who are no longer in service.

• The Council received the drugs donations from one NGO worth Shs.2,989,152. However the sum of 5,855,000 was used as handling charges resulting to nugatory expenditure of Shs.2,865,848


• Council paid a sum of Shs.11,327,000 to MSD for procurement of drugs. However, up to the time of audit the same were not delivered

• The Council does not have goods inspection and receiving committee, as such the quantity and quality of goods received could not be confirmed.

• There is a delays in completion of 16 development projects valued at Shs.466,759,860.

53. SINGIDA DC

• Internal audit unit does not have enough human and financial resources for effective performance of internal unit functions.

• The Council does not maintain the register of confiscated forests products, as a results audit was not in a position to know the quantity and value of confiscated items and the revenue collected through disposal of confiscated material.

• Council’s land and buildings valued at Shs.8,856,982,000 are not supported by title deed to have a legal base of ownership.

• The Council does not appoint goods inspection and receiving committees contrary to regulation 127 of PPR of 2005.

54. MANYONI DC • Outstanding previous matters amounting to

Shs.6,123,897,661 not yet resolved. • Internal Audit unit is not provided with adequate

human and financial resources for effective discharge of internal audit functions

• Council management does not have risk management policy and strategies to mitigate them.

• Payments amounting to Shs.8,341,198 were effected to various payees without being supported by relevant acknowledgment receipts

• The Council paid the sum of Shs.5,522,483 as salaries


to employees who are no longer in Government services

• The Council had not implemented two development projects relating to construction of bus stand and car park for heavy trucks each budgeted to spend Shs.40,000,000.

• The Council had not established goods inspection and receiving committee contrary to the requirement of regulation 127 of PPR of 2005.

• The Council procured goods worth Shs.9,250,850 without being initiated by user departments

• 5 Development projects worth Shs.24,715,247; work still in progress

55. SINGIDA MC

• Under collection of revenue by Shs.107,439,886 which is equivalent to 21% of the budgeted revenue.

• Internal Audit unit do not have sufficient human and financial resources, as a results the coverage and scope of internal audit unit is limited.

• The Council does not have risk policy together with strategies to mitigate them. This may affect the operations of the Council in case of disaster.

• A sum of Shs.5,600,000 budgeted for procurement of motor vehicles were used to pay allowances.

• Statutory deductions amounting to Shs.4,533,060 were not remitted to Local Authority Provident Fund

• The Council paid compensation of Shs.14,000,000 due to double allocation of plot, hence nugatory payments.

• The amount of Shs.7,680,000 was used to procure goods which were not budgeted for.

• The Council does not appoint the goods inspection and receiving committee

56. MPANDA TC • Stores ordered and paid for worth Shs.36.254,817 but

not recorded in the stores ledger • Stores purchased from various suppliers were not

delivered worth Shs.7,840,000


• Liquidated damage not deducted from the Contractor Shs.4,056,668.

• Allowance payments not supported by proper documentation Shs.33,504,600

• Missing payment vouchers amounted to Shs.14,162,000 • Unclaimed salaries not surrendered to Treasury

Shs.6,741,580

57. NKASI DC • Hospital equipment worth Shs.3,750,100 ordered and

paid for to MSD but have not been delivered. • Procurements not supported by proper documentation

amounted to Shs.6,085,000 • Liquidated damages not deducted from the contractors

Shs.15,435,400 • Delay in completion of Construction of two classrooms

at Kabwe Secondary School Shs.11,998,370 • Funds for construction of hostel and teacher’s house

was diverted by the village management and funded the construction of two classrooms

• Allowance payments not supported by proper documentation amounted to Shs.8,904,500

• Bank statements and bank confirmation letters for five accounts (i.e. Agriculture, Land, CHF, DADPS, CBG) were not submitted along with the financial statements

58. MPANDA DC • Liquidated damage not deducted Shs.14,113,035.

• Payments of salaries paid to employees who have been absconded or terminated Shs.6,590,046

• Unclaimed salaries not remitted to Treasury Shs.12,065,999

• Payment not supported by proper documentation amounted to Shs.7,961,900

59. SUMBAWANGA DC • Delay in banking of revenue collection. Sh.16,667,050

• Substandard Works Performed on Construction of OPD at Sopa Shs.14,583,358


• Construction made not complied with design and drawings Shs.23,344,000.

• Irregularities in Construction of Hostel and a Teachers House at Lusaka Secondary School Shs.13,693,776

• Special audits and investigations need management responses

60. SONGEA MC

• Goods and services worth Shs.6,193,165 were purchased and received in advance even before raising the relevant Local Purchase Orders.

• A sum of Shs.6,381,000 was paid to various selected garages in respect of maintenance and repair of the Council’s motor vehicles without being supported by the inspection reports filled in by a competent mechanical technician/ engineer

• 9,280 litres of fuel valued at Shs.19,548,000 were struck off the ledger charge without being supported by relevant issue voucher particulars

• The Council transferred a total amount of Shs.35,510,367 from Deposit, Development and Health Accounts to various accounts as a loan apparently to meet various expenses without effecting reimbursement.

• Net salaries amounting to Shs.2,870,603 in respect of Education Department were credited to accounts of employees who are no longer in service.

61. TUNDURU DC

• Procurement payments amounting Shs.27,200,000 made without being in the Procurement plan

• The Council incurred expenditure amounting to Shs.9,595,400 for the purchase of goods and services without inviting competitive quotations

• Stock as at 30th June, 2009 was not reported in the financial statements as at the closure of the year and


the report related to stock takings for the financial year

• The repair costs worth Shs.8,186,166 were paid in respect of spares purchased, but we could not confirm if the repairs were actually done

• Five (5) General revenue earning receipt books issued to Revenue collectors were not produced for audit inspection

• A sum of Shs.2,298,400 were collected by the Council from various sources of revenue during the year under review; however, banking of the same was not confirmed

• Payments totaling to Shs.7,737,270 were not supported by relevant documents

• Payment vouchers and their supporting documents amounting to Shs.1,880,736 from education account were missing from their respective batches.

• Unclaimed salaries totaling Shs.14,708,759 pertaining to employees who were no longer in service were not remitted to Treasury through the Regional Administrative Secretary.

• Verification of salaries revealed significant differences between the amount received from Treasury and that paid from Deposit Account for 2008/09. This has resulted into overpayments of Shs.25,512,908.52 and justification for overpayment could not be evidenced.

62. IRINGA MC

• Accountability and utilization particulars in respect of medical supplies from Medical Stores Department worth Shs.9,932,600 could not be ascertained.

• Outstanding previous matters amounted to Shs.11,626,918 not yet resolved.

63. LUDEWA DC

• Laxity over contract management on projects Shs.6,473,989


• Un-utilized MSD funds Shs.15,189,256 • Expenditure made direct from Revenue Collections

before banking Shs.6,162,590 • Under collection of House rent Shs.20,779,655 • Payments of salaries to non – employees Shs.17,750,803 • Missing certificates of Valuation of Assets-

Shs.71,820,616 • Ineffective Sub Committee on Risk Management

64. NJOMBE TC

• Fire Rescue Motor Vehicle not delivered Shs.320,000,000

• Revenue collections from unremitted receipt books not ascertained to be banked – Shs. 1,694,500

65. MUFINDI DC

• Council paid Shs.5,969,500 to Medical Stores Department for purchase of Medical supplies (Medicine/drugs). The medical supplies were not evidenced to be delivered and accounted for in the books of accounts.

• The Council paid Shs.8,272,000 for procurement of foods supplies, however, it could not be evidenced that the food supplies were actually delivered and utilized for intended purposes.

• The Council failed to collect Shs.3,414,006 from the Ministry of Land and Human Settlements in respect of 20% Land Rent Revenue. Planned district land activities could not be accomplished as targeted

• Salaries amounting to Shs.17,597,121 in respect of August, 2008 salaries were paid to employees who are no longer in service.

• Creditors amounting to Shs.49,906,055 in respect of LAPF deductions were not disclosed in the statement of financial position.

• The schedule of property, plant and equipment


disclosed an amount of Shs.65,293,787 being cost of assets which were held by the Council for use but have been full depreciated.

66. KILOLO DC

• 33 open revenue earnings receipt books (not quantified) and 8 fixed fee revenue earnings receipt books valued to Shs.1,325,000 were not produced for audit when called for.

• Payments not supported by proper documentation amounted to Shs.43,872,300

• 10 motor vehicles and 20 motor cycles owned by the Council were not reflected in the Property Plant and Equipment schedules

• Disagreement of Shs.94,527,640 arises from the different between audit figure of Shs.110,783,000 and Council’s figure of Shs.16,255,360 needs reconciliation

67. MASASI DC

• A total amount of Shs.14,670,000 was paid to M/S

Masasi Security Guard Co Ltd. without contract agreement

• Special imprest amounting to Shs.3,868,000 were revealed to have neither posted to imprest register nor retired

• Payments amounting to Shs.21,627,538 were made without supporting documents

• A total amount of Shs.90,535,673 was transferred from CDG Account to General fund and Self reliance Accounts as loans to meet various activities and Council commitment was not refunded to the giving Account

• During audit site visit on 24th October, 2009, rehabilitation work of Nanyumbu health centre at a cost of Shs.29,940,000 has not yet been completed

• Unclaimed salaries amounting to Shs.69,325,030 pertaining to retired employees were not surrendered to Treasury


68. TANDAHIMBA DC

• Payment vouchers worth Shs.5,296,000 were not available for audit inspection and supporting documents totaling Shs.9,334,827 were not supporting respective payments

• Eighteen (18) fixed receipt books worth Shs.1,100,000 were not available for audit inspection

• The management approved maintenance and repair of the Council’s vehicles costing Shs.14,998,800 without recourse to M/s TEMESA

• The Council’s management has no clear policy on debtors’ collection and payment to creditors.

• Unclaimed salaries of Shs.3,704,360.95 were not surrendered to the Treasury

• Council Financial Statements for the year under review did not disclose current liability in respect of employees’ contributions to LAPF amounting Shs.18.408,257

• The Council does not have the risk management policies and strategies to manage risk.

69. MTWARA DC

• One open receipt book with serial No. 080205-250 was not availed to audit for verification.

• Supporting documents amounting to Shs.9,735,000 were not supporting respective payments

• The procured 5300 pieces Slates worth Shs.10,600,000 for various Primary Schools were not confirmed to have been receipted by the respective schools

• Council suffered a loss of Shs.17,993,452 as a result of procuring hospital drugs, materials and instruments/reagent at a higher price from a private supplier instead of Medical Stores Department (MSD)

• The Council has not yet surveyed the Primary and Secondary schools, Health Centres, Dispensaries and Administration blocks plots

• A sum of Shs.27,802,740 was issued to the staff of the


Council as special imprest for construction of three toilets at Mbembaleo, Nyundo and Tangazo Villages. However, only one toilet was constructed at Mbembaleo and there are neither constructions in progress nor materials on site found for the remaining two toilets.

• Council Financial Statements for the year under review did not disclose current liability in respect of employees’ contributions to LAPF amounting Shs.58,449,979.

• The Statements of Capital expenditure and its financing for the year ended 30th June, 2009 submitted along with the financial statements did not reflect previous year balances of capital accounts.

70. KASULU DC

• Revenue amounting to Shs.26,569,000 due from various revenue collecting agents had not been remitted to the Council

• Thirteen (13) Revenue receipt books (HW5) issued to various revenue collectors during the year under review were not availed for audit verification

• The Council incurred a sum of Shs.24,931,000 for repair of two motor vehicles not compensated by insurance agent

• The Council paid a sum of Shs.7,410,000 to National Examination Council being examination fees in respect of 78 students at Muyama Secondary School after the Headmaster misappropriated fees initially contributed by the students

• The balance of capital grant included in the cash and cash equivalent in the statement of financial position of Shs.629,258,922 differ with Shs.710,290,558 reported in the capital expenditure and its financing. The cash and cash equivalent figure was therefore, misstated by Shs.81,031,636.

• The figure for cash flow from financing activities (capital grants received during the year) reported in


the statement of cash flow differs with that reflected in the capital expenditure and its financing by Shs.343,334,442

71. BABATI DC

• Five receipt books, HW5 were not produced to audit when called for verification

• Examination of cash office noted that written cheques amounting to Shs.37,960,038 were not presented to the respective payees for a considerable long period resulting to some of them to become stale

• Payments not properly supported Shs.56,143,946 • A sum of Shs.77,388,136 was paid as salaries to the

deceased, retired or absconded employees • Two Motorcycles received from central government and

donors were not reflected in the financial statements • Salaries paid to workers who are no longer employed

Shs.73,404,123 • Statement of Women and Youth not prepared • Irregular balances in miscellaneous deposit register

Shs.83,976,000

72. HANANG DC

• Twelve (12) General Revenue Receipt books were issued to revenue collectors. However they were not produced for audit

• Written cheques amounting to Shs.4,076,354 were not presented

• Outstanding liabilities from previous year amounted to Shs.7,389,000

• A iregular expenditure amounted to Shs.8,657,052 • Unclaimed salaries amounting to Shs.16,830,209 were

not surrendered to Treasury.

73. BABATI TC

• Written cheques amounting to Shs.37,960,038 were not presented to the respective payees


• A sum of Shs.7,541,829 was paid to various officers without recovery.

74. KITETO DC

• Procurement of goods and services without inviting competitive quotations

• The management of the Council was not regularly exercising the surprise cash survey


• A sum of Shs.14,487,100 was overpaid to a contractor

75. MBULU DC

• Eight receipt books, HW5 were not availed for audit verification


• Outstanding creditors amounted to Shs.17,357,780 not disclosed in the financial statement

• A sum of Shs.11,341,000 was spent to facilitate meeting which had no approved budget

76. SIMANJIRO DC

• Ten (10) receipt books, HW5 were not produced for audit verification.

• Cheques amounting to Shs.4,781,650 were not presented to the respective payees

• Revenue collected by revenue collectors not remitted to the Council Shs.4,316,000

• Payments amounting to Shs.5,180,000 were made without adequate supporting documents

• Unretired imprests of Shs.2,510,000 issued for different purposes

• A sum of Shs.18,000,000 was paid to LAPF being arrears of LAPF contributions for the Council’s employees.


77. DODOMA MC

• Revenue Collected by Agents not remitted to the Council Shs.15,908,100

• 4 revenue Receipt Books were not produced for audit verification.


• Salary advances not recovered Shs. 2,024,460 • Salaries paid to retirees, deceased and absconded

employees Shs.12,876,901 3.3 Council’s with Qualified Opinion 1. CHATO DC • Outstanding matters amounting to Shs.147,308,858 not

resolved • Unreconciled difference Shs.125,493,961 between

Statement of Capital Expenditure and its Financing and Capital grant cash and cash equivalent (see notes to the accounts)

• Three Revenue receipts books issued to revenue collectors were not availed for audit verification

• Missing Payment Vouchers amounting to Shs.51,512,200

• Payment not supported by proper documentation Shs.21,587,419

• Payments not acknowledged by bonafide payees Shs.3,255,002

• Payments amounting to Shs.26,023,986 were effected without indicating expenditure codes.

• Fuel valued Shs.9,017,400 not confirmed to have been recorded in log books

• Procured goods and services worth Shs.12,222,900 exceeded the limit for Head of Department and Accounting Officer


2. NGARA DC • Outstanding previous matters amounting to

Shs.8,525,6904 not resolved • Difference between cash flow statement and

statement of capital expenditure of Shs. 911,946,496 not reconciled

• Over payments of Salary arrears paid to one Council staff amounting to Shs.7,799,985

• Unclaimed Salaries amounting to Shs.8,848,137 not remitted to Treasury through the Regional Administrative Secretary

• Salary arrears paid during the month of August, 2008 was overstated to the tune of Shs.82,746,280 when compare the Ministry of Finance and Economic Affairs and the Council records.

• Outstanding Receivable amounting to Shs.22,618,000 submitted without age analysis

• Outstanding Creditors amounting to Shs.20,090,000 submitted without age analysis

3. KARAGWE DC • Statement of Capital Expenditure and its Financing

items, balance brought forward, actual revenue received, total capital receipts and unutilized funds were understated to the tune of Shs.90,258,521, Shs.684,242,785 Shs.638,137,564 and Shs.223,685,027 respectively.

• Eleven Revenue earning receipt books were not produced for audit inspection.

• Payment not supported by proper documentation Shs.13,121,385

• Outstanding Payables amounting to Shs.37,427,845 without age analysis

• Procurement of Shs.5,000,000 not included in Annual Procurement Plan

• Fuel worth Shs.5,600,000 not recorded in stores ledger and Logbooks


4. MWANZA CC

• Procurement of stores amounting to Shs.45,140,000 was made without obtaining at least three quotations from the suppliers,

• Revenue collection not banked Shs.44,188,919 • Fees not collected and paid to the Council amounting

to Shs.287,280,000 • Under collection of property tax amounting to

Shs.1,921,000 • Capitation grants not receipted in Primary Schools’

Bank accounts Shs.29,425,901 • Unclaimed salaries not remitted to Treasury

Shs.6,550,271 • Unclaimed salaries relating to retirees, absconded and

deceased staff amounting to Shs.6,550,271 were not remitted to the Treasury.

• Fourteen (14) Missing payment vouchers amounting to Shs.160,643,900 were noted

• Nugatory expenditure amounting to Shs.1,101,370 • Extra duty allowances Shs.109,714,500 paid to the

Council’s staff missing proper authorization, application forms, duration and nature of work

• Stores missing utilization particulars amounting to Shs.70,395,800

5. UKEREWE DC • 9 bags of cement worth shs. 180,000, Milling Machine

worth Shs.4,000,000 and Building Materials worth Shs.3,511,000 were stolen at Kakerege Village and Nduruma Secondary School.

• Stores not accounted for by the user department Shs.30,308,700

• 10 Revenue earning receipt books not availed for audit verification.

• Revenue collected by agents not remitted tho the Council Shs.69,600,000



• Nugatory expenditure incurred amounted to Shs.10,226,200

• Unpresented cheques amounting to Shs.48,237,164 • Receipt in cash book not in bank statement amounting

to Shs.15,872,084 • Payments in cash book not in bank statement

amounting to Shs.115,700 • Receipt in bank statement not in cash book amounting

to Shs.31,697,812 • Payments in bank statement not in cash book

amounting to Shs.12,489,600

6. RORYA DC • Payments totaling Shs.317,824,633 were inadequately

supported with the relevant documents. • Payments vouchers worth Shs.743,293,455 were not

produced for audit scrutiny. • Inter transfer of funds amounting to Shs.299,975,473

between one account to another without effecting refund.

• Payments aggregating to Shs.28,690,940 were paid from the Health, Water and Agriculture accounts instead of the General Fund Account.

• Procurement of goods and services amounting to Shs.4,129,000 were made from unapproved suppliers.

• Salaries amounting to Shs.53,818,498 relating to employees who have either retired, deceased or have absconded from Council’s service continued to be paid their respective salaries through their personal bank accounts

• Funds transferred to Utegi Health Centre committee for the purpose of rehabilitation of the health center Shs.12,000,000 not accounted for.

• Outstanding receivable amounting to Shs.26,853,000 without age analysis

• Outstanding payables amounting to Shs.27,316,030 without age analysis


7. BAGAMOYO DC • Fire fighter motor vehicle worth Shs.320,000,000 not

delivered to the Council. • 39 Billboards located at Bagamoyo Town, Ruvu,

Chalinze, Mdaula, Ubena, Bwawani, Lugoba and Msata together with total dimension of 7164 sq.mtr or 78016 square feet @ 6,000 meter not recorded in the Council’s billboards register hence no revenue is being collected and pay to the Council.

• Claims from National Health Insurance Fund not refunded - Shs.2,616,246.

• The Government released a sum of Shs.30,000,000 to Lugoba for rehabilitation of the Health Centre for which rehabilitation work not yet started.

• Unclaimed salaries for employees who had died, retired or resigned amounting to Shs.12,744,912 not surrendered to the Treasury through Regional Administrative Secretary.

• Variations of works valued at Shs.261,509,753 were not authorized by Tender Board (the value of work approved by Tender Board was Shs.791,718,500)

• Payment vouchers amounting to Shs.158,347,155 was not supported relevant documents.

• No evidence was made available to confirm refund of Shs.30,000,000 to Msoga irrigation project which was transferred to DADPS account in Feb.2008

• Expenditure of Shs.142,661,250 incurred in excess of the approved budget

• The Council paid Shs.23,500,000 for goods which had not been delivered

• Retirement particulars of Shs.48,561,000 for cassava projects were not availed for audit verification.

• Motor cycle worth Shs.30,000,000 paid for Agricultural Extension Officers had not been delivered.

8. KIBAHA TC • No motor vehicle log books to authenticate issuing of

fuel worth Shs.6,090,000


• Revenue collected but not banked Shs.2,413,200 • Outstanding LAPF Contributions/penalties -

Shs.37,791,313 • Non acknowledged of subventions released through

CANADIAN AID grants Shs.31,427,000 • Salaries not accounted for in the Council’s accounts

Shs.74,585,518 • Salaries continued to be paid to 2 retired Council

officials Shs.870,306 • Unreconciled figures of capital grant reported in the

cash flow statement and capital expenduture and its financing without giving reasons Shs.497,758,666.

• Unreconciled figures of own source of revenue reported in the statement of financial performance and the related notes to the financial statements Shs.68,461,493.

• Stocks not supported by stock count sheet - Shs.16,400,000

• Outstanding payables amounting Shs.305,874,104 are not supported by analysed schedules.

• Receipts in cashbook not in bank Shs.17,500,000 • Construction of two classrooms at Nyumbu Secondary

School late completed Shs.2,108,291 • Non Completion of two classrooms at Maili Thelathini

na Tano Primary School Shs.5,162,500 • Non Completion of two classrooms at Kidenge Primary

School Shs.5,162,500 • Doubtful maintenance of Maili Moja Bus Stand

Shs.12,960,000

9. KIBAHA DC

• Contract agreement Ref. LGA/010/07-08/KDC/10/09 of Shs.20,943,000 for routine maintenance for Boko Mnemela - Mpiji road (6 km) and spot improvement of Mlandizi Health Centre Road was endorsed one day after completion date.

• A sum of Shs.4,000,000 paid to General Fund Account from Development in respect of deductions and other


recurrent activities was has not been supported by banking particulars.

• Delay Completion of Magindu Ward Executive Officer’s Office and two classrooms at Mlandizi ‘A’ Primary School worth Shs.16,095,816.

• Motor vehicles under DADPS were wrongly quoted as Shs.402,719,818 instead of Shs.773,524,256 which in turn understated balance of Unapplied capital receipts for the year by Shs.370,804,438.

10. ILALA MC • Cumulative Tax revenue accruing from Communication

Towers not paid to the Council Shs.113,598,000 for two consecutive years (2007/2008 and 2008/2009).

• Outstanding balance of Revenue Collection from Bill boards advertisements Shs.35,314,220 had not been collected

• Outstanding Debtors pertaining to Billboards advertisements Shs.135,266,712 had not been collected

• Revenue accruing from eight (8) zones within Ferry Market not collected by the Council - Shs.45,417,000

• Monthly Returns for 142 Un-used Fixed Fee Receipts Shs.3,400,000 - Amana Hospital not accounted for

• Missing Payment Vouchers Shs.39,213,953 • Payments totaling Shs.3,764,983,189 for the year

under review (2008/09) observed to have not been supported by relevant supporting documents

• Part payment of compensation of Shs.15,000,000 made for demolishing business premises of Mr. Kitenge Lajos Yusuph for which Council received no value for money

• Ward Development Enhancement Funds issued to 16 wards not accounted for Shs.52,800,000

• Imprests amounted to Shs.65,462,541 remained unretired due to partial retirement system

• During the financial year 2008/2009 special imprests issued to development sectors of Shs.101,644,517 remained outstanding


• Advance Payment of Shs.364,534,000 for investment to M/s East Africa MEATCO Ltd had not taken off and possibility of recovery is minimal.

11. KINONDONI MC • A sum of Shs.66,981,600 was paid to M/S TRACTOR

LTD being 70% part payment in respect of three reconditioned tractors alleged to be Brand new.

• Medical supplies and equipment worth Shs.82,825,534 paid for by Medical Stores Department had not been delivered to the Council

• A sum of Shs.55,621,898 was overpaid to M/S Farm equipment (TZ) Co. LTD for supplying 27 trailers for collecting and transporting garbage at Kinondoni municipality. Also liquidated damages of Shs.9,525,600 not charge and paid by M/S Farm equipment (TZ) Co. LTD

• Revenue Collection accruing from installation of 559 street light poles’ Bill boards Shs.281,736,000 not collected by the Council from M/S A1 AOUTDOOR (T) LTD.

• Revenue accruing from Small Bill boards advertisement at Magomeni Division amounting to Shs.376,200,845 have not been collected from M/S KONSARD INVESTMENT LTD.

• Revenue collection amounting to Shs.326,506,358 in respect of fees and charges collected by the agents on behalf of the Council had not been remitted to the Council.

• A sum of Shs.385,500,000 loaned to various accounts and individuals from miscellaneous deposit account to facilitate various activities have not been recovered.

• A sum of Shs.277,268,946 had been received from various sources and recorded in the cash book but not confirmed to had been lodged into the Bank.

• Capital expenditure Shs.503,553,595 carried over from previous years apparently not included in statement of capital expenditure and its financing for the year ended 2008/2009


12. DAR ES SALAAM CC

• Outstanding previous matters amounting to Shs.156,300,495 not resolved

• Investments in non performing ventures - Dar es Salaam Development Corporation (DDC)

100%, - Kariakoo Market Corporation 51% shares, - Shirika la Usafiri Dar es Salaam (UDA) 51% shares. - East Africa Meatco LTD 12.2% shares.

• DCC has transferred the Land title deeds to EAMEATCO without approval of Responsible Minister

• Contract with EAMEATCO Ltd for implementation of the Slaughter House Project wrongly signed by City Director.

• Contract with M/S M.P. ENVIRONMENT CO. LTD for management and operation of non street parking services wrongly signed by City Director.

• Non submission of deposit register • Outstanding Imprests Shs.10,919,900 • Payments not supported by proper documentation

Shs.2,331,889 • Outstanding creditors amounted to Shs.64,074,414 • Procurements totaling Shs.27,979,900 was observed

during audit to have been effected to Non –Tenderers.

• Procurements totaling Shs.3,303,000 was observed during audit to have been effected basing on one quotation.

• Procurements amounting to Shs.7,500,000 was observed during audit to have been ordered and paid for to various suppliers through special imprests

13. BAHI DC

• The Council Management did not disclose contingent liabilities relating to five Civil cases whereby the plaintiffs are claiming to be paid Shs.135,871,570 inclusive of principal debts and general damages.


• Management of the Council did not transfer part of the 20% abolished taxes amounting to Shs. 51,353,060 to villages

• Sixteen instances of payments of salaries adding to Shs.20,051,171 retired and terminated employees went undetected.

• The financial statements included overdue imprests adding to Shs.11,640,113 which were issued during the year

• Thirty seven (37) revenue receipt books worth 21,300,000 were missing

• The internal control system within the Council is not adequate owing to Ineffective Internal Audit Unit

• Goods worth Shs.5,200,000 were bought from various suppliers of goods and services without the Council’s approval in the list of contracts

• There is no evidence that the Council Tender Board is functioning effectively since quarterly and annual reports for the year 2008/2009 were not available for audit inspection.

14. KONDOA DC

• The Statement of Capital Expenditure for the year under review was understated by Shs.242,076,192

• During the period under audit the Council Management did not carry out periodic checks to confirm the validity of all payroll entries

• The amount of current assets in the statement of financial position is misstated because the figure of Creditors is understated by Shs.263,510,102.

• The Council Management disclosed in the Statement of Financial position outstanding accounts payable amounting to Shs.477,233,749 without preparing a schedule of creditors showing age analysis.

• Over the past three years, Management of the Council did not transfer to Villages a total of Shs.232,150,000, equal to 20% of the abolished taxes



• Payments of Shs.12,307,500 were made to various suppliers of goods and services without calling for quotations

• The Procurement Management Unit could not produce progress repots and annual report for the year under review

• There is no evidence that the Council Tender Board is functioning effectively since minutes of its meetings and reports for the year 2008/2009 were not available for audit inspection.

15. MPWAPWA DC • The Council Management did not include in the

financial statements Sundry Creditors adding to Shs.288,835,742 thus misstating the figure of current liabilities.

• The financial statements included overdue imprests and advances adding to Shs.132,333,782 which were issued during the year

• Receipts in cashbook but not in bank statement- Shs.1,469,955

• Payments in bank but not in cashbook- Shs.4,381,270 • Twenty nine (29) stale cheques worth

Shs.21,678,572.93 in the cash box which were not sent to the payees and no adjustments were passed in the books of account to replace the cheques.

• Over the past three years, Management of the Council did not transfer part of the 20% abolished taxes of Shs.92,119,863 to villages

• An amount of Shs.35,906,799 equal to seventy one (71%) of Community Health Funds (CHF) received for implementation of Community Health activities was not spent owing to slackness of the Community Health Management Team (CHMT).

• The internal control system within the Council is not adequate owing to ineffective Internal Audit Unit


• There were four instances whereby goods worth Shs.31,111,000 were bought without obtaining quotations

16. KONGWA DC • Receipts in cashbook but not in bank statement-

Shs.130,465,123 • Payments in bank but not in cashbook Shs.11,731,500 • Over the past three years, Management of the Council

did not transfer part of the 20% abolished taxes of Shs.105,443,680 to villages a total contrary to the Treasury instructions.

• The Council Management did not disclose contingent liabilities relating to five Civil cases whereby the plaintiffs are claiming to be paid Shs.175,435,000

• An amount of Shs.66,748,928 equal to seventy one (71%) of Community Health Funds (CHF) received for implementation of Community Health activities was not spent owing to slackness of the Community Health Management Team (CHMT).

• The Council Management did not reconcile and include in the Statement of Financial Position the year-end balance of Shs.60,256,785.86

• The financial statements included overdue imprests and advances adding to Shs.46,079,941 which were issued during the year

• Sixteen instances of payments of salaries adding to Shs.2,571,806 retired and terminated employees went undetected.


17. CHAMWINO DC

• The Statements of Financial Position, Cash Flow and Changes in net assets/equity are materially misstated and thus misleading.

• Retained earnings in the statement of financial position was understated by Shs.532,839,194.


• Cash flow statement was overstated by Shs.10,380,079 • A sum of Shs.22,807,100 was reflected as “Investments

with LGLB” under the Cash flow from investing activities, as opposed to its underlying Note No.34 which shows Shs.12,427,021 only; suggesting that the Cash flow statement was overstated by Shs.10,380,079.

• Over the past two years, Management of the Council did not transfer to villages a total of Shs.63,581,464, equal to 20% of the abolished taxes contrary to the Treasury instructions.

• The Statement of Capital Expenditure for the year under review was understated by Shs.23,037,008 since equal amount of unspent balance for the preceding financial year was not brought forward. As a result, management did not account for this amount although the financial statements as at 30th June, 2009 ended with a nil balance.

• Community contributions towards development projects were neither quantified nor declared under footnotes to the financial statements contrary to the requirements of IPSAS 1 (127) and IPSAS 22 (107) (d).

• The Council Management did not disclose a contingent liability relating to a Civil case No 17 of 2008 where the plaintiff is claiming to be paid Shs.24,078,170 inclusive of principal debts of Shs.4,078,170 and general damage of Shs.20,000,000. This is against the requirements of to IPSAS No.19.

• There were thirty (30) events whereby banking of revenue adding to Shs.8,224,500 was delayed between 24 to 108 days without management detection. This practice is against Sect.39(2) of the Local Government Finances Act No.9 (revised 2000) and Orders No.110 and 111 of the Local Authority Financial Memorandum(1997)

• During the period under audit the Council Management did not carry out periodic checks to confirm the validity of all payroll entries contrary to Order No.308 of LAFM (1997). Consequently, sixteen instances of


payments of salaries adding to Shs.4,465,436 retired and terminated employees went undetected.

• The Internal Control System within the Council is not adequate owing to Ineffective Internal Audit Unit and failure of the management to conduct regular checks resulting into under-banking of revenue and delay in clearing items of outstanding bank reconciliation.

18. KILOMBERO DC

• Purchases made out of Procurement Plan Shs.80,735,500

• Two missing Revenue Earning Receipt Books Shs.100,000

• Revenue not acknowledged by main cashier Shs.6,105,800

• Revenue amounting to Shs.6,105,800 were not accounted for.

• Revenue related to bus stand and toilet at Ifakara and Kidatu respectively collected by agents are unremmited to date Shs.2,023,800


• Missing payment vouchers amounted to Shs.5,987,000 • Expenditure debited to wrong account code

Shs.57,824,700 • Difference between amortized and depreciated figures

Shs.12,842,777 • Development Grand received Shs.121,914,252 was

reflected as cash outflows from financing activities instead of being treated as cash inflows.

• Recurrent Grand Differed Shs.155,954,468 was reflected as cash outflows from financing activities instead of being reflected as part of additional creditors which is a source of cash (cash inflow).

• The Council acquired non current assets worth Shs.898,384,654, the amount was not reflected as cash outflow under the investing activities.


• Purchased property, plant and equipments Shs.155,954,467 the purchase was reflected in the cash flows statement as cash inflow instead of outflow.

• Purchases made out of Procurement Plan Shs.80,735,500

19. MVOMERO DC

• Inadequate accountability of fuel worth Shs.31,559,700

• Laxity in Revenue collection from Cane cess Shs.105,159,543

• Revenue collected from Agents not remitted to the Council Shs.12,557,000

• Missing payment vouchers amounting to Shs.9,280,466 • Inadequate Control over Imprests paid Shs.24,115,550 • Expenditure charged to accommodation code

Shs.151,087,060 • Deposit Balance not reflected in the financial

statements Shs.47,358,000 • Expenditure charged to wrong accounting GFS codes

Shs.83,091,152 • Bank balances related to transfers to lower levels not

reflected in the Financial Statements • Outstanding LAPF contributions not reflected in the

financial Statements Shs.75,540,817

20. ULANGA DC

• Purchase of Computer Equipments through imprests Shs.3,000,000

• Procurement of goods and services without prior approval by the Council Tender Board Shs.54,703,468

• Procurement of services without using a competitive methods Shs.10,190,165

• Construction cost (of girls Dominator and dinning hall) omitted in the financial statements Shs.57,559,412

• Unclaimed salaries not refunded to Treasury Shs.30,652,336.41 also not reflected as liabilities in


the financial statements • Expenditure incurred without proper authorization

Shs.2,651,444,778. • Double payments not refunded Shs.8,460,000 • Misuse of CHF fund Shs.6,995,950 • Revenue collections not accounted for Shs.6,963,890

21. MOROGORO DC

• Inadequate accountability of Fuel worth Shs.26,004,300

• 21 revenue Earning receipt books not produced for audit

• Cash remained at cash office for a long periShs.7,362,000

• Missing Payment Vouchers amounted to Shs.23,606,178 • Payments not supported by proper documentation

Shs.10,887,510 • Imprest issued to officers not retired Shs.25,754,800 • Salary advance not recorded in the register

Shs.23,866,500 • Nugatory expenditure amounted to Shs.12,017,642 • Salaries paid to the non existing employees

Shs.20,270,560 • Non Current Assets acquired not confirmed -

Shs.699,316,304 • Grants received not supported – Shs.910,223,945 • Unspent balances for the previous year not re

budgeted Shs.1,698,793,985 • Statutory deductions not recognized in the Council

Book of Accounts Shs.1,544,450,935

22. KOROGWE TC • Expenditure details for Shs.42,538,631 advanced to

eight (8) Ward Executive Officers for construction of secondary school classrooms in their wards were not submitted for audit.

• Fuel costing Shs.34,025,700 was purchased from


unapproved supplier. • Goods worth Shs.3,186,200 ordered and paid for from

various supplier were not received as at the time of audit.

• A sum of Shs.4,000,000 was paid for the construction of pavilion building in Morogoro but no expenditure details were submitted for audit verification.

• District Engineer estimates which adopted for the construction of Korogwe Town Council Office Block differed with estimates from architectural consultant by Shs.32,655,000.

• Payment vouchers amounting to Shs.8,196,800 were not submitted for audit verification.

• Payments amounting to Shs.26,687,500 were made to various suppliers without sufficient supporting documents.

• A sum of Shs.14,200,000 was transferred from the Premium Account to the General Fund Account but the same had not been refunded as at the time of audit.

• Unclaimed salaries amounting to Shs.14,670,786 pertaining to absconded/retired/deceased employees had not been remitted to the Treasury.

• The Council applied depreciation rate of 20% contrary to its accounting policy of changing depreciation of 10% to motor vehicles with capacity less than 5 tons.

• Development grants reported in the Cash Flow Statement under financing activities differ with that in the statement of Capital Expenditure and its financing by Shs.118,975,233.

• Differed payments amounting to Shs.31,837,902 relating to the previous financial years were noted paid during the year under audit.


23. MKINGA DC • sum of Shs.9,637,600 was made to various supplier for

acquisition of office furniture and building materials in piecemeal to avoid calling for competitive tendering;

• Unclaimed salaries totaling Shs.35,479,881 not remitted to the Treasury

• Outstanding LAPF statutory contributions and penalties amounted to Shs.29,652,604 due to LAPF were not included in the statement of financial position under current liabilities.

• Previous outstanding matters amounting to Shs.14,209,100 not resolved.

24. HANDENI DC

• The Council incurred a loss amounting to Shs.11,281,279 due to unfavorable movement of exchange rate from refunded SAR 264,522 from the cancelled transaction of purchase of bricks machine from South Africa.

• The Council executed a project costing Shs.28,714,260 at Chanika, which was not in the annual procurement plan.

• The pump supplied to Kwamatuku village has been stolen and no action taken by the Council management to finalise the loss.

• Revenue amounting to Shs.4,990,000 due from various collection agents was still outstanding as at the time of audit

• The inventory figure amounting to Shs.29,820,000 was not verified due to non availability of the relevant stock taking sheets.

• The depreciation figure reported during the year was misstated by Shs.520,715,419

• Payments amounting to Shs.15,603,420 relating to the previous years were deferred and paid during the current year under audit.

• The figure for development grants reported in the


cash flow statement differ with that reflected in the Statement of Capital Expenditure and its Financing by Shs.33,029,190.

25. PANGANI DC • Drugs and medicine worth Shs.4,793,900 purchased

and received from the Medical Stores Department were not recorded in the respective pharmacy ledgers.

• Tendering process of the construction project of Mkalamo market including; non advertisement of the tender, missing evaluation report and delay in completion of the project.

• Revenue amounting to Shs.1,696,000 from various tenants have not been collected

• Payments amounting to Shs.45,941,879 relating to the previous years’ were deferred and charged during the financial year 2008/2009

• Deposit funds amounting to Shs.58,105,070 were used to pay for other activities.

• A total amount of Shs.18,340,000 was transferred from the Deposit Account to various accounts but no evidence was produced to confirm refund of the amounts transferred.

• Fishing Boat (MV Ushirikiano) valued Shs.14,000,000 have been missing since year 2000 but no loss report have been prepared to recognise the loss.

• Capital expenditure and its financing reported development grants received during the year of Shs.971,791,120 against Shs.264,342,060 reported in the statement of cash flow under financing activities.

• Inventories amounting to Shs.182,725,700 reported in the Statement of Financial Position for the year ended 30th June 2009 in respect of pipes and fittings could not be verified due to non-availability of the relevant stock counting sheets.

26. TANGA CC • A tipper lorry 7 tonnes Isuzu FSR33H. worth

Shs.88,000,000 had not yet been delivered to the Council


• Store ledgers for recording of materials; utilization particulars were missing.

• Stores worth Shs.16,100,900 were not recorded in the site ledgers kept by WEO’s

• Deposit in transit amounted to Shs.50,927,516 • A sum of Shs.39,733,000 was noted to have been

transferred from deposit account to three accounts without refund

27. KOROGWE DC

• The Council Serviced motor vehicle at a cost of

Shs.3,878,500 over and above the approved cost • A sum of Shs.6,559,800 in respect of maintenance of

Air conditioners (ACs) and washing machine was paid to supplier who tendered for printing

• The Council paid a sum of Shs.10,782,460 for construction of land registry without following the procurement procedures

• Salaries totaling Shs.15,256,295 pertaining to retired, deceased, interdicted and absconded employees had not been deleted from computer payrolls as at the time of auditing

• The existence of non current assets amounting to Shs.1,174,202,607 could not be confirmed due to non-availability of analysis showing value for each individual asset and their location

• Hospital supplies valued Shs.330,416,977 reported in the MSD statements were not recognized in the Councils financial statements

• Recurrent grants reported in the statement of financial performance differs with the analysis in the supporting schedule by Shs.126,882,830

• The statement of cash flow as at 30th June, 2009 disclosed development grants received of Shs.1,329,466,952 against the figure shown in the statement of capital expenditure and it’s financing(deferred income during the year)of


Shs.3,238,143,572 resulting into a difference of Shs.1,908,676,620

28. LUSHOTO DC • The statement of changes in net assets for the year

ended 30th June, 2009 showed negative balance of Shs.643, 681,853 whereas the statement of financial position disclosed negative net assets worth Shs.618,887,724 resulting into unexplained difference of Shs.24,794,129

• An amount of Shs.60,018,410 being value of inventories obtained during the stock taking exercise was not included in the statement of financial position

• Recurrent and capital deferred grant income reported in statement of financial position differ with figures shown in the respective notes to the financial statements by Shs.17,680,821,752

• Figures in the Statement of Capital Expenditure and its Finance were poorly presented

• Building materials amounting to Shs.13,274,000 for construction of Shambalai Ward Office were not accounted for in the respective site ledger

• Unclaimed salaries totaling Shs.177,445,526 pertaining to retired, deceased, interdicted and absconded employees had not been deleted from computer payrolls for a considerable period of time

• The Council paid a sum of Shs.15,889,000 for various activities without budgetary provision

• Eighteen (18) revenue earning receipt books (HW5) issued to various revenue collectors and officers were not availed for audit verification

29. MOSHI DC

• Unclaimed salaries not remitted to RAS Shs.2,202,298 • Missing utilization account for goods worth

Shs.75,201,860 • Arrears of Revenue (Bad depts) Shs.6,950,000


• Missing Original Cancelled Local Purchase Order No 03788 Shs.63,814,000

• Payment made without supporting document Shs.7,728,000

• Unapplied capital grant differing from cash and cash equivalents by Shs.571,453,381

• Missing individual financial statements • Procurement of motor cycle not delivered

Shs.31,680,000 • Deferred payments amounted to Shs.91,769,424

30. ROMBO DC

• Hire of private motor vehicles without contract agreements Shs.170,437,513

• Goods delivered before ordering process Shs.26,152,290

• Excessive issues of stationeries Shs. 44,790,000 • Unconfirmed Issues of fuel worth Shs.12,070,243 • Revenue collection not remitted to the Council by

various Agents Shs. 6,550,000 • Questionable and improperly vouched expenditure

Shs.168,625,899 • Missing payment vouchers Shs.8,339,920 • Cheques drawn in the name of “CASH” had their

payment vouchers missing Shs.80,095,683 • Inadequately supported payments Shs.29,081,477 • Income tax not recovered Shs.425,748 • Overdrawn net salaries Shs.16,064,413 • Loans not recovered Shs.10,663,856 • Uncleared item in the bank reconciliation statement • Bank Overdraft obtained without prior approval

Shs.30,384,952.0916. • 20% of General Purpose Grants not remitted by the

Council to the Village Councils Shs 43,176,706 • Revenue from sale of relief maize not remitted to

PM’S Office Shs.56,912,965 • Outstanding matters in the Internal Auditor’s Report

Shs.169,616,661


• Theft of sale proceeds of building plots at Holili Town Centre Shs.30,985,000

31. MOSHI MC • A sum of Shs.2,619,959 was paid to M/s TANESCO

being part payment of outstanding electricity bills in respect of Council employee who is not entitled for free electricity.

• LAPF statutory deductions and penalties amounting to Shs.20,577,451 was retained by the Council and may subject additional penalty

• The expenditure figure in the statement of financial performance was understated by Shs.988,950,763 resulted from wrong adoption of capital amortization figure

32. MWANGA DC

• The Council procured goods and services amounting to Shs.7,317,900 without inviting tender/quotations

• Goods & services amounting to Shs.51,337,810 were acquired outside the short listed suppliers

• Fuel amounting to Shs.58,218,750 was purchased and in lump sum to users but no utilization report prepared to confirm utilisation.

• Tyres costing Shs.8,627,000 were purchased from unapproved suppliers.

• Motor vehicles were hired at Shs.19,400,000 during updating electoral register without following tendering procedures.

• The Council purchased hospital equipment, drugs and medicine amounting to Shs.177,229,300 from EGPAF Fund without approval.

• The Council procured minor woks amounting to Shs. 138,427,806 direct from a supplier which is above the limit of Shs.7,500,000 provided under the second schedule of PPR of 2005.

• 20% contributions to villages amounting to Shs.90,942,802 was not remitted to the respective villages.


• Payment vouchers amounting to Shs.4,454,354 were found missing from their respective batches.

• Payments amounting to Shs.25,956,323 were not adequately supported.

• An amount of Shs.56,000,000 was refunded to Mwanga Education Development Fund but no evidence was provided to confirm that the liability actually existed.

• Acknowledgments in support of LGCGD funds amounting to Shs.170,388,298 paid to Villages and Schools were not provided.

• The Council incurred a nugatory expenditure amounting to Shs.56,131,196 in respect of penalties imposed on late payment of employees’ contributions to LAPF. In addition the Council had not yet remitted deductions amounting to Shs.221,183,887.

• Salary amounting to Shs.52,360,968 was deposited into shared bank accounts.

33. SAME DC • Funds from the Ministry of Health and Social Welfare

were paid directly to MSD Account for procuring hospital equipments and drugs for the District Council. The District Council did not recognize this income in its books of accounts Shs. 417,478,684

• Staff names appearing in the computerized pay roll of the PO-PSM but not in the Council’s payroll Shs.11,423,170

• Salary payments made to employees who had either died or retired Shs.11,244,193

• Deferred payments - The payments were not budgeted for in the current financial year, contrary to Order No. 46 of LAFM (1997) Shs.16,479,000

• Expenditure not adequately supported by relevant supporting documents Shs.1,584,490

• Goods not supplied within the stipulated contract period Shs.40,940,000

• Contract Agreement not submitted. Consequently, interim payments amounting to Shs 49,537,200 could


not be ascertained to have been made in accordance with terms of the signed contract Shs.49,537,200

34. ARUSHA MC • The Council paid Shs.206,807,388 to the Ministry of

Infrastructure to purchase 2 motor vehicles. However, the vehicles were not delivered.

• The Council made a procurement of service amounting to Shs.7,899,000 outside the annual procurement plan.

• The Council paid Shs.5,523,000 in advance for procurement of two motorcycles; these remained undelivered up to the time of writing this report.

• Major repairs carried out during the year were not in the Council’s annual procurement plan Shs.67,847,850.

• Collected receipts from various accounts amounting to Shs.2,520,600 were not reflected in bank statement.

• Nine Classrooms at Elerai Secondary School – worth Shs.126,000,000 had not yet started to operate.

• A number of retirees from various departments had outstanding loans Shs.79,622,466 not recovered.

• Commitment expenditure amounting to Shs.176,963,500 was posted into 2008/9 cash books while the expenditure was incurred in year 2009/2010.

• An amount of 4,370,920 was neither recorded in the salary advance register nor refunded by respective salary advance holders.

35. NGORONGORO DC • The Council procured motor vehicles and motorcycles

at at a total cost of Shs.98,133,895, out of the approved annual procurement plan.

• The Council spent Shs.13,184,025 on construction works above the approved budget. The over expenditure lacked approval from Treasury


• Revenue collections from the Council sources were not confirmed to have been banked. There is a risk of misappropriating the revenue collected.

• Payment Vouchers in respect of payments amounting to Shs.15,002,500 lacked supporting documents. Legitimacy for the payments involved could not be established

• The Council paid a total of Shs.5,383,627 as legal fees on pending Court cases which were decided in favour of the claimant

• Unclaimed salaries amounting to Shs.2,830,096 were not recorded in unclaimed Salaries Register.

• Payments amounting to Shs.15,360,800 were paid in the year under review in respect of previous year’s liabilities.

• The Council had spent Shs.21,759,700 (55%) over and above the approved budget for purchase of fuel.

• Two (2) used revenue earning receipt books were not produced to auditors, though requested. Revenue earned from use of these receipt books could not be ascertained.

36. LONGIDO DC

• The Council purchased drugs worth Shs.11,300,000 from Moonlight pharmacy Ltd without authority/endorsement from Medical Store Department (MSD).

• Council procured goods and services amounting to Shs.39,724,473 from various suppliers in which were not supported by three quotations

• Stores items worth Shs.14,662,280 were ordered and paid for through education account, but were not recorded into their respective ledgers.

• The Council transferred Shs.9,152,139 from general fund to another account without explanation.

• The amount of Shs.81,343,200 was added to the contract sum without any legal basis whereby the


Contract sum was changed from Shs. 686,227,529 to 767,570,729

• Payments amounting to Shs.123,109,770 were not properly vouched as some of the supporting documents were missing.

• During our audit examination it came to our knowledge that amount to the tune of Shs.22,490,400 were paid and transferred without the approval of the Accounting officer.

• Shs.13,043,000 was paid back to Capital Development Grant account (CDG) as refund of money loaned. However, there is no evidence that the above loan appeared in the previous year’ financial statements and budgeted in the current year’s Capital Development Grant account’s budget

37. MONDULI DC • A total amount of Shs.14,058,000 was paid to various

employees of the Council as special imprest for purchasing various Items/equipment

• Goods worth Shs.19,626,400 were purchased and paid for, but not recorded in the stores ledger.

• Revenue from collecting agents amounting to Shs.6,950,000 were not remitted to the Council.

• Acknowledgement receipts for a total amount of Shs.16,838,850 paid to various institutions for various services rendered to the Council were not produced for audit.

• Unclaimed Salaries amounting to Shs.10,913,470 though accounted for were not surrendered to Treasury.

• Salaries amounting to Shs.10,409,351 were paid directly to individual bank accounts of employees who had already retired from the Council services;

• Contracts of six revenue collecting agents were not submitted for audit perusal. Actual amount receivables from these agents could not be established

• Twenty eight (28) revenue earning receipt books were not submitted for audit when called for.


• Payment vouchers worth Shs.36,129,450 were not missing in their relevant batches.

• Payment vouchers and their supporting documents amounting to Shs.29,434,508.95 were missing from their respective batches.

38. MERU DC

• Stores worth Shs.10,253,000 ordered and paid for were not accounted for in the books of accounts.

• Stores items amounting to Shs.12,000,000 purchased and paid for during the year under review. However, there was no evidence that the items in question were delivered and brought to account.

• Three (3) revenue earning receipt books issued to the revenue collector were not returned to the Council headquarters.

• Payment vouchers (and their supporting documents) amounting to Shs.27,549,892.19 were missing in their respective batches.

• Expenditure amounting to Shs.48,508,701 lacked the necessary supporting documents to substantiate its authenticity.

• An amount of Shs.3,124,790 supposedly to be withholding tax on rental receipts was not deducted from the rental receipts of a landlord and remitted to the Council.

• Two Council employees were paid a total of Shs.927,500 as nightout allowances. However, according to the attendance register, the two employees were present in the office during those days.

• A loan of Shs.3,525,000 was given to a villager who was not entitled to receive loan from the Council as an employee.

• The Council paid Shs.12,946,000.90 to Barclays bank in respect of salary deductions; however, the amount was not acknowledged by the recipient


• Unclaimed salaries amounting to Shs.5,444,654.72 though accounted for were not surrendered to Treasury.

• The Council’s shares worth Shs.30,000,000 in Meru Community Bank lacked share certificates to confirm ownership of the shares

• A sum of Shs.16,000,000 was loaned to the Council’s account, for meeting expenses related to that account. However, no evidence was furnished to prove recovery of the amount and subsequent refund of the same to the Capital Development Grant Account.

• Payments amounting to Shs.15,902,800 were made in the year under review in respect of previous year’s liabilities.

• The Council paid a total of Shs.25,066,750 from Capital Development Grant to meet various expenditures of a recurrent nature.

39. SIKONGE DC • The internal audit unit does not have sufficient human

and financial resources. • The Council does not have the risk management policy

and strategies to mitigate them. • Examination of Exchequer Issues revealed grants from

Treasury in the form of Exchequer Issues amounting to Shs.37,141,700 was not acknowledged by the Council.

• The amount of Shs.67,132,184 being 20% contribution from the amount received as compensation of abolished revenue supposed to be paid to the villages, was not paid.

• Imprest totaling Shs.15,344,980 were found not retired as at the time of audit.

• The Council did not prepare separate financial statements of various Funds (women development Fund, Youth Fund, maintained at the Council as directed by LAAC.

• Procurement worth Shs.49,686,836 were made in


excess of procurement plan • Procurement amounting to Shs.9,571,520 was made

without Tender Board approval, • Procurement of drugs and books totaling

Shs.38,055,750 could not be confirmed to have been received as the accountability details could not be established during the course of audit.

40. IGUNGA DC

• Procurement worth Shs.179,069,717 was made in excess of procurement plan.

• The Council paid the total amount of Shs.197,508,000 to the Ministry of Infrastructure Development for the purpose of procurement two motor vehicles. However up to October 2009, the same were not delivered.

• The books and desk purchased by various primary schools for Shs.3,915,900 using capitation fund were found not taken on ledger.

• Drugs/medicine from MSD amounting to Shs.6,667,400 could not be confirmed to have reached respective Health Centers and Dispensaries

• Exchequer Issues amounting to Shs.6,275,000 from Central Government to cover for various activites were noted to have not been received by the Council.

• Revenues totaling Shs.9,959,000 collected by revenue collection agents were not remitted to Council headquarter.

• Total amount of Shs.38,597,335 was not collected by the Council from various companies as cess revenue from cotton for the year 2008/9.

• Revenue collected by agents (Shs.70,817,449) on behalf of the Council exceeded the agreed contract sum of Shs.11,976,000 (about 491%).

• Payments made without proper supporting documents Shs.9,795,500

• Imprests of Shs.2,193,000 paid to various employees were not recorded in the register, hence utilisation and accountability could not be verified.


• Payments of Shs.9,084,260 were properly chargeable in the year 2007/2008. these payments were effected in the year 2008/2009

• A balance of Shs.61,475,036 supposed to be paid by the Council as 20% contribution towards Village Administration office had not been paid.

• Shs.3,609,821 are deposits made by the Council into bank. However, these revenue remain unaccredited in the Council’s bank accounts

• Stale cheques amounting to Shs.26,966,229 were not adjusted in the book of accounts

• Payment amounting to Shs.9,795,500 were not supported by proper supporting document contrary to the requirement of the Local Authority Financial Memorandum of 1997 Orders 368 – 369

• Salaries amounting to Shs.14,043,347 in respect of died, retired, terminated and absconded employees were not remitted to Treasury.

41. MBEYA CC • The Council procured photocopy machine from BMTL

worth Shs.14,320,000 during the month of February 2009. However, during the month of March, 2009 the Council procured photocopy services worth Shs.10,457,650 from the various suppliers’.

• Procurement of goods from suppliers amounting of Shs.7,603,000 without following tendering procedures was not followed.

• Missing ledger; hence the accountability for the items purchased could not be verified Shs.12,280,000

• The Council made a Payment of Shs.35,520,000 for procurement of cattle Vaccine and Vaccination services. However, no evidence was brought to audit to confirm the utilization of vaccines and it was not confirmed if the actual vaccination services had been undertaken.

• The two Agents were due to pay to the Council a total sum of Shs.188,227,000 being Bus stand parking fees and Radio station fees only Shs.65,303,000 was paid leaving the balance of Shs.122,924,000 not paid to date


• The payment vouchers worth Shs. 50,594,408 were missing in their relevant batches and supporting documents totaling shs 30,386,992 were not supporting respective payment vouchers hence nature and validity of expenditure incurred by the Council could not be verified.

• The Council paid a total of Shs.103,619,357.00 being deferred payments belonging to the previous financial year

• The Council Management procured building materials worth Shs.20,019,000 from General fund Account in respect of Secondary Schools and road works but procured building Materials which had not been taken on stores ledger and the work performed by the materials purchased could not be ascertained .

• The Council Management procured stores worth Shs.25,802,500 via Health account had not been accounted for in Council stores ledger and issued to the user departments vide, various issue vouchers.

• The City Council paid an amount of Shs.294,150,000.00 to the Manager CRDB Mbeya vide PV No.2/4/2008 for procuring fire fighting vehicle through letter transfer. However, Auxiliary Fire fight equipments had not been supplied.

• Various school furniture and books worth Shs.16,886,300.00 were procured and paid for in June 2009 but had not been delivered up to the time of audit on 16/11/2009.

• Consultation services procured without following evaluation criteria hence the efficiency of the services offered could not be evaluated Shs.13,599,000.00

• The City Council’s Management entered into lease agreement with Mr Andrew R. Mahenge in respect of use of piece of land situated in Block ‘O’ opposite Mwanjelwa police post for duration of 10 years commencing from may 2005 at a low rate of Shs.360,000 per annum without following tendering procedures.


42. RUNGWE DC

• Stores worth Shs.31,580,000 ordered and paid for were not accounted for in the stores ledger.

• Fuel and stores worth Shs.83,702,005 were procured and paid for but final utilization was not known.

• The Council procured foodstuff worth Shs.21,841,140 but the same were not accounted.

• A total of 6 revenue earning receipt books were not made available to audit; hence the revenues collected on them could not be ascertained.

• One photocopying machine worth Shs.7,000,000 procured and delivered but not included in the assets schedule.

• Payment vouchers worth Shs.44,954,734 were not produced for audit.

• Revenue emanating from sale of one motor vehicles worth Shs.4,000,000 were not incorporated in the financial statements.

• The Council paid Shs.23, 588,346 for clearance of the previous year’s liabilities

• The Council paid a total of Shs.5,400,000 being settlement out of the court inrespect of civil case No. 3/2005 belonging to Mr. Lauden Kabigi and his fellow claimant Vs Rungwe District Council.

• Communications of tender awards were communicated to successful and non – successful bidders by Secretary of Tender Board instead of Accounting Officer

• Receipts in cash book not in bank amounted to Shs.328,707,280

• Receipt in bank not in cash book amounted to Shs.392,483,546

• Payments in bank not in cashbook amounted to Shs.63,208,893

• An amount for amortization of Capital Grant Shs.346,368,623 in the Statement of Financial Performance were understated by Shs.9,481,199.The correct amount for amortization of capital grant should read Shs.355,849,822


• Revenue emanating from sale of one motor vehicles worth Shs.4,000,000 were not incorporated in the financial statements

43. SUMBAWANGA MC

• Stores not taken on ledger charges Shs.6,089,500 • Procurement made to non-Tenderers Shs.19,115,500 • Overpayment made to Contractor Shs.5,329,400 • Laxity over records keeping and substandard works on

Renovation of Class rooms Shs.5,802,150 • Irregularities noted on funds received for construction

of 3 classrooms at Lukangao Secondary School Shs.8,599,408


• Doubtful allowances paid for project supervision Shs.3,986,000 (Development Account)

• Unclaimed salaries amounting to Shs.6,453,674 relating to retirees, absconded and deceased staff were noted to have not been paid to Treasury

• Recurrent Grant of Shs.6,238,870,187 comprised an amount of other funds of Shs.779,727,443 without schedule of analysis

• Differences noted between general ledgers and individual trial balances. The over statement was noted in revenue by Shs.661,531,260 and Expenditure by Shs.10,871,685

44. SONGEA DC

• Procurement made amounting to Shs.18,241,500 was made without being in the Annual procurement plan

• The Council’s management bought hospital equipment and medical supplies worth Shs.37,572,936 without approval of the Medical Stores Department.

• Audit test made on the driver’s logbooks revealed that a total of 1,874.58 Lts of diesel worth Sh.3,050,475 was issued at different periods but only 120 Lts worth


Sh.246,000 were recorded in the respective logbooks leaving fuel worth Sh.2,804,475 unaccounted for.

• Contract agreement worth Shs.9,430,960 was signed between the Council and Webco Ltd was executed without engineer’s initial estimates.

• A total sum of Shs.15,719,945 was reimbursed to Cashier who incurred expenditure from cash collected without seeking prior authority from the Accounting Officer.

• During the examination of payments it was noted that payments totaling Shs. 3,240,000 were not supported by relevant documents like acknowledgment receipts, invoices, delivery notes and signed pay sheet.

• The Council made inter account transfer amounting to Shs. 10,576,000 within the Council’s various accounts apparently to meet various expenses. The amount had not been reimbursed to the giving accounts.

• The month of September 2008 an amount of Sh.421,054 was paid to various institutions/companies as repayments of loans taken by former Council employees. However, it was a scrutiny on payroll records revealed that persons for whom loans were being repaid are no longer were in service and therefore not entitled to any salary payment.

• It was noted that some recurrent expenditures of Shs.73,608,918 in respect of costs for purchase of piglets, foodstuff, medical supplies and construction of piggeries (TASAF Account) had been capitalized and depreciated instead of being expensed in the statement of financial performance

• Included in the non current assets were power tillers worth Shs.70,590,000 which were purchased in April 2009 for distribution to villagers/farmers. These agricultural equipments are loaned to farmers and later recoveries thereon are sought. At the end of the period the same had not been distributed and were therefore included as Council’s non current assets and depreciated.

• It was noted during audit that vehicles valued


Shs.11,600,000 had been reallocated to Namtumbo District; however the same had been disclosed in the financial statements and depreciated accordingly.

• The Council included assets totaling Shs.456,571,069 in property plant and equipments, however these assets were kept for business purposes and therefore were supposed to be disclosed separately as investment property and presented at fair value as per IPSAS 16-Invetsment Property

45. NAMTUMBO DC

• The Council incurred expenditure amounting to Shs.30,200,000 for the purchase of goods and services without inviting competitive quotations.

• An audit test made for the year under review revealed that stores worth Shs.6,672,951 were issued to users without using issue vouchers.

• 5420 Litres of fuel worth Shs.10,298,000 were issued and recorded in the driver’s log books without approval of head of departments/transport officer.

• Total amount of Shs.11,245,800 was noted to have been effected to the contractors being advance payments for mobilization expenses without relevant supporting contractual documents

• The Council paid overlapping allowances totaling Shs.4,140,000 from Development account to officers who claimed to travel on duties

• Recurrent expenditure amounting to Shs.28,769,645 in respect of vehicle repair costs, projects monitoring and supervision allowances had been capitalized instead of being expensed in the statement of financial performance.

• Assets worth Shs.47,767,000 were disposed on credit but disclosed as non current assets instead of being recognized as debtors.

• Stock taking during the year end was not evidenced to be carried out, hence Stock figure of Shs.39,596,250


reported in the Financial statements could not be justified

• Outstanding claims in respect of the previous financial years amounting to Shs.9,132,420 paid in the year under review were not evidenced to be reported as part of 2007/2008 creditors.

• Sixteen (16) General revenue earning receipt books which were issued to revenue collectors but were not produced for audit inspection.

• Consolidated Trial balance to support the figures reported in the financial statements was not prepared and submitted together with the financial statements.

• Acknowledgement receipts to support the amount totaling Shs.5,954,517 paid to various institutions were not produced for audit verification.

46. MBINGA DC

• Eight (8) revenue earning receipt books were not produced for audit

• Goods worth Shs.22,756,228 were purchased from various suppliers without being included in the Council’s annual plan

• Procurements worth Shs.10,697,000 were made without approval of Tender Board

• Purchased teaching materials worth Shs.14,874,900 laid in store for a long time without being distributed to the respective Primary schools for utilization

• Contract document for the road works worth Shs.18,406,050 in respect of contract No.MDC/LGTP/08/01 were not submitted for audit

• Contract document for revenue collections amounting to Shs.42,288,435 was not submitted for audit

• Loans related to motor cycles Shs. 53,963,075 issued to Council officials for the years 2001- 2008 were noted to have not been refunded by the loanees

• There is a variation of Shs.68,193,435 resulted from amounts of salaries received from the Treasury and


those paid out to the employees by the Council. • The statement of capital expenditure and its financing

for the year 2008/09 submitted together with the financial statements, did not disclose the unspent capital receipt brought forward from 2007/2008 amounting to Shs.2,584,296,424

• Goods worth Shs.22,756,228 were purchased from various suppliers without being included in the Council’s annual plan

• Procurements worth Shs.10,697,000 were made without approval of Tender Board

• Purchased teaching materials worth Shs.14,874,900 which are not needed

• Contract document for the road works worth Shs.18,406,050 not submitted

47. IRINGA DC • Council transferred a sum of Shs 75,000,000 from CHF

account and Deposited to fixed deposit account at CRDB - Iringa branch (3 months deposit) contrary to the objective of CHF.

• Council withdrew a sum of shs 41,080,000 from CHF for the purpose of acquiring land and purchase of CRDB Ltd shares, activities which are not related to the fund

• During the year under review the Council paid a sum of Shs.3,631,485 to M/s TANESCO - Iringa through Capital Development grants being cost of electricity consumption for Ifunda Teachers College and Ifunda Technical secondary. According to the MTEF, these expenses were not budgeted for.

• Deposit accounts reflected balance of Shs.313,269,928 in note No. 30 to the financial statements of financial position could not be confirmed.

• Procurement report did not disclose the clearance unpaid debts for the month of July-March 2009.

• Among Cash and cash equivalent balance reported, includes three months renewable fixed deposit of Shs.


100,000,000 with CRDB Ltd. However, interest accrued therefrom could not be ascertained.

48. MAKETE DC

• Payments amounting to Shs.9,965,000 were made without being properly supported.

• Unclaimed salaries amounting to Shs. 19,687,503.84 were not remitted toTreasury through the Regional Administrative Secretary.

• Revenue collections amounting to Shs.6,329,406 were not evidenced to be banked.

• The statement of capital expenditure and its financing as at 30th June, 2009 reflected capital receipts unspent amount of Shs.254,253,924 which excludes balances from previous years of Shs.380,681,289.

49. NJOMBE DC

• Two (2) revenue earning receipt books were not produced for audit when called for.

• Council paid Shs.36,562,134 to Medical Stores Department for purchase of Medical supplies (Medicine/drugs). The medical supplies were not evidenced to be delivered and accounted for in the books of accounts.

• Salary Deductions payment amounting to Shs.4,149,452 were made to various agents, but were not evidenced to be received by bonafide payees.

• Unclaimed salaries amounting to Shs.33,891,077 were not remitted to the Treasury through Regional Administrative Secretary.

• Non disclosure of amount deposited to MSD Shs.733,866,527


50. NEWALA DC

• Maintenance and repair of the Council’s vehicles costing Shs. 34,166,923 approved and paid without recourse to M/s TEMESA

• Unclaimed salaries of shs 8,402,388 were not surrendered to the Treasury

• An amount of Shs.86,580,354 paid to the Permanent Secretary Ministry of Infrastructure Development. However, the vehicle and motorcycle have not been delivered.

• The Statement of Capital Expenditure and its Financing for the year under review was understated by Shs.872,498,574

51. NANYUMBU DC

• Five (5) fixed receipt books (CHF) worth Shs.700,000 were not availed for audit inspection

• Payments amounting to Shs.27,602,744 were made without supporting documents

• Contract agreements with Ref.No NDC/BD/SEC/2008/2009/01 for renovation of clinical buildings at Mangaka worth Shs 22,000,000 was not availed for audit verification.

• The Statements of Capital expenditure and its financing for the year ended 30th June, 2009 submitted along with the financial statements reflect incorrect previous year balances of capital accounts amounting to Shs 394,846,874

52. MTWARA MC

• Supporting documents amounting to Shs.6,844,824 were missing

• Payment vouchers amounting to Shs.5,196,415 were not submitted for audit examinations when called for

• Stores items worth Shs.16,032,944 were procured and


paid for during the year under review but were not taken on ledger Charge

• Municipal Council staff were irregularly promoted and paid salary scales of which they do not have required qualifications Shs.32,933,280.

• A total sum of Shs.32,127,920 was observed to have been paid as salaries arrears due to wrong award of promotions

• A sum amount of Shs.16,788,334 was delayed to be paid to the secretary for LAPF – Dodoma in respect of pension contribution in arrears for 36 villages/wards executive officers

• Payment of salaries for the months of July 2008 to May 2009 totaling Shs.2,397,488.79 was made to retired officers from public service through their personal bank accounts.

• The Statements of Capital expenditure and its financing for the year ended 30th June, 2009 submitted along with the financial statements did not reflect previous year balances of capital accounts amounting to Shs.709,965,000.

53. KIGOMA DC

• The Council Management has no good system of record keeping and summarizing financial data to permit preparation of complete financial statements.

• The Works Department of the Council, exceeded its approved budget by Shs.76,713,000.

• Delayed banking of Shs. 8,534,000. • The Council has not established Risk Management

Policy that would help the Council to mitigate possible loses

• Revenue collected from agents not remitted to the Council Shs. 27,576,000

• The financial statements included overdue imprests adding to Shs. 26,267,546 which were issued during the year

• Payment vouchers worth Shs.13,200,000 lacked


supporting documents • Forty five (45) revenue receipt books were missing • The internal control system of the Council is not

adequate owing to Ineffective Internal Audit Unit

54. KIGOMA UJIJI MC

• Missing contract agreement of Casual labourers Shs.6,850,000

• Payment of ex- casual labourers Shs.3,900,000 • Arrears of salaries not evidenced Shs.4,439,904 • Unclaimed salaries not remitted to Treasury

Shs.21,564,345 • The unclaimed salaries pertaining to retired/deceased

were not remmited to Treasury • Payments not supported by proper documentation

amounted to Shs.15,705,745 • The expenditure of Shs.13,440,000 for purchases of

motor cycles for Councillors was not approved by Finance Committee

• Ineligible Procurement of Engineer’s facilities Shs.500,000

• Overpayments to contractor Shs.5,216,120 • Double payment of salaries arrears amounted to

Shs.3,612,960

55. KIBONDO DC


• Procurement made without quotations Shs.26,147,054

• Stores paid for but not taken on ledger charge Shs.121,489,440


• Remuneration paid to absconded employees Shs.6,520,000


• Inter departmental transfer lacking approval Shs.25,108,000 Un recovered advances to Teachers Shs.13,376,055

• Unsupported issues of stores Shs.27,477,200

3.4 Council with Adverse Opinion 1. KILOSA DC

Fundamental disagreements affecting opinion • Receipts in cash book not in bank amounted to

Shs.70,551,630 • Unpresented Cheques amounted to Shs.1,097,840,373 • Payments in bank not in cash book amounted to

Shs.3,750,000. • Stores not taken on Ledger charge Shs.23,256,000 • Questionable procurement and repair of Photocopy

Machine Shs.22,185,700 • Motor vehicles maintenance not routed through

Mechanical Division Shs.34,512,145 • Procurement of Goods and Services without Prior

Approval of the Tender Board Shs.142,478,439 • 744 Missing revenue earning receipt books • Misappropriation of Revenue collection through

epicor Shs.3,185,000 • Revenue collections not banked Shs.34,913,620 • Fictitious payment of traveling allowances

Shs.58,932,000 • Missing payment vouchers Shs.1,000,002,020 • Missing Acknowledgement Receipts Shs.838,945,536 • Payments not supported by proper documentation

Shs.141,511,614 • Imprest paid but not retired Shs.31,692,071 • Salaries paid to non existing employee’s personal Bank

account Shs.84,159,227.12 • Expenditure charged to wrong accounting GFS codes


Shs.29,941,360 • Unreconciled expenditure figure reported in the

statement of financial performance by nature and statement of performance by function Shs.116,190,191

• Unreconciled revenue figure of financial performance and schedule of statement of revenue and expenses Shs.719,748,485

3.5 Financial statements preparation process

3.5.1 Introduction

Financial statements are an important means of demonstrating how the Public Sector, both at individual entity and the whole government level including LGAs, meets their financial management obligations and responsibilities. More recently, reforms have involved increasingly compressed timetable for the preparation of financial information, the adoption of International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards (IPSAs) and Government Financial Statistics (GFS) used in preparation of Mid Term Expenditure Frame work (MTEF). The reforms are part of a wider global recognition of the need to improve financial management and quality of financial information across public and private sector organizations.

3.5.2 Adopting and Implementation of International Public

Sector Accounting Standards by LGAs

There is increasing demand for accountability and transparency by all stakeholders in the Public Sector in Tanzania. Frequent revelation during the Local Authority


Accounts Committee (LAAC) hearing the CAG’s reports raises issues of financial accountability and transparency. The preparation of transparent and understandable financial statements is an important way for LGAs to demonstrate their accountability to the citizens who funds them through taxes and as well as development partners who often contribute to the development activities of Government either through the General Budget Support or other acceptable means. International Public Sector Accounting Standards (IPSASs) are a set high quality, independently developed accounting standards aimed at meeting the financial reporting needs of the Public Sector. IPSAS are developed by the International Public Sector Accounting Standards Board (IPSASB), which is an arm of the International Federation of Accountants (IFAC); the global organization for the accounting profession founded in 1977. Transition to IPSAS as an accounting framework is designed to improve the quality and consistency of financial reporting, enhance transparency and accountability, facilitate better decision making and financial management and good governance in our entire Public Sector.

3.5.3 Challenges

The success of IPSAS adoption and implementation in LGAs will therefore only depend on the efforts of various stakeholders who support the improvement of financial management and reporting in the Public Sector. Related to the above, it is a fact that the Local Government Finances Act No.9 of 1982 (revised in 2000) and Local Authorities Financial Memorandum (LAFM), 1997 which are in use today as basis of preparation of LGAs financial statements do not mention IPSAS neither prescribe it as a basis of financial statement preparation.


A new Legal framework will therefore require to be drafted which will prescribe IPSAS as the basis of preparation of LGAs financial statements. With the adoption and implementation of IPSAS, the financial information management system of the LGAs will require to be upgraded to cope with the financial data requirements of these standards. The current Integrated Financial Management System (IFMS) in use by the LGAs and the Central Government for financial management will therefore require to be evaluated for its adequacy with the adoption of new accounting standards. Capacity building will likewise require to be undertaken in this area to ensure that it does not become an implementation drawback. The adoption of this new financial reporting framework will herald significant changes to the systems and process of financial reporting by the LGAs. This may come with new formats and financial reporting templates requirements. It will require the Accountants and other responsible staff in the LGAs to adopt changes from the usual, routine reporting structure. People generally resist change and therefore change management process requires to be incorporated to the adoption and implementation road map.

It is notable that some progress has been made towards IPSAS adoption in LGAs; the Prime Minister’s Office Regional Administration and Local Government issued a Circular with Ref. No. CA: 26/307/01A/79 of 28 September, 2009 requiring the LGAs to prepare their financial reports/statements on the basis of IPSAS. The PMO-RALG has also prepared an IPSAS based financial reporting template and guide to be adopted by all the 133 Local Government Authorities in the preparation of their financial reports.

The stakeholders to this New Public Management initiative will need to be spear headed by the PMO-RALG, Ministry of


Finance and Economic Affairs, National Board of Accountants and Auditors (NBAA), Development Partners and the government as a whole. It will also be essential for my office – the National Audit Office (NAO) to provide Auditor’s perspective to the adoption and implementation process.

3.5.4 Preparation and Submission of Financial Statements by the Local Government Authorities

3.5.4.1. Submission of Financial Statements

Order No. 82 and 88 of LAFM (1997) and Sect 45(4) of the Local Government Finances Act 1982 requires the Accounting Officer to prepare the final accounts and submit them to the Controller and Auditor General for audit purposes on or before 30th September of each financial year. The financial statements of all LGAs for the year ended 30th June 2009 were required to be submitted to the CAG before or on 15th October, 2009 following an agreement reached between the Controller and Auditor General and the Permanent Secretary Prime Minister’s Office – Regional Administration and Local Government (PMO – RALG) on the necessity to extend for fifteen days the submission date of Councils’ financial statements to 15th October 2009 to allow for adequate time for the Councils’ management to prepare the Financial Statements based on IPSAS – accrual basis of accounting. All 133 (100%) Councils had submitted their annual financial statements by 15 October, 2009 which was the agreed date. However, 24 Councils as shown in the table below withdrew their financial statements and re-submitted amended financial statements between December 2009 and February, 2010 leaving 109 or 82% Councils which complied with the agreed due date.


In the course of audit of financial statements submitted we noted that there were a number of Councils which submitted with so many errors and omissions solely with the intention of meeting the deadline for submission of such financial statements for audit purposes.

The audit of such financial statements resulted in a number of changes and adjustments to the draft statements submitted for audit purposes after which they were re-submitted. The number of changes and adjustments and the significant nature of the accounting issues involved indicated that an improvement is required in the accuracy of figures and disclosures included in the draft financial statements. The number of Councils which withdrew their financial statements and re-submitted revised or adjusted financial statements were 15 from last year (2007/08) and 24 during the year under review (2008/09) as follows:

S/No. Name of the Council Date of Submission Revised /Adjusted Statements

1. Babati TC 30 th December, 2009

2. Mbulu DC 20 th December , 2009

3. Moshi MC 08 th February, 2010

4. Mwanga DC 08 th February, 2010

5. Kasulu DC 12 th December, 2009

6. Chunya DC 11 th February, 2010

7. Sikonge DC 04 th January, 2010

8. Tabora MC 10 th January,,2010

9. Singida MC 14 th December, 2009

10. Manyoni DC 08th December, 2009

11. Singida DC 07 th December, 2009

12. Iramba DC 07th December, 2009


13. Mpanda TC 30th December, 2009

14. Tabora DC 07th January, 2010

15. Igunga DC 22nd December, 2009

16. Babati DC 28th December, 2009

17. Morogoro MC 24th December, 2009

18. Mvomero DC 24th December, 2009

19. Kilombero DC 28th December, 2009

20. Morogoro DC 02nd January, 2010

21. Urambo DC 04th December, 2009

22. Ngorongoro DC 21st December, 2009

23. Monduli DC 26th December, 2009

24. Rungwe DC 11th January, 2010

Trend of Revised/Adjusted financial statements for three consecutive years

Financial Year

Number of Councils Audited

Number of Councils Revised/Adjusted

financial statements

percentage

2006/2007 124 15 12 2007/2008 133 15 11 2008/2009 133 24 18

It is recommended that, in future years, the Councils should introduce quality control process and time table for preparation of financial statements to help ensure the accuracy of the draft financial statements submitted for audit purposes.

Generally, the audit of financial statements in LGAs for the financial year 2008/2009 noted some weaknesses as follows:-


(i) Compliance with applicable reporting framework The submitted financial statements of all LGAs for year ended 30th June 2009 complied with International Public Sector Accounting Standards (IPSAS) – accrual basis of accounting and Part IV of the Local Government Finances Act No. 9 of 1982 (revised 2000) and in accordance with the provisions of Order No.53 of the Local Authority Financial Memorandum (LAFM) of 1997 as the applicable reporting framework for Local Government Authorities. However, the financial reporting frameworks i.e. Local Authority Financial Memorandum (LAFM) of 1997 and the Local Authority Accounting Manual (LAAM) including other LGAs Legislations are outdated and thus are not in tandem with the adopted IPSAS - accrual basis of accounting. We recommend that LGAs legistlation together with the Local Authority Financial Memorandum (LAFM) of 1997 and the Local Authority Accounting Manual (LAAM) should be reviewed in line with IPSAS accrual basis of accounting.

(ii) Improper presentation of Financial Statements A number of the financial statements presented had fundamental material errors e.g. opening balances for 2008/2009 were different with the closing balances of 2007/08 which obviously rendered the statements to be misleading.

(iii) Incorrect figures reported in the financial statements

A number of submitted financial statements of Local Government Authorities e.g. the Statement of Financial Position, Cash flow statements, Statement of Financial Performance lacked corresponding supporting schedules and notes. Under the circumstances, these financial statements were found to be incomplete.

(iv) In appropriate disclosures of depreciation charges The Financial Statements of various Local Government Authorities had omitted the item of depreciation charges.


(v) Omissions of Fixed Assets in the statements of Financial Position The financial statements of a number of Local Government Authorities omitted the item of non current assets. Furthermore, a number of Local Government Authorities did not maintain the non current assets registers as required by law and sometimes where the non current assets register existed, they were not updated.

(vi ) Non Disclosure of Explanatory Notes/Description

Schedules During our audit of the financial statements for the year 2008/09 we noted that the figures in the individual accounts submitted along with the financial statements were not linked with those figures in the notes to the financial statements for easy referencing.

(vii) Improper Presentation of Statements of Capital

Expenditure and its Financing Statements of capital expenditure and its financing do not include vital information such as the balances carried forward from the previous year, therefore users of Financial Statements may not be provided with information that enables them to evaluate the development expenditure.

(viii) Under statement of opening balances reported in Deferred Income Account IPSAS.1 requires comparative information to be disclosed in respect of the previous period for all amounts reported in the financial statements.

Our audit examination of the statements of financial position for the year ended 30th June, 2009 revealed that reported opening balance for deferred income account at the beginning of the year under audit instead of the closing balance of the previous year (i.e 2007/08).


(ix) Incorrect treatment of recurrent expenditure as capital expenditure Sometimes, the Recurrent Expenditures incurred by Local Government Authorities were treated as Capital expenditures. In this regard, Recurrent Expenditures were understated and consequently the reported surpluses were overstated.

(x) Cash flow statements figures In a number of financial statements of Local Government Authorities audited, the figures reported in the cash flow statements could not be linked with the figures in the Statement of Financial Position and Statement of Capital Expenditure and its Financing hence making it difficult to comprehend.

(xi) Non Disclosure of Contingents Liabilities According to IPSAS No.19 the Councils are required to disclose Contingent Liabilities relating to unresolved matters which might have material effect on the financial statements. However, some Councils did not consider disclosing the Contingents Liabilities.

Observations noted on financial statements Specifically, we noted sample weaknesses when reviewing LGAs financial statements for 2008/2009 as follows:-

S/N Name of Council Weaknesses 1. Kilosa DC • Unreconciled expenditure

figure reported in the statement of financial performance by nature and statement of performance by function Shs.116,190,191

• Unreconciled revenue figure of financial performance and schedule of statement of revenue and expenses Shs.719,748,485


2. Kibaha DC • Understatement of an Unapplied capital receipts - Shs.370,804,438

• Differences were noted between capital expenditure receipts received during the year amounting to Shs.731,367,807 (Note 64) and Shs.536,104,302 reflected in the cash flow from financing activities as receipts for development activities.

3. Kibaha TC • Note 36 Capital Expenditure and its Financing reported an actual revenue received of Shs.265,456,879 while a Cash Flow Statement reflected Shs.763,215,544.

• Own source revenue collections received during the year amounting to Shs.688,203,373 (Note 12) and Shs.756,664,866 reflected in the statement of financial performance thus making unreconciled difference of Shs.68,461,493

4. Mafia DC Own source revenue collections was overstated by Shs.316,903,760.

5. Mkuranga DC Assets under Property, Plant and Equipment worth - Shs.50,886,250 purchased during the year were totally excluded in the value of assets under PPE.

6. Chamwino DC • According to IPSAS No.19 the Council is required to disclose Contingent Liabilities relating to unresolved matters which


might have material effect on the financial statements. However, the Council did not consider disclosing a civil case No 17 of 2008 Robert Kango General Supply Versus Chamwino district council. The plaintiff is claiming to be paid Shs. 24,078,170 inclusive of principal debts of Shs.4,078,170 and general damage of Shs.20,000,000. The case is still under trial.

• Incorrect Statements of Financial Position, Cash Flow and Changes in net assets/equity

• Note 29 to the financial statements showed that during the year, the Council revalued its assets and realized a surplus of 6,815,126,851. However, this amount was reflected wrongly in the Statement of Changes in net assets/equity thus understating the year-end surplus by the same amount. Consequently, this Revaluation surplus was not included in the Statements of Financial Position either as Accumulated Surplus or as a separate item, viz. Revaluation Surplus.

• Retained earnings in the statement of financial position was understated by


Shs.532,839,194. • Cash flow statement was

overstated by Shs.10,380,079 • Non Disclosure of outstanding

contributions to LAPF Shs.382,398,488

7. Kondoa DC Understatement of Accounts

Payable Shs.263,510,102

8. Kongwa DC According to IPSAS No.19 the Council is required to disclose Contingent Liabilities relating to unresolved matters which might have material effect on the financial statements. However, the Council did not consider disclosing the following civil cases with claims adding to Shs.175,435,000 pending in various courts of law.

9. Dar es Salaam C.C • Under statement of opening balances reported in Deferred Income Account Shs.9,017,298,000

• IPSAS.1 requires comparative information to be disclosed in respect of the previous period for all amounts reported in the financial statements.

• Our audit examination of the statement of financial position for the year ended 30th June,2009 revealed that, Shs.1,666,024,000 reported as opening balance for deferred income account at the beginning of the year under


audit instead of the closing balance of the previous year (i.e 2007/08) figure of Shs.10,683,322,000.

• Non disclosure for provision of contingent assets and liabilities

• Our audit of financial statements of Dar es Salaam City Council for the year under audit revealed that, the Council has 34 cases with different courts of law which are waiting for ruling.

10. Temeke MC • Undisclosed Amount of Depreciation charge on Infrastructure Assets

• The note to the financial statements relating to property, plant and equipment disclosed infrastructural Assets work Shs.11, 586,343.29.

However, no depreciation charge has been made.

11. Iringa DC Understattement of Creditors – Shs 27,576,807

12. Makete DC The statement of capital expenditure and its financing reflected capital receipts unspent amount of Shs. 254,253,924 which excludes balances from previous years of Shs. 380,681,289. Hence, the proper unspent balance for the year under review is Shs. 634,935,213


13. Mufindi DC LAPF creditors not disclosed in the statement of financial position - Shs.49,906,055

14. Moshi DC Note 23 to the financial statements shows the balance of cash and cash equivalents for capital grants amounting to Shs.1,118,914,933 while the figure adopted for preparation of differed income as unapplied capital at the beginning of the year 2008/2009 was Shs.1,242,945,195 thus resulting in a differences of Shs. 124,030,262.

15. Moshi MC Understatement of total expenditure Shs.988,950,763

16. Babati DC The financial position reflected Payable amounting to Shs.83,976,000 comprising of deposits, bonds, and other payables as shown in note 25 to the final accounts. We noted that the figures in the schedule provided were different from the figures shown in the notes to the financial statements.

17. Hanang DC Understated Sundry debtors Shs. 4,739,030.

18. Mbulu DC Contradicting figures of payables in the statement of financial position and notes to financial statements The statement of financial position reflected


Shs.159,001,000 as payables in which Shs.29,456,000 related to Deposit account as per Note 28 to the financial statements. However, the total deposit balance as per reconciled cash book balance as at 30th June, 2009 was Shs.80,991,000. The difference of Shs.51,535,000 could not be explained.

19. Mbozi DC Understatement of LAPF Payables Shs.17,831,981

20. Kilombero DC • Development Grant Received Shs.121,914,252.45 was erroneously reflected as cash outflows from financing activities.

• Recurrent Grant Deffered amounting to Shs.155,954,468.37 was reflected as cash outflows from financing activities instead of being reflected as part of additional creditors which is a source of cash inflow.

• According to Statement of Capital expenditure and its financing, the Council acquired non current assets worth Shs.898,384,654 during the year, but the amount was not reflected as cash outflow under the investing activities.

• Shs.155,954,467 used to purchase property, plant and equipments was reflected under investing activities in the cash flows statement as


cash inflow instead of outflow.

• Schedules of Income and Expenditure not consistence with Statement of financial performance figure

• Differences between Amortized amount and Depreciation charged Shs.12,842,777 not explained

21. Mvomero DC • Opening balance of Shs.67,998,562 and the closing balance Shs.128,245,645 of funds Deposited at Medical Stores Department not reflected in the financial statement

• Outstanding LAPF contributions not reflected in the financial statements Shs.75,540,817.

• Expenditure charged to wrong accounting GFS codes Shs.83,091,152.

22. Ulanga DC • Expenditure charged to wrong accounting GFS codes Shs.26,189,389.

23. Mtwara/Mikindani MC

• LAPF Accounts Payables not disclosed Shs.7,489,188

24. Tandahimba DC • LAPF Accounts Payables not disclosed Shs.18,408,257

25. Geita DC • The figure of payables was understated by Shs.2,540,608

• Revenue shown into statement of comparison of budget and actual by


function was understated by Shs.2,336,061 the correct figure should read 23,426,923.

• In the statement of comparison of Budget and Actual Amount by nature, surplus and deficit figure reported is Shs.1,592,894 is overstated the correct figure should read Shs.1,327,362 (Audit figure).

• Statement of comparison of Budget and Actual amount by function, surplus and deficit figure reported is Shs.493,345 the correct figure should read Shs.1,327,362 (Audit figure).

26. Kwimba DC Understatement of inventories figure by Shs.24,515,310.

27. Magu DC Non Disclosure of Contingent Liabilities Shs.32,236,568.

28. Ukerewe DC Non Disclosure of Contingent Liabilities Shs.258, 991,802

29. Mbinga DC • Valuation of financial assets at cost instead of at fair value Shs.183,021,300 contrary to IPSAS 15.

• Non disclosure of Related Party Transactions Shs.3,351,047.47 contrary to IPSAS 20.


30. Namtumbo DC Assets disposed on credit but discloas on as current assets - Shs.47,767

31. Songea DC • Recurrent expenditures which have been capitalized valued Shs.73,608,918

• Valuation of financial assets at cost instead of fair value Shs.16,796,300.

• Inclusion of item not involving cash movement in the cash flow statement Sh.145,618,277

• Statement of Capital Expenditure and its Financing understated by Shs.1,190,018,100.

32.

Songea MC Recurrent expenditures which have been capitalized Shs.130,117,288.

33. Tunduru DC • Improper capitalization of Recurrent expenditures – Shs.24,780,501

• Inclusion of non cash item in the cash flow statement Shs.31,213,775

• Contingent liability not disclosed in the notes – Shs.185,693,922.

34. Meatu DC • 2 Understatement of Purchase of property, plant and equipments Shs.508,607,000

35. Manyoni DC • Understatement of payable by Shs.49,142,084.


36. Singida MC • Unpaid statutory deductions to LAPF of Shs.45,822,629 were not reflected in the financial statements as creditors.

37. Sikonge DC • Under statement of accounts payable and cash balances from development projects held at village levels Shs.26,718,063in cash and cash equivalent.

38. Tabora MC • Figures which was incorporated in this financial statement for comparability purpose is not the same figures certified in 2007/8 financial statements. The amount involved was Shs.1,447,834,336.

• The schedules and certificate amounting to Shs.241,457,627 to support bank reconciliation and stock sheets were not made available in the working paper book to support the financial statement notes.

39. Handeni DC • Misstatement of depreciation figures Shs.520,715,419.

• Unreconcilied development grants received- Shs.33,029,190

• The cash flow statement reflected Shs.1,969,532,794.99 as development grants received during the year against Shs.2,002,561,985 reported in the Statement of Capital


Expenditure and its Financing, a difference of Shs.33, 029,190.01.

40. Korogwe DC • The cash flow statement has been understated by Shs.1,908,676,620 for wrong adoption of the figure for development grant received.

• LAPF Contributions and Penalties not recognized Shs. 7,849,176.

41. Korogwe TC • Overstatement of depreciation charges Shs.11,676,860

• The cash flow statement reflected Shs.323,731,256 under the financing activities being development grants received during the year under review against Shs.442,706,489 resulting in unreconciled figure of Shs.118,975,233.

42. Lushoto DC • The statement of changes in net assets showed negative balance of Shs.643, 681,853 whereas the statement of financial position disclosed negative net assets worth Shs.618,887,724 resulting into unexplained difference of Shs.24, 794,129.

• Inventories not disclosed Shs.60, 018,410

• The statement of financial position for reflected deferred income under recurrent and capital grant of Shs.1,582,190,035 and


Shs.18,848,353,074 respectively. However, the figures differ with those reported in the respective notes to the financial statement by Shs 17,680,821,752.

43. Nkinga DC • Overstatement of receivables Shs.91,126,475.

• LAPF contribution and penalties not reported Shs.29,652,604 Incomplete

• The submitted statement of capital expenditure and its financing was not properly prepared where figures were not added to obtain total receipts and total expenditure for the year.

44. Pangani DC • Capital Expenditure and its Financing reflected Shs.971,791,120 of capital received during the year. However, the cash flow statement reported development grants of Shs.264,342,060 under cash flow from financing activities. Under normal circumstances, the two statements should tally.

45. Tanga CC • Local Authority Provident Fund (LAPF) statutory contribution and penalties not disclosed Shs.38,433,676


CHAPTER FOUR

4.0 FINANCIAL AND ASSETS MANAGEMENT; GOOD GOVERNANCE AND INTERNAL CONTROLS SYSTEMS IN LGAs

4.1 Follow up of implementations of the previous years’ auditor’s recommendations on General and Individual LGAs reports

4.1.1 Follow up of implementation of previous years’ General Report

Section 40(4) of the Public Audit Act, 2008 requires the CAG to include an implementation status of the action plan in the next annual audit report. This part is referring to the implementation status of the CAG’s recommendations on the financial statements of the Local Government Authorities for the financial year 2007/08.

According to Section 40(2) it is the Pay Master General (PMG) who is supposed to receive responses from Accounting Officers and thereafter the PMG is supposed to submit to the Minister who is supposed to lay it before the National Assembly. Again the PMG is obliged to submit a copy of consolidated responses and action plan to the CAG.

The responses received on the CAG’s report for the financial year ended 30th June 2008 did not follow the required procedure as prescribed in the Act. NAO was able to receive three sets of responses. In August 2009 the PMG submitted a structured response for the CAG’s audit report. In September 2009 the Permanent Secretary – PMO RALG came up with the action plan to address the CAG’s recommendations. This was issued to Council Directors and copied to CAG. The third set of responses was the one presented to the Local Authority Accounts Committee (LAAC) by the PS – PMO RALG in October 2009. This was in the form of the report to LAAC on implementation of the recommendations issued by the CAG in the report of the


financial year 2007/08 and directives from LAAC for 2006/07 accounts.

I would like to express my appreciation for the efforts made by the Government through the Pay Master General for responding to the audit report and actions taken on the recommendations contained in the report thereon, however, there are some recommendations which were not attended or covered in any of the three responses received. The recommendations without responses include the following:

S/N Observation Recommendations 1. Payroll Audit

Internal control over salary payments in the LGAs as well as in MDAs has remained to be a big challenge. Our audit revealed a substantial amount of Government money being paid to retired, absconded, terminated or deceased employees. Expenditure on staff salaries has been noted as a weak point in the Government’s internal control system which is subjecting the Government to loose a substantial amount of its much needed resources for the development of the country.

To establish a very close and effective working relationship between the LGAs, PO – PSM and the Ministry of Finance and Economic Affairs in updating the Government’s payroll data base.

2. The functions of the Accountant General in LGAs

To comply with the requirement of Sect. 40(2) of the Local Government Finances Act No 9 of 1982

Recommended to the Government to establish an office of the Accountant General for Local


(revised 2000) on uniform reporting and its sustainability for all Councils. LGAs does not have the “Accountant General” with the mandate to supervise and be the head of the finance/accounting functions for LGAs

Government Authorities, otherwise the Public Finance Act No 6 of 2001 (revised 2004) should be amended to give the current Accountant General under Sect 7 of the PFA 2001 the mandate to also, oversee the finances of LGAs.

3. Good Governance Issues in LGAs

PMO – RALG issued a circular guiding the Council’s Internal Auditor to be a member and Secretary of the Audit Committee. Audit Committees established in accordance with this circular have found themselves ineffective due to the fact that the Internal Auditor being a member and Secretary to the Audit Committee brings about a conflict of interest and is against best practice.

The Head of Internal Audit Unit should not be a Member or the Secretary of the Audit Committee as it is today, but can attend the Audit Committee meetings as an invitee. It was further, recommended that if situation permits, the Legal Officer of the Council can be appointed as the Secretary of the Audit Committee.

4. Use of Epicor – IFMS

Audit established that there is no a single LGA which is comfortable with the use of

PMO – RALG should do a feasibility study to establish the


IFMS – Epicor system. A number of modules in the system were found not operative including the inability of the system to prepare the end of year financial statements.

appropriateness of the IFMS – Epicor system to the LGAs otherwise a possibility of coming up with a simpler computerized system for LGAs operations should be explored

5. Revenue Collection on behalf of Council by Agents

The audit noted weaknesses on revenue collections outsourced to agents. This area was noted to be characterized by unfavorable contracts which benefited more the collecting agents and not the Council.

The ability of the Council to fund its operation using internal sources of revenues is hampered by inadequate internal controls over its revenue collection

Councils should do a thorough feasibility study before entering to any revenue collection contracts. All contracts should be reviewed by competent lawyers before the Council signs the contract Agreement.

Non response to Audit recommendations could lead to recurrence of weaknesses noted during previous audits. This deters the efforts to improve internal control environment and ultimately financial management in the Local Government Authorities.

As it can be observed above, as auditors we do not generally provide estimates of the cost for implementing the audit recommendations but care is always taken to


avoid making suggestions that are not economically practicable.

4.1.2 Follow up of implementation of previous years’ Individual Reports

This part of the report summarizes in a nut-shell issues, which were either not implemented or partially implemented and specifically I have decided to include all issues which can be quantified. Follow up of other qualitative issues have been covered in other parts of this report very briefly. It is ideal also, to mention that this part includes follow up made in the Special Audits conducted in 2007/08 in the respective Local Government Authorities. We observed that some Councils made exerted efforts in implementing Auditors’ recommendations. However, 126 Councils had outstanding matters from previous years’ audit amounting to Shs. 53,463,558,647, which remained unresolved. Kongwa District Council had the largest amount of Shs.7,287,540,049 followed by Manyoni District Council Shs.6,123,897,661 and Ileje District Council with the lowest amount of Shs. 427,568. We have been issuing audit observations and recommendations to auditees for the purpose of enabling the Council management to rectify concerns raised by the auditors by acting promptly in order to improve internal controls and management of Council’s resources. The tradional trend of some Councils not reacting to the auditors’ observations and recommendations leads to the recurrence of anomalies observed by the auditors in subsequent financial years. This can also, reflect lack of seriousness and non commitment on the part of the Accounting Officers and management of the respective Councils, hence defeating the efforts of the Government to improve Public Financial Management.


A comparative summary of outstanding matters of previous years audits for the three consecutive years (F/Y 2006/2007; 2007/2008 and 2008/2009) is as shown in the table below:-

F/ Year Amount of

outstanding matters (Shs)

No. of Councils involved

2006/2007 4,643,565,831 52 2007/2008 32, 903,395,306 112 2008/2009 53,463,558,647 126

The above trend can be presented in a histogram as follows

0100000000002000000000030000000000400000000005000000000060000000000

2006/07 2007/08 2008/09

Trend of outstanding matters

CouncilsAmount (Shs)

The pictorial presentation above depicts the total value of outstanding matters Shs.32,903,395,306 from the previous audits for the year 2007/2008 which involved 112 Councils. During the F/Y 2008/2009 the number of Councils with outstanding matters from previous audits increased from 112 to 126 Councils involving Shs. 53,463,558,647 registering an increase of Shs.20,560,163,343 as pointed out above. This part includes outstanding matters from the Special Audits carried out in 2007/08. Annexure 2 contains a summary of Councils with outstanding matters from the previous audits.


4.2 Assessment of Information Technology (IT) Control Environment in LGAs

Introduction Information Technology (IT) assists the LGAs to transform the way they operate and support Public Service delivery initiatives and improved efficiency, functionability and/ or automation.

While technology and related improvements present LGAs with efficiently services delivery they also involve new or enhanced risks such as physical and logical controls that need to be effectively managed. The LGAs use a combination of applications to support budget planning, financial management, monitoring and reporting, and revenue collection. These include: The Integrated Financial Management System (IFMS), Plan Rep, and the Local Government Monitoring Database (LGMD). The LGAs are also, provided with online tools like the By-Law Making Database (BLMD). Some LGAs financial statements preparation and reporting process are supported by IT systems. IT systems therefore, form a key component of LGAs’ Control Environments and a key focus of our audit. The NAO reviews both IT general and application controls within these environments as part of its annual financial statements audit. IT general controls are structures, policies, procedures and standards that support accounting and reporting processes. Effective operation of these controls helps ensure IT application controls are working as intended throughout the year. IT application controls operates at the accounting and reporting process level, consisting of access, configuration, and reporting controls.


The purpose of this paragraph is to facilitate public accountability in IT by highlighting material shortcomings and the related risks in applied Information Systems. The following weaknesses were noted from the assessment of IT Control Environment and Accounting system at a selected sample of LGAs.

4.2.1 IT Steering Committee not established An IT Steering Committee is a mechanism to ensure that the information systems Unit/Department is in harmony with the corporate mission and objectives. Basic functions of the Steering Committee includes:- • Review long range as well as short range planning • Review and approve major acquisitions of hardware and

software. • Review adequacy and allocation of resources • Support development and implementation of an

organization information security management programme

• Report to the management on IT activities

Our audit noted that most of the LGAs had not established the IT Steering Committees to govern and provide the strategic alignment required to fulfil the Councils’ goals and objectives.

4.2.2 IT strategy not formulated

Once the IT Steering Committee agrees on the future direction for IT, the decisions should be formalized and documented in a plan/document known as the IT strategy. The IT strategy is in fact the starting point for any investment in IT as it identifies future changes which have to be budgeted for. The decisions and planned changes specified within the IT strategy would then feed into the IT Department/Unit’s annual or short term plans. During audit we noted that a number of LGAs had not formulated the IT strategy.


4.2.3 Business Continuity and Disaster Recovery Planning Business continuity planning refers to the process which enables an organization to carry on with normal operations in case of a disruption. The main objective of producing a Business Continuity and Disaster Recovery Plan is to maintain the integrity of the organisation’s data together with the operational service and processing facilities if necessary; provide a temporary service until normal services can be resumed. In assessing the IT control environment within the LGAs we noted that the Business Continuity and Disaster Recovery Plans were not in use/established. In view of the fact that the most significant application system such as Integrated Financial Management Systems (IFMSs), plan, Local Government Monitoring Data base (LGMD) and the By Law Making Data Base (BLMD) are run at the Councils, the LGAs cannot afford to have implemented Business Continuity a Disaster Recovery Plans. The inadequacy of the physical and environment controls increase the risk associated with possible disaster.

4.2.4 Inadequate Environment and Physical access controls

4.2.4.1 Lack of fire Protection System

Lack of fire protection system for the computer rooms and operation areas which could result in considerable loss of processing facilities and damage to equipment in the event of a fire.

4.2.4.2 Inadequate Physical Access Controls

• Many LGAs are lacking IT policy that would have set limits of system accessibility, operational procedures as well as defined physical and logical controls.

• There were inadequate physical access controls in that the operation areas could be accessed without restriction.


4.2.4.3 IT Policies and procedures were inadequately defined IT policies and procedures pertaining to IT security, rotation of IT staff, and protection of data transmitted over telecommunication lines, review of operators’ logs, job description or layout chart in IT Units/Departments were not formally consolidated and approved to govern the IT environment. Without adequate policies and procedures to follow, it is unlikely that the actions of the staff would support the security objectives and this in turn, could result in issues of confidentiality, integrity or availability.

4.2.5 Lack of Skilled Staff

• Lack of skilled personnel to man the IT systems such as Epicor accounting package, Plan – Rep, Microsoft Excel and general computer operations.

• Lack of Systems Administrators to attend and debug slip ups and absence of backup facilities.

The staff in the information processing facility should have the required skills and knowledge to enable them to perform their tasks in an efficient and effective manner.

4.2.6 Integrated Financial Management System (IFMS) not fully Utilized • The Epicor system had and still has not been activated

to incorporate and process records of non- current assets, inventories, and generation of LPOs, Cheques, and generic reports. In addition, the system does not allow for individual Sub-vote Holders to prepare their bank reconciliation statements. Invariably, the system cannot summarize financial data to generate financial statements. The LGAs therefore supplements these short falls through manual work or through computer worksheets.

• Integration of the accounting systems is not yet sophisticated enough to reliably interface with the


mainframe at the Ministry of Finance and Economic Affairs. There are frequent breakdowns due to network failure and power interruptions. In addition, IFMS has not been rolled out to some LGAs; hence they are still operating manual accounting system and using computer spreadsheets to prepare accounts and financial statements.

4.2.7 Manually Operated Accounting System

Our test check had indicated that 28 Councils are still operating Manual Accounting System. The Manual Accounting Systems and records are more prone to errors and can be easily manipulated without a proper audit trial and hence reduce level of integrity of the reports being generated out of the manually operated system. In addition, processing of transactions and production of reports is time consuming as one needs to consolidate various reports using manual records. The Councils management in collaboration with the PMO – RALG and Ministry of Finance and Economic Affairs should consider fully adoption of an appropriate computerized Accounting System for the Councils in order to process transactions and for timely production/generation of financial and other related reports on line. In view of the large number of transactions committed by the Councils, it is obvious that the quality of financial accounting, cash management, reporting and related record keeping would be greatly enhanced through the use of Information Technology. Many of the control weaknesses observed can be corrected without expensive technology or specialist resources. Information security can be achieved through the appropriate implementation and management of basic processes, procedures and policies.


A summary of Audit Findings on the Assessment of Information Technology (IT) Controls Environment and LGAs involved is shown hereunder:-

Coun

cil

IT S

teer

ing

Com

mit

tee

esta

blis

hed

IT s

trat

egy

and

Polic

y no

t fo

rmul

ated

Busi

ness

con

tinu

ity

and

Dis

aste

r

Reco

very

Pla

nnin

g no

t In

adeq

uate

En

viro

nmen

t an

d

Phys

ical

Acc

ess

Cont

rols

La

ck o

f Sk

illed

sta

ff

Inte

grat

ed F

inan

cial

M

anag

emen

t Sy

stem

no

t fu

ll ut

ilize

d M

anua

l Acc

ount

ing

Syst

em

Arusha MC √ √ √ √ Karatu DC √ √ √ √ Meru DC √ √ √ Monduli DC √ √ √ √ √ Ngorongoro DC

√ √ √ √ √

Chamwino DC

√

Kongwa DC √ √ √ Bahi DC √ √ √ Mpwapwa DC

√ √ √

Kondoa DC √ Dar es Salaam C.C

√

Temeke MC √ Iringa DC √ √ Ludewa DC √ √ √ Makete DC √ √ √ Njombe DC √ √ √ Njombe TC √ √ √


Iringa MC √ Mufindi DC √ Misenyi DC √ √ √ Chato DC √ √ √ Biharamulo DC

√ √

Bukoba DC √ √ Bukoba MC √ √ √ Karagwe DC √ √ Ngara DC √ √ Hai DC √ Mwanga DC √ √ √ Rombo DC √ √ √ Siha DC √ √ √ Moshi DC √ √ √ Moshi MC √ √ √ Mwanga DC √ Same DC √ √ √ Hanang DC √ √ √ Kilwa DC √ √ √ √ Babati DC √ √ Babati TC √ √ Mbulu DC √ √ √ √ Kiteto DC √ √ √ Simanjiro DC √ √ √ Bunda DC √ √ √ √ Musoma MC √ √ √ Rorya DC √ √ √ Serengeti DC √ Musoma MC √ √ √ Musoma DC √ √ √ √


Chunya DC √ √ √ Mbeya DC √ √ √ √ Mbarali DC √ √ √ Kilombero DC

√ √

Ulanga DC √ √ √ √ Mvomero DC √ √ √ Mtwara Mikindani MC

√

Newala DC √ √ √ Tandahimba DC

√ √ √

Geita DC √ √ √

Kwimba DC √ √ √ Misungwi DC √ √ √ Magu DC √ √ Mwanza CC √ Ukerewe DC √ √ √ √ Mpanda DC √ Mpanda TC √ √ √ Nkasi DC √ √ √ Sumbawanga DC

√ √ √

Sumbawanga MC

√ √

Mbinga DC √ √ √ √

Namtumbo DC

√ √ √

Songea DC √ √ Tunduru DC √ √ √ Songea MC √ Bariadi DC √ √ √


Bukombe DC √ √ √ √

Kishapu DC √ √ √ Kahama DC √ √ √

Maswa DC √ √ √ Meatu DC √ √ √ Shinyanga MC

√ √ √ √

Shinyanga DC

√ √ √

Iramba DC √ √ √ Manyoni DC √ √ √ Singida MC √ √ √ √ Sikonge DC √ √ Tabora DC √ √ √ Tabora MC √ √ √ Handeni DC √ √ √ Lushoto DC √ √ √ Kilindi DC √ √ √ Nkinga DC √ √ √ Pangani DC √ √ √ Korogwe DC √ √ √ √ Muheza DC √ √ √ √ Tanga CC √ √ √ Kilosa DC √ √ √ √ Total 59 83 10 30 13 41 28

4.3 Cash Management The cash management accounting process covers the collection and receiving of Public Funds, and management of official bank accounts. Our audit test check on cash


management in the Councils noted various issues as summarised below:

4.3.1 Outstanding Matters in Bank Reconciliation Statements

The Local Authority Financial Memorandum of 1997, Order No.68 requires Councils’ Treasurers to ensure that all necessary reconciliations of individual accounts, cash books and bank statements are carried out on not more than monthly intervals and adjust the agreed differences immediately in the books of accounts. We noted that whereas bank reconciliation statements were being prepared by the Councils, no evidence was availed to audit as to whether they were reviewed by senior official of the Council or by a person independent of the preparer. During the F/Y 2008/2009 eighty seven (87) LGAs did not comply with the above Order; a situation which contributed to the existence of huge outstanding items in the bank reconciliation statements which were not adjusted as summarized below:- • A sum of Shs.3,160,893,295 was categorized as total

receipts in LGAs cash books but not in bank statements. This is a serious weakness since Councils’ revenues could be misappropriated as there was no evidence of review of the bank reconciliation statements by a person independent of the preparer.

• A total amount of Shs.10,895,917,505 in respect of cheques drawn in favour of various payees were not presented to bank until the closure of the financial year 30th June, 2009.

• A sum of Shs.350,907,782 was categorized as cash in transit. No efforts were made to ensure cash in transit was actually credited to the bank.

• A total amount of Shs.838,210,104 was debited to the LGAs bank accounts without being credited to LGAs cash books respectively.

• A sum of Shs.1,634,905,409 was recovered by bank on behalf of the LGAs without corresponding debits in the LGAs cash books.


A summary of outstanding matters in bank reconciliation statement for the F/Y 2007/2008 and 2008/2009 as shown on the table below:-

F/Y Receipt in

cash book not in bank

statement (Shs.)

Unpresented cheques

(Shs.)

Deposit in transit (Shs.)

Debit in bank statement not

in cash book(Shs.)

Receipt in Bank not in cash book

(Shs.)

2007/08 305,703,124 2,969,830,892 168,699,801 535,856,223 319,550,613

2008/09 3,160,893,295

10,895,917,505 350,907,782 838,210,104 1, 634,905,409

• From the above summary it shows that receipt in cash

book not in bank statements in financial year 2007/2008 was Shs.305,703,124 whereas during the year under review 2008/2009 was Shs.2,240,389,727.

• Cheques drawn in favour of various payees but not

presented to the bank in the financial year 2007/2008 was Shs.2,969,830,892 whereas the amount of cheques drawn in favour of various payees in financial year 2008/2009 was Shs.10,895,917,505.

• Cash in transit in financial year 2007/2008 was

168,699,801 whereas during the financial year 2008/2009 cash in transit was Shs.350,907,782.

• Shs.535,856,223 was debited to LGAs accounts but not

in cash book during the year 2008/2009 whereas an amount of Shs.838,210,104 was debited to LGAs bank account in the financial year 2007/2008 without corresponding credits in LGAs cash books.

Furthermore, a sum of Shs.1,634,905,409 was recovered by banks in the year 2008/2009. However, this amount was not reflected in LGAs cash books. In the financial year 2007/2008 a sum of Shs.319,550,613 was recovered by banks but the same was not reflected in LGAs cash book.


Errors and misappropriation of Council funds may go undetected for a long time without the knowledge of the management. It is in this respect the Council management should ensure that bank reconciliation statements are monthly prepared and approved by Senior Officer; also the necessary adjustments are recorded in LGAs books of accounts. The detailed list of outstanding items in bank reconciliation statements is included in this report as Annexure 3.

4.3.2 Cash survey and surprise check

(i) Surprise Cash Survey Order No.170 of the LAFM of 1997 requires the Director, or his authorised representative to arrange for a surprise check of cash on hand at regular intervals. However, the audit conducted in selected Councils revealed that 14 Councils neither had arrangement nor conducted surprise checks of cash on hand by the Director or his authorized representative. (Refer Annexure 4) (ii) Maximum limits for cash holdings Order No.352 of LAFM of 1997 states that “Maximum limits for cash holdings on premises shall be agreed upon by the Finance Committee and shall not be exceeded without express permission”. However, cash surveys conducted on selected Councils revealed that 3 Councils had no maximum limits for cash holdings agreed by the Finance Committee as per Order No.352 of LAFM of 1997. (Refer Annexure 4).

(iii) Non confirmation of Bank balances Shs.214,543,229

Audit review undertaken in Council’s cash management noted that three Councils operated bank accounts for the


year ended 30th June, 2009 with total bank balances of Shs.214,543,229. However, none of the bank balances were confirmed to have been accompanied by certificate of balances dully certified and signed by Bank branch managers. (Refer Annexure 4).

4.4 Management of Non Current Assets 4.4.1 Non- current assets management

Most of the Local Government Authorities face a unique challenge on assets management. The challenge became much more complex during the year under review when all Councils started adopting the International Public Sector Accounting Standards (IPSAS) accrual basis of accounting when preparing of their financial statements. Under IPSAS accrual basis of accounting, effective management of assets is crucial not only for preventive maintenance and theft deterrence but also, bring about transparency in the recognition and disclosure of the Councils’ resources including non current assets.

The Local Government Authorities are managing significant infrastructures and community assets such as roads, buildings, properties, equipment that are the means by which they deliver most of their critical services to the communities. It is essential that LGAs clearly demonstrate the intended use of assets to enable the communities to see what services will be provided if those plans are implemented. For the most LGAs, these assets also, represent a big value in the Balance Sheet (Statement of Financial position) because they need to be maintained and reviewed, and require continual capital development to deal with growth and changing standards. Also, assets often generate the great value of expenditure in the summary Statement of capital expenditure and its financing.


The following are the shortcomings noted during the assessment of management of non – current assets involving Forty four(44) Councils as shown in the table below:

S/N Name of Council Amount (Shs) Audit Findings 1. Arusha MC 206,807,388

Purchased and paid for Toyota L/Cruiser hard top but not delivered

2. Arusha DC - Assets in respect of District Secondary Schools were not valued and included in the statement of financial position of the Council, although they were properly disclosed as a note in the financial statements.

3. Karatu DC - Assets in respect of District Secondary Schools were not valued and included in the statement of financial position of the Council, although they were properly disclosed as a note in the financial statements.

4. Ngorongoro DC - Two vehicles (STH 7476 & SM 1154) were sent to garages for repairs and maintenance since year 2001, up to the date of


audit, they are still in the garages

5. Igunga DC Inadequate maintenance of assets register

6. Moshi MC - Assets including Council Quarters, Schools, Health Centers and various furnitures, which are owned and used by the Council were not valued and included in the statement of financial positions under plant, property and equipments.

7. Siha DC The Council does not maintain Assets Register,

8. Mwanga DC - Improperly maintenance of fixed asset register, Other assets not coded for control purposes and Non maintenance of inventories records

9. Kilosa DC 120,619,620 Additional non current assets not included in schedule

10. Mbulu DC - Three Isuzu Lorries with registration Nos. SM 1664, SM 5946and SM 1508 were not recorded in the fixed asset register

11. Simanjiro DC - Three motor


vehicles whose values could not be obtained were not recorded in the fixed asset register

12. Nzega DC - Non maintenance of fixed assets register

13. Urambo DC 921,738,813 Non – current assets register was not updated to reflect additional of non current assets during the year

14. Hai DC 2,885,454,827 Non maintenance of assets register There is no non current assets register in place to record and monitor movement of movable assets

15. Same MC 5,694,288,459 Non current assets not supported by schedules of analysis

16. Kyela DC - Fourteen (14) Motor vehicles and 13 motorcycles were observed to have not been included in the fixed assets schedule hence omitted in the financial statements.

17. Mbozi DC 65,626,200 Motor vehicles/investments not supported by registration Cards/certificate of investments –


18. Ileje DC - four motor vehicles were found grounded at Councils yard for more than 3 years without any effort to dispose them off

19. Rungwe DC 7,000,000 One photocopy machine was bought from M/s Heshban not recorded in the fixed Asset register.

20. Newala DC - The Council does not properly protect its assets against fire

21. Mtwara DC 16,963,614,000 Non Current assets reported in the Statement of Financial Position had no Title deeds.

22. Nanyumbu DC - The Council does not properly protect its assets against fire

23. Songea DC - The register does not disclose information regarding year of purchase

24. Bariadi DC - No appropriate fire protection devices to protect the Council’s assets against fire

25. Kilolo DC - 10 motor vehicles and 20 motor cycles owned by the Council but not reflected in the Property Plant and Equipment


schedules 26. Ludewa DC 71,820,616 Valuation

certificates was not produced.

27. Mufindi DC 65,536,975 Property, Plant and Equipment was not depreciated

28. Kasulu Dc - The Title deed for Administration block and District hospital, which are owned by the Council are missing

29. Kigoma DC - The Land on which Administration block and other Council buildings located does not have Title Deed

30. Lindi DC - Three (3) motor cycles ( Honda XL with registration Nos TZH 3363, TZH 3371 and TZH 3369 for which their value could not be determined were found in the yard, but the same were omitted in the fixed asset register

31. Kilombero DC 5,694,288,459 Non current assets not supported by schedules of analysis Non current assets register was not being maintained properly

32. Morogoro MC - Non current assets


not recorded in the fixed assts register

33. Ulanga DC 1,581,383,731 Non current assets procured during the year were not recorded in the asset register.

34. Mvomero DC 747,790,000 Assets acquired during the year were not recorded in the asset register

35. Geita DC - The Council does not keep up to date its fixed assets register

36. Ukerewe DC 5,644,558,655 The Council’s did not maintain assets register

37. Kwimba DC 307, 244,689 Motor vehicles not recorded in the register

38. Mbinga DC - Valuation had been done but the report thereof had not been availed to audit, the register does not disclose information regarding year of purchase or acquisition of assets, the register was not updated to reflect the movement of various assets such as disposals, allocations and reallocations.

39. Songea DC - The assets register does not record all assets held e.g.


motor vehicles and infrastructural assets-roads

40. Songea MC 904,265,300 The Title Deeds for Council assets were not made available for audit verification

41. Singida MC 3,710,416,853 Title deeds for buildings were not produced for audit verification, Office and residential furniture and equipment worth Shs.143,251,358 were not coded.

42. Korogwe DC 4,614,682,153 Schedules and the locations of the assets not disclosed

43. Muheza DC - Primary schools and Dispensaries of the Council as listed at Note 25 were not included in the financial statements for the year ended 30thJune, 2009.

44. Pangani DC 14,000,000 Missing fishing boats

The LGAs should continue to update the assets records, and ensure that proper records are maintained for accurate reporting in the financial statements of each year.


4.5 Outstanding debtors amounted to Shs.35,644,785,554 Review of LGAs financial statements and their supporting schedules disclosed outstanding debtors amounting to Shs.35,644,785,554 as detailed in Annexure 5 in respect of 113 LGAs, which had not yet been cleared. The major components of the debtors in the most of the Local Government Authorities include:

Amounts due from Central Government, Various prepayments , Account receivable from revenue collecting agents Staff advances and imprests and Women and Youth loans

Holding funds in the form of debtors is against Order Nos.120 and 121 of the Local Authority Financial Memorandum of 1997 but also, affects the level of Councils’ working capitals and ultimately hamper implementation of the planned activities in the scheduled time due to liquidity problems.

The table below shows a trend of outstanding debtors for the last two years period ending 30th June 2009.

Financial Year Amounts (Shs.) No. of Councils involved

2007/2008 8,675,739,790 115 2008/2009 35,644,785,554 113

The above trend shows a dramatic increase of debtors by Shs.26,969,045,764 or 311% from Shs.8,675,739,790 reported in the previous year to Shs.35,644,785,554 recorded during the year under review. The major attribute of the massive increase of debtors is the increased transparency in financial reporting process resulted from the adoption of IPSAS accrual basis of accounting which brought about more disclosures in the financial statements.


Failure to collect outstanding debtors when fall due is a reflection of weakness and ineffective control over receivables and prepayments and partly attributed by lack of clear policies and procedures for debt management. Councils are argued to exert more efforts and seriousness in monitoring their financial resources including establishment of policies and procedures for guidance, and put forward the best way of managing debtors including all kind of receivables and prepayments without affecting other activities and customers relation.

4.6 Outstanding Creditors amounted to Shs.51,311,586,762

Timely settlement of creditors is crucial to maintain good reputation and harmony between Councils and suppliers of good and services as well as creating confident to the society they serve.

However, review of the financial statements of Local Government Authorities for the year ended 30th June 2009 in respect of 113 Councils disclosed outstanding creditors amounting to Shs.51,311,586,762 which is an increase of Shs.35,701,180,599 or 229% compared to Shs.15,610,406,163 reported during the previous financial year. The major parts of the reported creditors comprise of:

Trade creditors Staff claims LAPF and other employees’ benefits 20% shares to villages

Some of the Councils had accumulated liabilities up to Shs.3 billions as reflected in Annexure 6. This cast a doubt on the ability to settle them taking into account the financial distress facing most of the Local Government Authorities.


The significant increase of creditors as for the case of debtors is a result of increased level of disclosure in the financial statements by most of the Councils adopting IPSAS accrual basis of accounting as common reporting framework. It is my hope that by adopting IPSAS accrual basis of accounting transparency will be enhanced in preparing the financial statements and the Councils will take it as a challenge to improve accountability and minimize liabilities, which add no value to the development of the LGAs. Local Government Authorities are strongly argued to settle their commitments when fall due and institute adequate control, policies and procedures to ensure that Councils’ managements are accountable for any fruitless commitments they create.

4.7 Missing revenue earnings receipt books

Order Nos. 101 and 102 of the Local Authority Financial Memorandum, 1997 stipulate that “All officers issued with receipt books must render a return of used and unused receipts at the end of every month in the prescribed form, and all losses of accountable documents must be reported immediately to the Proper Officer. A copy of the report should be forwarded to the Controller and Auditor General and the assistant Proper Officer”. Contrary to the above orders, a total of 1341 revenue receipt books from 50 Councils were noted missing and therefore not availed for audit verification. • Since these revenue receipt books were meant for

collection of Council’s revenue, auditors could not ascertain how much revenue either had been collected.

• There is great likelihood of outright theft of Council’s revenues by the revenue collectors and it ends up distorting the revenue budget of the Council.


The Council management should institute adequate Internal Control System over the management of revenue receipt books so as to eliminate possibilities of loss of Council’s revenue and missing revenue receipt books are traced and submitted for audit verification.

Remidial action on the part of Council management including prosecution of defaulting revenue collectors should be taken. List of missing revenue receipt books is shown as Annexure 7.

Summary of Missing revenue receipt books for financial year 2007/2008 and 2008/2009

Year No of missing books No of Councils involved

2007/2008 860 43 2008/2009 1341 50

4.8 Revenue collection not remitted by Collecting Agents

Shs. 1,095,113,399 To comply with the Order No.110 of the Local Authority Financial Memorandum of 1997 all revenue collections by designated officers shall be remitted to the Councils’ cashiers for safe custody. During the financial year under review, out of the selected audited Councils, 43 were noted to have a sum of Shs.1,095,113,399 as revenue collected at various centres by collecting agents apparently had not been remitted to the Councils contrary to Order No.110 of the LAFM of 1997. List of Councils and amount involved are as shown in Annexure 8.


A Summary of revenue collections not remitted to the Councils for two financial year 2007/2008 and 2008/2009 is as shown below:-

Year Revenues not remitted (Shs.)

No. of Councils Involved

2007/2008 421,213,641 22

2008/2009 1,095,113,399 43

Management of Councils should strengthen internal controls over collection of revenue from own internal sources. This could include strengthening mechanism of entering to contracts with revenue collecting agent and following up remittance from those agents.

4.9 Payments made without proper supporting documents (Improperly vouched expenditure) Shs.5,313,071,671 Order No. 5(c) of the Local Authority Financial Memorandum of 1997 requires all payments made from Council funds to be supported by proper supporting documentation. During our audit, based on sample selected, we noted that some of the supporting documents of the reported expenditures totaling Shs.5,313,071,671 in respect of 62 Councils were missing; only payments vouchers were available for our verification. The list of Councils with improperly vouched payments is shown as Annexure 9. A Summary of improperly vouched expenditures for financial year 2007/2008 and 2008/2009

F/Year Amount(Shs.) No. of Councils

involved

2007/2008 3,590,228,595 69

2008/2009 5,313,071,671 62


All payments made must be supported by appropriate supporting documents such as invoices, receipts, delivery notes, advance requests etc. to enable verification of the payments authenticity and occurrence. Such supporting documents should be kept by Council management for verification whenever required.

4.10 Missing payment vouchers (Unvouched expenditure) Shs.2,526,117,587

Unvouched expenditure is an expenditure for which there is complete absence of payment voucher and other documentary evidence to substantiate the authenticity of expenditure. During the financial year 2008/2009 thirty three (33) Councils out of 133 audited had effected payments amounting to Shs.2,526,117,587 supporting payment vouchers were not made available to auditors, hence limiting the scope of auditors. A payment without supporting payment vouchers lacks important information in regard to such payments e.g. the nature, purpose, and type of the payment. Furthermore, it can surely be an avenue of misappropriation of Council funds. Since this is a persistent problem with the majority of our Councils for a long period of time, I would like to remind accounting officers and management of Councils of their responsibility in ensuring that the Councils’ accountable documents including payment vouchers are properly safeguarded and should be made available for audit verification when needed. The tested Councils with unvouched expenditures are as shown in Annexure 10. A summary of Missing payment vouchers for F/Y 2007/2008 and 2008/2009 is as shown below:-


F/Year Amount(Shs.) No. of Councils involved

2007/2008 1,370,245,729 45

2008/2009 2,526,117,587 33

Council management should keep all original documents supporting payments for reported expenditure for each financial year.

4.11 Unspent Development Funds/Grants Non utilization of Government grants) Shs.88,720,629,195

Development funds and grants are provided to LGAs to construct new infrastructures or to rehabilitate existing infrastructures according to defined priorities against a broad investment menu, with a view to empower communities, improve service delivery and reducing poverty. The majority of funds are spent within the key poverty reduction areas (Heath, Education, Water and Sanitation, Roads and Agriculture). During the financial year 2008/2009, the results of development funds and grants showed that 133 LGAs had been granted a sum of Shs.328,203,178,845 to finance Councils Development Projects. However, as at 30th June, 2009 Shs.239,482,549,650 had been spent, leaving unspent balance of Shs.88,720,629,195 or 27% involved 118 Councils. The detailed list of Councils and amounts of unspent is as indicated in Annexure 11.

A Summary of unutilized Grants for 2007/2008 and 2008/2009 is as shown below:

Year Amount

(Shs.) No. of Councils

involved 2007/2008 99,114,082,540 111 2008/2009 88,720,629,195 118


Unutilized funds imply that some activities were either partially or not implemented at all; thus the earmarked services/benefits to the intended Community have been delayed. This may also bring about budget revision to accommodate possible price fluctuations due to the effect of inflation.

4.12 Payroll Audit

Our review of the expenditure on salaries in respect of the Councils revealed some shortcomings as summarized below:

4.12.1 Unclaimed Salaries not remitted to Treasury Shs.1,755,207,927 Order No. 307 of the LAFM of 1997 requires that all unclaimed salaries should be rebanked after a maximum of 10 (ten) working days. Also, instruction from Ministry of Finance and Economic Affairs issued vide letter Ref. No. EB/AG/5/03/01/Vol.VI/136 dated 31st August, 2007 requires unclaimed salaries to be paid back to the Treasury through the Regional Administrative Secretary. Our audit test check on salaries payments revealed that unclaimed salaries amounting to Shs.1,755,207,927 in respect of 58 Councils were noted to have not been paid to Treasury as per instruction. Refer Annexure 12.

4.12.2 Payments made to Retired, Absconded and Terminated employees Shs.792,949,073

An audit test on payrolls has revealed that a sum of Shs.792,949,073 in respect of 40 Councils was paid directly to the individuals’ bank accounts as salaries. Our audit scrutiny of the computer payrolls, control sheets and unclaimed salaries register for the financial year ended 30th

June, 2009 disclosed that Council employees who either had died, retired, resigned, terminated or absconded continued appearing in the computer payrolls of the Council. (Refer Annexure 13)


4.12.3 Non remittance of Statutory deductions Shs.1,114,230,706 Our audit test on the sample selected of 20 Councils for verifying statutory deductions for remittances noted that a sum of Shs.1,114,230,706 deducted from Councils’ employees’ salaries were not remitted to LAPF. Refer Annexure 14.

4.12.4 Fictitious Salary Payments paid to Council employees Shs.162,887,503 During our audit on a sample selected Councils, we noted that 327 and 17 pairs of employees from Rombo and Hai District Councils respectively had been paid their monthly salaries through bank accounts for the months of July – November, 2008, January – February, 2009, and May 2009 agregating to Shs.162,887,503. Furthermore, we noted that the payments were being effected in different pairs of employees from same office, using same bank account at NMB Rombo and Hai Districts using two different check numbers for which their monthly salaries were being deposited into same bank account. A sample of five pairs for Rombo and Hai District Council is as shown below:

A. Rombo District Council 327 pairs of employees

Shs.154,418,162

Department Code

NMB Bank Account No.

Check No. Amount (Shs)

1. 5004 4042401251 6195445 156,649 5004 4042401251 7073786 441,603

2. 5007 4042401617 10289444 153,631 5007 4042401617 10115790 118,187

3. 5004 4042401667 6195308 74,771 5006 4042401667 2180887 445,343

4. 5007 6801000256 6665090 267,246 5007 6801000256 6783806 135,452

5. 5007 6801002653 8083142 240,830 5007 6801002653 7115455 132,787


B. Hai District Council 17 pairs of employees Shs.8,469,341

Department Code

NMB Bank Account No.

Check No. Amount (Shs)

1 5007 6804000704 11253446 149,300.00

5007 6804000704 9923885 105,513.87

2 5007 6804001379 10137682 108,064.08

5007 6804001379 10121209 152,055.08

3 5007 6804001407 8979704 296,678.80

5006 6804001407 8409768 73,761.18

4 5007 6804001439 9728851 185,215.35

5007 6804001439 7057379 353,065.30

5 5004 6804001817 11407526 225,000.00

5004 6804001817 5791541 266,741.30

Council management should investigate the circumstances in which such anomalies arise where by pairs of employees are being paid their monthly salaries using same bank account with a view of fixing responsibility to the parties involved and prevent future reoccurrence.

4.12.5 Payments of salaries paid direct by the Treasury without

being approved by the respective Councils Shs.1,417,742,757 Orders 302 to 308 of the LAFM, 1997 require the Council management to keep updated register of all employees which are the base for the payment of monthly salaries and wages. The motive behind this is to ensure that salaries are only paid to the bonafide employees. Contrary to the above Orders, our audit test check on the selected Councils revealed that a sum of Shs.1,417,742,757


was paid direct by the Treasury through employees respective Bank accounts without routing them through the Councils for being endorsed and approved. Furthermore, in some cases salaries paid direct were not supported by the computer payroll print outs contrary to Order 5(c) of LAFM of 1997. The Councils tested are as listed below:

S/N Auditee Amount Shs. 1 Rombo District Council 63,051,482 2 Kibaha Town Council 74,585,518 3 Bagamoyo Distrct Council 132,612,432 4 Mbeya District Council 1,147,493,325

Total 1,417,742,757 In order to have the expected internal control system in payment of salaries, we are of the opinion that all salaries to Council employees should be paid as per the required Orders. In no way the Treasury should pay salaries direct to employees’ bank accounts without the endorsement and approval of the Council management.

4.12.6 Audit Committees

The PMO RALG Guideline with reference No.CHA:3/215/01 dated 27th November, 2007 requires Accounting Officers to establish audit committees, that comprising of independent members, with the responsibility to assist in strengthening the system of internal controls. However, during our audit we have noted the following:

(i) Appointment of Chief Internal Auditors as Secretaries to the Audit Committees

As pointed out in previous years audit reports, the Chief Internal Auditors are still Secretaries to the established Audit Committees. Since Audit Committees have a direct responsibility of reviewing the internal audit coverage and


approval of annual strategic audit plans and periodical review of the performance of internal audit functions, Chief Internal Auditors continuing to be secretaries/members of Audit Committees entails conflict of interest and has a bearing on the efficiency and effectiveness of the Audit Committees.

(ii) Review of effectiveness of Audit Committee’s performance in LGAS

As pointed out in our previous years audit report the issue of Audit Committee existing without Audit Committee Charter which sets out the Committee’s objectives, authority, composition and tenure, roles and responsibilities, reporting and administrative arrangements still persist. Our audit review of a sample of 46 Councils revealed that 11 Councils did not conduct Audit Committee Meetings, 27 did not have Audit Committee Charter and 17 had no Audit Committee report prepared and copied to the CAG. Issues which are worth reporting are as shown in Annexure 15.

Based on operational issues noted above, PMO-RALG should issue guidance on formation of LGA’s Audit Committees which will aim at strengthening the Audit Committees functions and enable them to function efficiently and effectively.

4.12.7 Review of effectiveness of Internal Audit performance

in LGAS

In my previous audit on the performance of Internal Audit in LGAs I pointed out issues which were performance indicators of ineffectiveness of Internal Audit functions, which again have reccured.

During the year under review (2008/2009) we have again evaluated the performance of Internal Audit functions in the Councils in line with requirements of Sect. 45(1) of the


Local Government Finances Act, 1982 (revised 2000) and Orders No.12 – 16 of LAFM, 1997 noted that there are issues which required the attention of the authority concerned on the effectiveness of the performance of Internal Audit in LGAs, these issues are:

• Most of the Councils have established Internal Audit

Units but the problems remains to be understaffed having one to two staff and experiencing under funding.

• Scope of coverage for Internal Auditors is narrow as much concentration is placed on audit of vouchers rather than reviewing the systems performance, projects management, financial reporting and operational procedures towards attainment of Councils’ objectives.

• Many Councils’ management do not respond and take action to the Internal Audit observations raised by Internal Auditors. In this respect the work of Internal Auditors is not given enough weight it deserves in strengthening Councils’ financial management.

• Internal Auditors’ annual audit programme of works are not being approved by the Accounting Officers and reviewed by Audit Committee.

4.13 LGAs Financing Analysis

Our audit review on different sources of funding to LGAs revealed various notable issues as summarized below:-

4.13.1 Financial performance of LGAs For the year 2008/2009

A review of Income and Expenditure of LGAs for the financial year 2008/2009 revealed the following scenarios:

(i) Over expenditure by Councils Shs. 25,815,903,623 Forty six (46) Local Government Authorities have incurred a total expenditure of Shs. 489,438,406,774 against total income of Shs. 463,622,503,151 resulting in an excess expenditure of Shs. 25,815,903,623. Details of this analysis and relevant LGAs are shown in Annexure 16.


(ii) Under expenditure by Councils Shs. 47,171,455,877

Eighty seven (87) Local Government Authorities have incurred total expenditure of Shs.976,332,807,352 against total income of Shs.1,023,504,263,229 resulting in an under expenditure of Shs. 47,171,455,877. Details of this analysis and relevant LGAs are shown in Annexure 17.

4.13.2 Revenue accruing from LGAs own internal sources

against Recurrent Government Grants

Total revenue from LGAs own sources has increased from Shs. 93,545,987,812 (2007/2008) to Shs.110,852,341,512 (2008/2009) or (11%). However, we noted that despite a slight increase in revenue collections but the Councils’ ability to finance its recurrent operation is still very low. This could be evidenced by the fact that revenue collections accruing from LGAs own sources when compared with the recurrent Government Grants, we get a picture that the LGAs are persistently depending on Government Grants for its operations. This implies that LGAs are not soliciting other potential avenues sources for boosting their revenue base. For example, revenue from LGAs own sources in the year 2008/2009 was Shs.110,852,341,512 as against Shs. 1,437,216,933,939 as summarized below:-

Year Total revenue from LGAs own

sources

(Shs.)

Total Recurrent Government Grants

(Shs.)

% own sources to Recurrent Government

Grants

2008/2009 110,852,341,512 1,437,216,933,939

8%

The low level of Councils revenue collections from own internal sources has been facilitated inter-alia by the fact that LGAs are not aggressive enough in collecting revenues from already indentified internal sources as summarized below:


(i) Laxity in control over revenue collection accuruing from Bill boards advertisements Shs.1,960,425,011

We noted revenue collection amounting to Shs.1,960,425,011 in respect of Bill boards advertisements had not been collected from a sample of 5 Councils as shown in Annexure 18.

In addition, we noted that Bill boards and sign Boards are erected without approval of Councils Tender Boards, which contravenes Reg.19 (2) of Local Government Authorities Tender Boards of 2007. Also, 496 Billboard advertisements and signboards erected in two Councils without being recorded in the appropriate register and allocated with serial numbers.

(ii) Unremitted Cashewnuts Export Levy

Shs.2,063,206,119 We noted revenue collection amounting to Shs.2,063,206,119 in respect of Cashewnuts Export Levy had not been collected from a sample of 7 Councils as shown in the table below:-

SN Council Total Kgs 10% export

Levy (Shs.) 5% levy not

remitted (Shs.) 1. Newala DC 6,754,505 5,247,895,980 262,394,799 2. Tandahimba DC 20,702,182 16,084,509,200 804,225,460 3. Nanyumbu DC 6,064,201 4,711,565,980 235,578,299 4. Mtwara –

Mikindani MC 424,470 329,790,880 16,489,544

5. Mtwara DC 5,189,597 4,032,044,560 201,602,228 6. Masasi DC 11,261,268 8,749,414,360 437,470,718 7. Tunduru DC 2,417,079 210,890,143 105,445,071 Total 2,063,206,119

(iii) Uncollected revenue on Produce Cess Shs.313,887,389 We noted revenue collection amounting to Shs.313,887,389 in respect of Produce Cess had not been collected from a


sample of 2 Councils of Tandahimba and Masasi as shown in shown in the table below: S/N Council Amount not collected

(Shs) 1. Tandahimba DC 256,800,611 2. Masasi DC 57,086,778 Total 313,887,389

From the above sample selected we can conclude that, there is laxity by almost all Councils in soliciting other avenues of collecting revenues and even maximizing on the exisiting identified sources. Therefore it is the duty of all Councils’ management to make adequate financial and accounting arrangements to ensure the proper recording of all monies due the Councils and the proper collection, custody, and banking of such monies.

4.13.3 Audit of Councils Budgets for financial year 2008/2009

Our audit test check on the execution of Councils budget for the financial year 2008/2009 revealed some of the issues which indicate that Councils are not adhering to budgetary provision. The main notable issues includes Councils budget over runs in some items and having deffered payments. A sample of 34 Councils selected is as summarized below: S/N Council Unbudgeted

expenditure/ Over spent compred to

budget (Shs.)

Deferred payments

(Shs.)

1 Geita DC 15,216,687 2 Kwimba DC 1,462,553,367 3 Tunduru DC 7,989,450 4 Namtumbo DC 9,132,420 5 Sikonge DC 8,310,000 6 Tabora DC 27,767,930 7 Bukombe 5,940,564 8 Iringa DC 143,230,900 9 Iringa MC 180,220,452 10 Kilolo DC 69,530,411


11 Ludewa DC 141,870,499 12 Makete DC 258,277,711 13 Njombe DC 115,952,171 14 Kilombero DC 226,599,070 15 Ulanga DC 2,651,444,728 16 Mvomero DC 912,353,000 17 Kiteto DC 1,351,039,751 18 Mbulu DC 1,220,461,704 19 Simanjiro DC 1,011,318,710 20 DSM CC 9,017,298,000 21 Karatu 2626,855,900 22 Meru DC 19,527,800 23 Ngorongoro DC 15,360,800 24 Kilwa DC 4,159,000 25 Bunda Dc 99,868,264 26 Mara MC 1,423,869,369 27 Songea DC 16,603,005 28 Handeni DC 15,603,420 29 Lushoto DC 15,889,000 30 Korogwe DC 31,837,902 31 Mkinga DC 14,209,100 32 Moshi MC 13,869,856 33 Moshi DC 91,769,424 34 Same DC 16,479,000

Total 11,326,398,363 11,916,011,002

In this situation, there is a risk that funds for the financial year 2008/2009 had been utilized to finance payments from the previous year 2007/2008 while approved activities for the year under review might not be fully implemented. Also, incurring expenses derived from the previous years defeats the concept of the budget system embraced by the Councils and encourages running two parallel budgets concurrently which may adversely affect implementation of the approved activities for the year under audit.

4.14 Operational Performance of Special Funds 4.14.1 Women and Youth Revolving Fund

The Councils in collaboration with the Central Government established the fund for the aim of facilitating women and


youth groups by giving small loans within the areas of their jurisdiction. Our review of the operation performance of the Fund observed that out of the sample of Councils selected, 41 Councils did not prepare the Women and Youth Revolving Fund statements to show the financial position of the Fund. This is contrary to the requirements of Order 84 (iii) of the Local Authority Financial Memorandum, 1997. In addition, there were outstanding Loans to Women and Youth Groups in respect of 20 Councils out of the sample selected amounting to Shs.355,501,123. Non recovery of loans denies other groups to have advantage of getting loans. The table below summarises notable issues in respect of Women and Youth Revolving Fund:-

SN. Council Fund Financial

Statements not prepared

Outstanding Loans

Amount ( Shs.) 1. Karatu DC √ 1,408,000 2. Kilombero DC √ 8,319,753 3. Morogoro MC √ - 4. Mvomero DC √ - 5. Morogoro MC √ - 6. Ulanga DC √ 3,032,000 7. Kasulu DC √ 7,941,000 8. Kigoma DC √ - 9. Hai DC √ 9,901,600 10. Moshi DC √ 7,350,000 11. Moshi MC √ 29,712,500 12. Mwanga DC √ - 13. Rombo DC √ 18,137,856 14. Same DC √ - 15. Siha DC √ - 16. Babati DC √ - 17. Hanang DC √ - 18. Kilindi DC √ - 19. Handeni DC √ -


20. Korogwe DC √ - 21. Korogwe TC √ - 22. Mpanda TC √ - 23. Nkasi DC √ - 24. Sumbawanga DC √ - 25. Mbinga DC √ - 26. Namtumbo DC √ 12,430,000 27.. Bariadi DC √ 31,352,372 28. Shinyanga MC √ 8,503,050 29. Ileje DC √ 3,695,266 31. Mbeya DC √ 75,072,017 32. Lindi DC √ 4,371,100 33. Lindi TC √ 8,069,300 34. Bagamoyo DC √ 6,068,475 35. Urambo DC √ 73,170,434 36. Kiteto DC √ - 37. Mbulu DC √ - 38. Simanjiro DC √ - 39. Kilosa DC √ - 40. Biharamilo √ 15,415,000 41. Mwanza CC √ 31,251,400 Total 355,501,123

The Councils management should prepare analysis of the Fund accounts showing the total accumulated funds since its establishment; the amount contributed by Central Government, the Councils and other donors including NGOs for each year. In addition, the analysis should indicate cash available; the outstanding loans, total interest realized and the Council’s outstanding contributions to the Fund. Furthermore, Management should set strategy for recoveries of long outstanding loans in order to enable other groups improve their standard of living through loans funding.


4.14.2 Community Health Fund Community Health Fund was established in 1997 being one among financial resources identified by the Government to encourage community on cost sharing in the health sector in Tanzania. Collections and utilization of the Funds is clearly stated in Circular No. 2 of 1997 issued by the Ministry of Health and Social Welfare which directed that the funds will be utilized for various approved activities including medicine, drugs, hospital equipments, minor building repairs, fuel and night out allowance upon follow up procurement of medicines and medical equipment from approved suppliers.

During the year under review, we conducted test checks on management of the Community Health Fund in 3 Councils and we found Councils were not preparing annual financial statements for the Fund and that cost sharing totaling Shs.184,319,050 under the Health Programme were utilized for activities which were not specified in Circular No. 2 of 1997 issued by the Ministry of Health and Social Welfare as summarized below:-

Council Amount (Shs.) 1 Njombe DC 43,239,050 2 Iramba DC 25,000,000 3 Iringa DC 116,080,000 Total 184,319,050

We highly recommend that Councils should prepare annual financial statements for the Fund. Also, Councils should spend the Community Health Funds for the intended and approved activities as stated in the circular No. 2 of 1997 issued by the Ministry of Health and Social Welfare.

4.15 20% Contributions not transferred to Villages/Wards Section 9 (e) of LGFA No.9 of 1982 state that the revenue source of the Village Council shall consist of all revenue


accruing from the Government, the District or from any Private individual or Public Institution by way of contributions, grants-in-aid endowments or any other manner of payments also Order 91 of LAFM, of 1997 state that, the Director shall ensure each village Council within the local authority’s jurisdiction are in receipt of funds from the local authority or either indirectly through a lien on certain Council revenues. In 2004 the Government abolished some of own sources of taxes and decided to make compensation to Councils for all abolished taxes. The Councils’ directed to transfer 20% of the abolished taxes to the Wards and Villages for administration of village and ward offices and support to development activities.

Audit sample of 23 Councils listed below noted that the Councils did not remit Shs.3,042,246,636 in respect of 20% of compensation grants from the Central Government for abolished revenue sources to the Villages and Wards:-

SN. Council Amount (Shs.) 1. Iramba DC 238,221,540 2. Manyoni DC 153,012,160 3. Singida DC 288,141,980 4. Singida MC 164,540,569 5. Igunga DC 213,020,304 6. Sikonge DC 67,132,184 7. Nzega DC 326,203,808 8. Tabora MC 99,090,002 9. Urambo DC 26,878,102 10. Ulanga DC 84,372,840 11. Kilombero DC 44,862,450 12. Morogoro MC 89,672,478 13. Mvomero DC 99,795,157 14. Shinyanga DC 159,070,988 15. Bahi DC 51,353,060 16. Chamwino DC 63,581,464 17. Dodoma MC 152,833,442


18. Kondoa DC 35,000,000 19. Kongwa DC 105,443,680 20. Mpwapwa DC 92,119,863 21. Kilosa DC 221,080,073 22. Mbeya CC 112,296,630 23. Mwanga DC 90,942,802 Total 3,042,246,636

From the table above, we can conclude that the villages’ communities have been denied their respective shares of the development funds and the planned activities at Villages and Wards levels could not be implemented.


CHAPTER FIVE

5.0 REVIEW OF CONTRACTS AND COMPLIANCE WITH PUBLIC PROCUREMENT PROCESSES IN LGAs

5.1 Introduction

The Public Procurement Act No. 21 of 2004 defines procurement as the process involving buying, purchasing, renting, leasing or otherwise acquiring any goods or works or services by a procuring entity spending public funds and includes all functions that pertain to the obtaining of any goods works or services including description of requirements, selection and invitation of tenderers and preparation and award of Contracts. Given the fact that substantial amount of government resources devoted into the procurement of goods and services, there is a need for enhancing financial discipline and transparency throughout procurement process for the sake of achieving optimal level of value for money.

5.1.1 Compliance with procurement laws Section 44(2) of the public Procurement Act No.21 of 2004 and Regulation No. 31 of the Public Procurement (Goods, Works, Non-consultant services and Disposal of Public Assets by Tender) Regulations, 2005 requires me to state in my annual audit report whether or not the audited entity has complied with the provisions of the law and its regulations. In view of this responsibility to procuring entities including the Councils, my general statement is that the degree of compliance with Public Procurement Legislation learned from the transactions tested as part of my audits is still not satisfactory as far as the legal requirements are concerned.


5.2 Effectiveness of Procurement Management Unit (PMU)

The Public Procurement Act No.21 of 2004 Section 34 and Local Government Authorities Tender Boards Regulations, of 2007, Reg.22 provides that in every procuring entity (PE) there shall be established a PMU staffed to an appropriate level. The PMU shall consist of procurement and other technical specialists together with the necessary Supporting and Administrative Staff. Review of an effectiveness of PMU in various Councils shows an improvement compared to situation reported in my last year’s audit report. During the year under review, 11 Councils were noted with ineffective Procurement Management Units compared to 39 Councils reported in the previous year’s audit report. The noted weaknesses include the Head of PMU reporting to the Council Treasurer and failure to prepare monthly procurement and other reports for Tender Boards as per Section 35 (o & q) of PPA, 2004 and Reg 23 of LGATBR, 2007. Summary of the noted weaknesses is as detailed in the table below:

S/No. Name of Council Audit findings 1. Bunda DC PMU is considered as a committee rather than

a unit in the organization and most of the members are not professional in procurement

2. Kongwa DC The head of the PMU reports to the District Treasurer contrary to Reg. 22 (5) of LGATB 2007, which requires the PMU to report direct to the Accounting Officer.

3. Kondoa DC The head of the PMU reports to the District Treasurer contrary to Reg. 22 (5) of LGATB 2007, which requires the PMU to report direct to the Accounting Officer

4. Kasulu DC The PMU did not give notice of tender invitations in the News papers

5 Liwale DC Monthly procurement reports not prepared


6 Ruangwa DC Monthly procurement reports not prepared 7

Kilombero DC

Register for all contracts awarded during the year and monthly procurement reports were not prepared contrary to Reg.23 of LGATB 2007

8 Ulanga DC Monthly and annual procurement reports not prepared

9 Manyoni Head of PMU reports to the Treasurer instead of the Accounting Officer and the unit does not prepare monthly procurement reports.

10 Mafia Monthly and annual procurement reports not prepared.

11 Same DC The PMU lacks Supporting and Administrative staff contrary to section 34(2) of PPA

The major cause of non-compliance with PPA, 2004 and related Regulations is lack of established or effective PMUs within the LGAs as procuring entities. In some cases, the existing PMUs are not staffed to an appropriate level and some staff and members lack appropriate procurement qualifications and training.

5.3 Appraisal of Contract management and procurement of goods, works and services in LGAs

This section explores the general aspects of compliance with the Public Procurement Act No.21 of 2004 and its related Regulations of 2005 and the Local Authority Financial Memorandum of (1997). It also, deals with contract management and compliance with procurement legislation matters that were found to be material to be highlighted in this report and that were reported in the management letters to the respective Councils during the financial year ended 30th June, 2009. Our review of the general aspects of compliance with the PPA No 21 of 2004 noted the following shortfalls;

5.3.1 Stores not recorded in ledgers Shs 111,504,667 Stores are only to be treated as allocated if they are chargeable to one item of account only. However, according to the Local Authority Financial Memorandum


(1997) Order 207 requires the record of receipts, issues and physical balances of each item of stores to be recorded in a separate page of the store ledger showing details of purchase like; date of purchase, the goods delivery note, number and the rate per item. Further, it requires the record on date of issue, the quantity of issue, the store issue number, and the physical balance. The audit tests on the management of stores observed that 26 Councils did not adhere to the above Order as shown in Annexure 19.

5.3.2 Goods paid for but partly/not delivered Shs.1,835,459,394 Goods worth Shs.1,835,459,394 were ordered and paid for but were found either partly delivered or undelivered in the Councils listed in the table below. The noted practice contradicts the requirement of PPR No. 122 (1), which requires a procuring entity to obtain reports on the receipt of goods that have been delivered against contracts in order to authorize promptly payment to the supplier as shown in Annexure 20.

5.3.3 Procurements made without evidence of competitive

bidding Shs.168,526,587 Review of procurement records for the year ended 30th June 2009 noted a sum of Shs.168,526,587 paid by 16 Councils for procurement of works, goods and consultancy services without following competitive bidding process contrary to Regulation 63 of the PPR, 2005. This is an increase of Shs.62,384,241 (or 57%) compared to Shs.106,142,346 reported in my previous year’s report where only six (6) Councils effected payments of this nature. Non-adherence to standard procurement procedures may cast doubt on whether the value for money was achieved. Council management should ensure that at least three quotations are sought from the suppliers of goods and services before the procurement is effected to comply with


the standard procurement procedures. In case of single sourcing, justification has to be provided and approved. The table below shows the amount paid for each Council.

SN Council Amount (Shs.)

1 Meru DC 4,424,400 2 Kondoa DC 12,307,500 3 Mpwapwa DC 31,111,000 4 Kilwa DC 12,200,035 5 Nachingwea DC 10,577,200 6 Lindi DC 3,353,000 7 Musoma MC 78,752,000 8 Tunduru DC 9,595,400 9 Namtumbo DC 30,200,000 10 Korogwe TC 34,025,700 11 Rombo DC 90,378,787 12 Mwanga DC 7,317,900 13 Kiteto DC 33,854,000 14 Simanjiro DC 14,399,600 15 Kyela DC 8,640,000 16 Urambo DC 13,936,300

Total 168,526,587 5.3.4 Inadequate documentation of contracts and project

records Shs.1,930,772,578

Adequate documentation of contracts and project records is crucial for easy reference and effective execution and monitoring of the contracts and projects. A systematic documentation would also facilitate easy access to information by the Councils themselves and other interested parties including Development Partners and Auditors. However, review of contracts management during the year under review revealed a number of inadequately


documented contracts where, vital information/documents were noted missing in the respective contract files including contract agreements, Bills of Quantities (BOQ), Engineers’ estimates, interim certificates and procurement made outside the Procurement Plan. The level of compliance to procurement legislation is still inadequate although there is an improvement in monetary terms where, during the year under review, a sum of Shs.1,930,772,578 as detailed in Annexure 21 was noted to have been incurred in expenditures of this nature compared to Shs 2,993,919,225 reported in my previous year’s audit report. The Council management is once again called upon to strengthen the procurement processes in order to obtain value for money in funds used on this area. Pursuant to order 281 of LAFM of 1997, the LGAs through the respective Councils should appoint contract officers to be specifically responsible for the management of each contract and the mornitoring of contracts performance.


CHAPTER SIX

6.0 RESULTS OF SPECIAL AUDITS

6.1 Introduction

During the financial year 2008/09 eight (8) Special Audits in the Local Government Authorities (LGAs) were conducted. These Special Audits were carried out as per the requirements of Sect.36 of the Public Finance Act No.6 of 2001 (revised 2004) as amended by the Public Audit Act No.11 of 2008 which Sect.36 (1) empowers the Controller and Auditor General to carry out Special Audits. The Act clearly stipulates that where at any time it appears to the Controller and Auditor General desirable that any matter relating to public monies or public property should be drawn to the attention of the National Assembly without undue delay, he shall prepare Special Report relating to such matter and submit the report to the Parliament through the President.

Last financial year 2007/08, seven (7) Special Audit Reports were issued and a summary of audit follow up on implementation of recommendations have been covered in chapter 4 of this report.

6.2 A summary of matters arising from the Special Audits conducted in financial year 2008/09 Eight (8) Special Audits completed in financial year 2008/09 were conducted as per Reg 79 of the Public Audit Regulations, 2009. In this Regulation, the decision to conduct Special Audits has been entrusted to the CAG but the request to conduct Special Audit can originate from any demand either public outcry or institutional. For example, of the eight Special Audits completed, six (6) were requested by Local Authority Accounts Committee (LAAC). The eight Special Audits were carried out in eight Councils namely Dar es Salaam City, Morogoro, Sumbawanga, Songea, Bunda, Tarime, Monduli and Bagamoyo, for which


matters arising from these Special Audits are summarized below:

6.2.1 Dar es Salaam City Council A Special Audit conducted at Dar es Salaam City Council

was carried out at Ubungo Bus Terminal (UBT) owned by City Council Management. The Audit particularly covered revenue collections generated from the UBT. The brief outcomes are as follows:

• The Dar es Salaam City Council entered into a contract

with an Agent M/s Smart Holding Company Limited of DSM to collect revenues on behalf of Dar es Salaam City Council. According to Contract Agreement, the Agent was contracted to pay to the Council Shs.1,500,000 per day as revenue accruing from motor vehicles using the terminal, i.e security provided to Passenger Buses kept over night, parking and entrance fees.

• We carried out the study on the same sources of revenue and the outcome of the study indicated that the average revenue for the described sources was Shs.4,618,629 per day compared to Shs.1,500,000 the Council was getting from the Agent which is far apart.

• We noted existence of unauthorized leasing of the business premises without owner’s consent. For example, the lessee paid Shs.130,000 per month as rent to the lessor (the owner) while the lessee received Shs.600,000 per month from unauthorized subleases.

• Total revenue collection for the period from June, 2006 to April, 2008 amounting to Shs.146,692,226 collected by revenue collectors but the same were not banked.

• The Dar es Salaam City Council entered into contract with 100 small vendors to carry out business at Ubungo Bus Terminal without identifying precisely the premises or areas to carry out such businesses.

• The Dar es Salaam City Council entered into lease contract for fourteen (14) years with M/s Riki Hill Hotel and the contract is scheduled to expire on 20 July 2023.


However, our review of the Contract Agreement noted the following weaknesses:-

• The contract was signed two (2) years after starting the business

• The contract was signed by the DSM City Council Director instead of the Lord Mayor as per Order 280 of LAFM, 1997.

• Furthermore, the Council management was unable to produce documentary evidence to show how the lessee was obtained, the lessee was occupying and doing business in a big area contrary to what was indicated in the Contract Agreement.

• The City Council Management signed a lease contract with M/s Abood Bus Service (the Lessee) to occupy an area of 2070 square meters under Build Operate and Transfer (B.O.T.) arrangement and agreed to pay rent of Shs.500,000 per month. However, we noted the following weaknesses: - No evidence was availed to audit to confirm

legitimacy of Shs.44,220,600 alleged to be the cost of construction

- No document was produced to show how the Lessee was obtained

- the contract did not specify the space to be developed

- Neither criteria nor base was availed to audit to justify payment of Shs.500,000 per month as commesurate rental charges for occupying an area of 2070 Square metres.

• The management of Ubungo Bus Terminal deliberately

changed the rate from Shs.6,000 to Shs.5000 for square feet of 784.08 per annum in favour of M/S Clear Channel, the rate which was supposed to be charged to Bill Boards advertisement owners, contrary to DCC (Fees and Charges) by law 1997, hence causing an occational loss of Shs.3,920,420 to the Council for five consecuctive years from July 2004 to June 2009.


• City Council Management due to its incorrect measurements applied resulted in under charging revenue collections figure by Shs. 74,529,840 for the period of two years commencing July, 2007 to June, 2009.

• We noted an instance in which the Dar es Salaam City

Council entered into Contract Agreement with M/S Globe Accountancy Services (Agent) for collecting revenue on behalf of the Council for the period of three years from (5th October 2001 to 4th October, 2004) without evidence of competitive bidding process as no quotations were sought from different Agents prior to procurement of the service. Non adherence to standard procurement procedures may cast doubt whether value for money was achieved. It is also, contrary to Order Nos.261 to 264 of LAFM, 1997.

• The basis and criterion for awarding contracts to M/s

Scandinavia Express Service Limited, Riki Hill Hotel, Kiwembo Motors and Smart Holding Company as revenue collection Agents was not availed or disclosed to audit for information and ease of audit verification.

• The Contract between DSM City Council and Smart

Holding Company Limited of DSM. However, according to clause 2.2, the Agent was allowed to collect rent from retail shops/business premises and public toilets, also, the agent was allowed to retain 20% of all rent collections as its operational and administrative costs and 80% was to be remitted to DSM City Council. The criteria applied to arrive at 20% and 80% were not disclosed to audit. Further, the Agent in the process of collecting revenue used receipt books, which were not controlled by DSM City Council and therefore it was not easy for the City Council to know how much was being collected in order to determine the value of its 80% share of the total collections.


• We noted that Scandinavia Express Services Limited (SESL) had no formal contract with DSM City Council for an area occupied by the company. Also, SESL had not payed rent of Shs.236,486,400 due to the Council from Sept 2005 to May 2009.

6.2.2. Morogoro District Council

The audit conducted on the accounts of Morogoro District Council covered a construction irrigation weir project, Construction of a teacher’s house at Visaraka Primary School and construction of Kinonko Dispensary. Audit outcome was as follows:

(i) Construction of irrigation weir project

The Council management failed to produce documentary evidence to confirm the tender, which was advertised. Also, the audit noted that the contractor had been overpaid by Shs.1,648,744.

The Contractor for construction of Weir did not pay liquidated damages of Shs.3,045,600 after delaying to complete the work for one year.

Additional cost Shs.2,500,000 was not authorized by the approving authority instead the payment was made basing on instruction from the Consultant.

The Zonal Irrigation Engineer reduced the scope of work worth Shs.4,200,000. However, this alteration made by the engineer did not reduce the equivalent proportionate of the contract price.

We noted an abnormal delay in completion of project for construction of Weir. The expected completion date as per Contract Agreement was 19 March 2006. However, up to May 2009 the project was still out standing.

The Council management presented incorrect implementation Report to LAAC on January 23rd,

2009 which showed that the project had been completed while the same was found not completed as of May 2009.


(ii) Construction of Teacher’s House at Visaraka Primary school

Building materials worth Shs.373,400 issued from Council main stores had not been received at the site

We noted a Loss of 30 bags of cement worth Shs.306,000 which became defective and no longer suitable for construction works.

We noted that the project had been implemented below standard because of non involvement of District Engineer’s office when executing Council projects.

The audit confirmed that the Teacher’s house constructed in 2008 was wrongly shown by the Council to the Members of LAAC as the one which was constructed in 2006/2007.

We noted that the house in question had been constructed without BOQ and drawings.

Building materials worth Shs.815,000 which were paid for, had apparently not been delivered as there was no delivery notes and receipts vouchers.

The Council procured building materials such as cement and timbers worth Shs.1,320,000 and issued to the project while the Community was not in a position to contribute local materials to facilitate the implementation, as a result the building materials remained unutilized for a long time and became defective and no longer suitable for construction.

Minutes of meeting held on 16/08/2007 to authorise the loan of 58 bags of cement to private individuals were not availed for audit scrutiny.

(iii) Construction of Kinonko Dispensary:

Stores worth Shs.1,545,725 procured by the Council had not been delivered to the project.

8 bulk emulsion paint and 2 chipping machines purchased had not been taken on ledger charge.

30 pcs of water gutters were issued from stores using cancelled issue voucher

We noted that the project had been implemented below standard because of non involvement of the District


Engineer’s office when the implementation of the project started.

The Council management presented incorrect implementation Report to LAAC by showing that the project spent Shs.16,800,000 while we found and verified Shs. 8,975,750 only.

6.2.3 Sumbawanga District Council

The special audit on accounts of Sumbawanga District Council covered specific areas only as per approved Terms of Reference. The main findings in the report include:

Slackness in implementation of development projects. Shs.752,073,399 remained un-spent for development projects.

Shs.10,941,500 from development fund was diverted to projects not planned

During audit we established that the report, which was presented to LAAC on January, 2009 by the Council Management was misleading. The report showed that projects funded under CDG worth Shs.265,340,430 and 5 water projects worth Shs.46,849,566 had been completed while the same were still in progress

Fuel worth Shs.157,945,514 was not recorded in Councils’ motor vehicle logbooks

Shs.4,834,700 paid as fees for Council employees not supported by proper documentation

6.2.4 Songea District Council The main findings for this Special Audit include the

following: We noted differences between actual incomes received

and those disclosed in reports tabled before LAAC. Actual income received not shown in reports tabled

before LAAC Shs. 79,275,565 Shs.328,677,833 was Income related to 2006/07

financial year but the Council disclosed as 2007/08 income.

Shs. 1,035,000 was used to purchase three science kits but the same were not accounted for


Shs.3,520,000 was unbudgeted payment in respect of construction of Mpitimbi SACCOS office

No enough evidence was produced to audit to justify expenditure of Shs.10,000,000 for production of forms for follow up of statistics for children under 5 years & Village Registers.

Shs.13,265,100 was paid over and above the approved Budget and Action plan

The Council received shs. 29,523,980 for Review of Village Plans emanated from O & OD (Opportunities and Obstacles to Development) Planning Approach. The audit noted that the Council paid Shs. 18,657,500 only. The remaining shs. 10,866,480 was spent for administrative activities within the planning department.

The Council transferred Shs. 42,000,000 from water projects to finance construction of classrooms.

We noted ineffective supervision over motor vehicles and heavy plants. The Council had appointed Agricultural Officer to work as Transport Officer.

The Council purchased fuel worth shs. 8,729,940 but the same was not properly accounted for.

The Council did not transfer to villages shs. 35,136,578 related to subsidies paid in lieu of abolished local taxes.

We noted that the Council overstated the price for iron sheets and ridge caps in the report presented to LAAC.

Our audit verification in development projects noted that some projects related to past periods had not been completed; some projects had been implemented below standards, inadequate community contributions were noted in some projects leading to late completion. There was also reallocation of funds to unplanned projects. All visited projects had been built by burnt bricks with soil except TASAF projects and most of the projects especially those implemented at village levels were implemented without following Government standards and guidelines.


6.2.5 Bunda District Council The Special Audit mainly concentrated on accountability of resources collected and allocated for construction of road drainage systems. The road concerned was that streching from Bus Stand to Post Office. The main findings from this Special Audit include the following:

Various documents were not produced for audit, hence limiting the scope of our audit. The un produced documents include minutes of the Tender Board meetings, tender documents, technical drawings, engineer’s estimates and certificates of completion.

The Council report indicated that Shs.55,000,000 was received for the project in 2006/07, however documentary evidence to support this receipt was not availed for audit verification.

Handing over certificate was not used by the contractor in handing over the completed work.

The audit noted disproportionate between the amount paid and the completion level. For example, the contractor was paid 60% of the contract price, while the work completed was only 47%.

The contract did not indicate the length of the drainage system to be constructed by the contractor.

No evidence was made available to audit to confirm that the work was advertised.

The work was delayed by 50 days, but no liquidated damages were charged to the contractor.

The Council presented to LAAC a misleading report. The Council report indicated that the Council spent Shs.36,000,000 in 2006/2007 while we noted the actual amount spent was Shs.17,236,060. Further, we noted that the length (distance) of the drainage was 956 meters and not 1500 meters as indicated in the report presented to LAAC.


6.2.6 Tarime District Council The main focus of this Special Audit was on accountability of funds allocated and used in renovation/construction of the District Hospital. The main findings include:

Various accounting documents were not produced for audit. This included technical drawings for renovated areas, engineer’s estimates, certificates of completion/handing over certificates for the project concern, documentations to confirm extension of completion time, payment vouchers for 2006/07 for global fund account, MTEF budget for 2006/07, report for project implementation for 2006/07 and a register for contracts.

The Council received Shs.300,000,000 as grant from the Central Government for District Hospital renovation and water project at Magoto. The audit could not confirm if the same was in the approved budget.

During procurement process, the Council did not use the standardized forms as recommended by PPRA and in conformity with Reg.83(3) of PPR issued under G.N. No.97 of 2005

Progress reports on execution of Contracts were not prepared

The audit noted that the contract for electrical re-installation had an additional work of approximately 37% and reasons for additional work and extension of completion time were not provided.

Justification for paying Bugingo Electical works additional amount of Shs.6,793,200 was not made available to audit.

The Council presented a misleading report to the LAAC in its session held in Jan 2009. The audit noted that payments made for electrical re-installation in 2006/07 was Shs.6,518,900 and not Shs.18,301,400 as presented to LAAC.

Misleading information presented by the Council to the LAAC in Jan 2009 is that the Council paid Shs.40,085,200 for the renovation for Nurses’ Office, Ward 1 and 2,


including maintenances of water systems. However, we noted expenditure of Shs.54,278,700. Hence, the Council understated Shs.14,193,500 in the report presented to LAAC.

6.2.7 Monduli District Council

The areas covered by the Special Audit at Monduli District Council included the following:-

• Miscellaneous Deposit Account of the Council • Construction projects for Engutoto • Construction projects for Nanja Secondary School and • Construction at Migombani Primary School from 2006/7

accounts. The following is a summary of the main findings of the report: • A total amount of Shs.184,947,815 was transferred from

the Deposit Account to General Fund account to meet expenditures for which its purposes could not be established.

• Shs.7,096,753 was transferred from Education item to Compensation for abolished taxes item within Misc.Deposit Account without proper authority.


• Out of Shs.20,000,000 only Shs.5,000,000 were remitted to Nanja Secondary School

• Allowances amounting to Shs.8,488,000 was said to hadve been paid to various payees during the outbreak of Rift Valley Fever and Rabies Vaccination. However, the said payees denied to be paid such allowances.

• Fuel worth Shs.2,337,000 could not be evidenced to be utilized for intended purposes.

• On construction of Girls’ Dormitory at Engutoto Secondary School, the audit noted deficiencies which includes tender was not evidenced to have been advertised, there was no evaluation committee, Incorrect figures were used to select the tender, the


building under construction was not inspected before making payments. Also, there were no works evaluation sheets and Handing Over Certificates. It was further, noted that Works valued Shs.2,093,400 were not done, One contractor for Wing No.2 was not registered with the Contractors Registration Board (CRB), There was delay in completing construction works and no liquidated damages were charged. There was a poor workmanship, the building is dominated by cracks on the wall and floor. The constructed toilets worth Shs.2,625,700 collapsed eight months after construction; and despite the contractor being awarded a tender for construction only (labour) he was given money to purchase construction materials which were supposed to be bought by the School Committee.

• We noted poor workmanship in the construction of Dining Hall at Nanja Secondary School, which resulted in loss of approximately Shs.7,817,351 by re-doing the construction.

• A house at Migombani Primary School was initially said to have been constructed using Council funds together with Community contribution, this is as per report submitted to the Local Authority Accounts Committee (LAAC). However, it was later discovered that the building was constructed by TANAPA in a joint efforts with the Community. Shs.7,200,000 was still in the school account. The school account was closed by the bank after being dormant for a long time.

• A total amount of Shs.184,947,815 was transferred from the Deposit Account to General Fund account to meet expenditure for which its purposes could not be established.

6.2.8 Bagamoyo District Council

The Special Audit on accounts of Bagamoyo District Council covered specific areas and the outcome was as follows:

Various accounting documents were not produced for audit. This included payment vouchers for Deposit Account for 2007/08


DADPs progress reports which were submitted to Government Authorities were found to be paper work or desk top reports which had no correlation of what was actually implemented.

Progress report prepared by the Council on roads constructions excluded Shs.35,646,238 received.

Unspent Development Funds were transferred from the respective accounts to Deposit Account.

Variations of works worth Shs.261,509,753 was not authorized by Tender Board (the value of work approved by Tender Board was Shs.791,718,500).

Payment of Shs.158,347,155 was not supported by payment vouchers.

No evidence was made available to confirm refund of Shs.30,000,000 to Msoga Irrigation project which was transferred to DADPs account in Feb.2008

Expenditure of Shs.142,661,250 incurred in excess of the approved budget

Up to October 2009, Projects worth shs. 133,408,338 had not been implemented though funds allocated for these projects were received during 2008/09.

The Council paid Shs.23,500,000 for goods which had not been delivered.

Retirement particulars of Shs.48,561,000 for cassava projects were not availed for audit verification.

The audit noted delays in releasing Shs.135,184,379 development funds from miscellaneous deposit account.

Motor cycle worth Shs.30,000,000 paid for Agricultural Extension Officers had not been delivered

The Council had not deducted liquidated damages for delay in completion of water project at Kwaruhombo and Masuguru.

We noted considerable delays in completing various development projects. A sample of projects involved are:- - Construction of water system and cattle trough at

Mkenge - Construction of two classrooms at Sanzale Secondary

School


- Construction of four classrooms at Ubena Secondary School

- Construction of water dam at Miono - Rehabilitation of water dam at Lesokonoi

Chamakweze - Road maintenance (Kikaro – Kwaikonje 17km, Miono

– Lipingwi 10Km and Miono – Mhuga12Km). - Construction of Ubena latrine - Construction of 4 Teachers’ houses at Msoga Primary

School - Construction of cashew-nut processing centre at

Zinga - Construction of cassava processing centre at Yombo - Construction of administration block at Zinga

Secondary School - Construction of four classrooms at Kiromo Secondary

School, - Construction of two classrooms and procurement of

desks at Bwilingu Secondary School.

Conclusion on Special Audits The results of the eight (8) Special Audits completed during the financial year 2008/09 as briefly presented above, we can conclude that:-

• LGAs are preparing quarterly progress reports and later consolidated to annual projects implementation reports which in many cases are misleading and they are not representing the actual position of the projects being implemented by the Council.

• In extreme cases, we noted that these reports are just reports prepared in the office without regard of the actual situation in the field and the same reports are required to be submitted to higher level authorities for decision making regardless of the status of the project reports.

• Councils are not aggressive enough and seen to exert much efforts in raising revenue accruing from own internal sources. It is evident that huge amounts of revenue remain uncollected due to the fact that the


Councils are entering into Contract Agreements with revenue collection Agents without doing a thorough feasibility study, Signing contracts without being reviewed by competent lawyers, having weak internal control systems over revenue collections and entering into contracts without adhering to the requirements of the Public Procurement Act, 2004 and having internal revenue collectors who are not committed and trustworth.

Our audit further, showed that Projects implemented at Lower Level Government are below the prescribed standards because of the following:-

• Lack of supervision from the Councils’ management. The Council managements once they transfer funds to the lower levels of administration for implementation of various projects, they incorrectly expense such funds and wash their hands of such funds.

• Considerable delays in completing projects, for not involving Council Engineers in the implementation process.

• Liquidated damages are not being deducted by the Council management for contracts not completed on time.

• Construction contracts are signed without having BOQs.

• Projects are implemented without being planned, hence excuted without knowing the direction.

• Councils transfer funds from one account to another contrary to existing legislation and without having justifiable reasons and

• Transfer of funds to implement the intended projects takes long time without justifications.

• Transfer of unspent funds of projects at year end to Deposit Account coupled with the project table implementation reports as a way of hiding the truth on the implementation of Council projects.


As at the time of writing this report, two other Special Audits were ongoing one in Kilosa District Council and the other in Rombo District Council whose outcome will be reported in the coming year’s audit report together with other reports which will be done in the year as one of the measures to enhance public accountability in Local Government Authorities. The office will continue to receive requests for Special Audits from all angles but taking into consideration the existing legislation that the CAG is not obliged and shall not be bound to accept all requests but will consider each request based on its merit.


CHAPTER SEVEN

7.0 PERFORMANCE REVIEW OF DONOR FUNDED PROJECTS IN LGAs

7.1 Introduction

The audit of Local Government Authorities among other areas covers the audit of Donor Funded Projects. This chapter summarises the audit results of silient issues which featured during the course of audit as summarized below, which require the attention of responsible authorities such as the Government, Parliament, Donor community for decision making and the general public at large. The detailed information is well covered in individual reports issued to each Council. The summary of audit reports being referred to above covers Water Sector Development Program (WSDP), Tanzania Social Action Fund (TASAF) and Road Funds for which the audit the respective audits have been completed and salient issues featuring are summarised as follows:-

7.2. Audit Results of the Tanzania Social Action Fund (TASAF)

7.2.1 Project Financing The TASAF II project life is four (4) years which started from the year 2005/2006 and is financed by the World Bank through the International Development Associations (IDA) and the Government of the United Republic of Tanzania (GOT). The total TASAF II IDA funding is USD150 million comprising of USD129 million Credit and USD 21 million grants. A sum of Shs.61,958,985,459 (equivalent to USD 51,187,273) was received from various sources during the year under review as shown below:


Receipts from Amount (Shs)

Equivalent USD

IDA 36,356,216,059 27,899,854.46 Government Contribution 2,325,000,000 1,926,263.46 Others 23,277,769,399 21,362,155.15 Total receipts for the year 61,958,985,458 51,187,273.07

Our audit review of the financial statements of TASAF which involved scrutiny of accounting records, site visits and evaluation of internal control systems, revealed some issues as summarized below:

7.2.2 Opinion issued During the year under review the TASAF consolidated accounts have been issued with unqualified opinion after being satisfied that the financial statements fairly reflects, in all material respects the financial position of the Tanzania Social Action Fund as at 30th June, 2009.

7.2.3 Sub projects which need additional funds Shs.98,363,073 Site visit conducted by the audit team accompanied by TASAF management in some selected TASAF sub projects noted that some projects had not been completed due to insufficient funding as shown below.

Council Description of Sub-project

Outstanding Works

Estimated additional funds needed (Shs.)

Rombo D.C.

Mamsera Secondary School

Construction of classrooms

6,151,500

Reha Primary School


4,738,000

Lesoroma Primary School


7,043,200

Mhabu Primary School


9,377,400


Ibukoni Construction of Dispensary

Construction of Dispensary

8,146,500

Ibukoni Construction of Residential House

Residential House

5,999,300

Ibukoni Construction of Toilets

Construction of Toilets

21,764,750

Mengeni Secondary School


3,775,500

Reha Secondary School


4,879,000

Kisarawe DC

distribution of water at Mlonganzila village

installation of water pipes to Mlonganzila Primary School

26,487,923

Total 98,363,073

7.2.4 Lack of full time Village Fund Coordinator (VFC) and Village Fund Justification Assistant (VFJA)

According to the memorandum of understanding between TASAF and Local Government Authorities (LGAs), the Councils are required to appoint officers who will perform the duties of Village Fund Coordinator (VFC) and Village Fund Justification Assistant (VFJA). It was, however, observed that the officers appointed by the District Executive Directors of the following Councils to perform duties of VFC and VFJA were not fully committed to perform TASAF duties, they were also required to perform other duties contrary to the provision of the Memorandum of Understanding between TASAF and the Councils as summarized below:-


Council Comments Mbeya D. C.

The Village Fund Justification Assistant was not committed to TASAF activities, as he was also performing other LGA accounting duties.

Mpanda D. C. The Village Fund Justification Assistant was not committed to TASAF activities on full time basis.

Chunya D. C. The Village Fund Justification Assistant, who was appointed to perform TASAF duties, was also, required to perform other LGA’S accounting duties.

Biharamuro D.C.

The Council has not appointed a VFC after the one who was performing as VFC being transferred to Chato District Council. The VFJA was still holding both two posts

Korogwe D.C.

The VFJA was not given letters of appointment to enable him to be engaged fully in TASAF activities. VFJA is also performing other duties in the District

Handeni DC

The Village Fund Justification Assistant was not given letter of appointment to enable him to be engaged fully in TASAF activities, VFJA is also performing other duties.

Pangani D. C.

The VFJA has gone to Arusha for studies at the Institute of Accountancy. DED has so for not appointed another officer to perform the duties of VFJA.

Kilindi D.C.

The Village Fund Justification Assistant was not engaged on TASAF activities only, was also engaged in other duties.

7.2.5 Stores not taken on ledger charge Shs.5,426,900

We noted that stores worth Shs.5,426,900 purchased and paid for during the year under review for implementation of the respective sub-projects, were not accounted for in the stores ledger as shown in the table below contrary to Regulation No. 220 (I) of PFR of 2001 (revised 2004).


Council Amount (Shs) Geita 3,300,000 Sengerema 900,000 Bukombe 1,226,900 Total 5,426,900

7.2.6 Inadequately supported payments Shs.152,451,466

Payments paid in respect of sub-projects totaling Shs.152,451,466 which were not supported with relevant supporting documents as shown in the table below:

Council Missing supporting documents

Amount (Shs.)

Ngara DC Relevant schedules and receipts

7,471,000

Dodoma MC Acknowledgement receipts from CMC and VC

137,215,407

Simanjiro D.C. Paid Payment vouchers with the following Cheque No.

025951 3,163,909 025888 1,346,150 104205 280,000 104206 290,000

Kyela D.C. Pv. 3/7&Chq. 29649 DED-Kyela

2,130,000

Pv.4/7&Chq. 29651 Levi Kasitu

225,000

Pv.5/7& Chq. 29652 Mohamed Nassor

330,000

Grand Total 152,451,466


7.2.7 Ineffective Internal Audit function

Our assessment of Internal Audit functions in the sample selected we noted existence of deficiencies in 17 Councils as summarized below:

S/N Council Comments 1. Bukoba D.C. Internal Auditor’s reports were not

made available to the auditors 2. Bukoba M.C. Internal Auditor’s reports were not

made available to the auditors 3. Chunya D.C. Internal and Systems auditors had

not prepared any audit report for the period under review

4. Kyela D.C. Internal and Systems auditors had not prepared any audit report for the period under review

5. Tarime D.C. Internal Auditor’s reports were not made available to the auditors

6. Geita D.C. The Internal Systems and Audit reports are not responded by management

7. Misungwi D.C. The Internal System Audit reports are not being responded by management

8. Mwanza C.C. The Internal System Audit reports are not being responded by management

9. Sengerema D.C. The Internal System Audit reports are not being responded by management

10. Mbinga D.C. Some quarterly progress reports not prepared

11. Nzega D.C. Internal Auditor’s reports were not made available to the auditors

12. Bariadi D.C. The Internal System Audit reports are not being responded by management

13. Bukombe D.C. Internal Auditor’s reports were not made available and Systems Audit reports not responded by the management


14. Kahama D.C. Internal Auditor’s reports were not made available

15. Kishapu D.C. Internal Auditor’s reports were not made available

16. Maswa D.C. There were no management responses on recommendations issued by Internal and System Auditors in respect of Sub-projects at Malekano, Zawa, Isanga, Bugarama and Dulung’wa respectively.

17. Singida M.C. Progress reports for the period Jan-June 2009 were not submitted

Furthermore, we were unable to assess the extent of Internal Audit work coverage due to the fact that there were no interim Internal Audit reports produced. Hence, we did not place any reliance in any of the specific work of Internal Audit for which we can evaluate and perform the audit procedure on that work to confirm its adequacy.

7.2.8 Unsatisfactory records keeping at VFC and CMC offices

Our audit inspection conducted in Bukoba, Kisarawe, Rombo and Misungwi District Councils revealed the following:

• Sub-project files at the Village Fund Coordinators office are not completed,

• Some important information communicated between Village Fund Coordinator and Community Management Committee (CMC) was not in the files.

• At the Community level, the Community Management Committee (CMC) Sub-project files did not contain all records and communications between the Committee and the Village Fund Coordinator’s office.

7.2.9 Delay in completion of Sub-projects Shs.405,263,624

According to TASAF Operational Manual, Sub-projects are required to be implemented within a period of 12 months after approval. However, during audit physical verification


on implementation of the approved projects; we noted that some of the approved projects have been delayed for more than twelve months contrary to the TASAF operational manual as reflected below:

Council Description of Sub-project/

planned cost (Shs.)

Amount released

(Shs.)

Status of implementation

Bunda D.C.

(i)Waziku, Kazugu and Nambaza secondary schools, (ii)Kibera market

110, 301,575 110, 301,575 Construction work still in progress.

Kyela D.C.

Piggery keeping 7,781,640 7,781,640 Not implemented only bank account has been opened.

Poultry keeping 11,793,652 11,793,652 Eleven (11) poultry huts completed, construction of 6 other huts is in progress despite 24 months being elapsed.

Rehabilitation of Ndwanga-Mpunguti road (4.0 km)

13,172,899 13,172,899 Installation of 5 Ring culverts, 2 box culverts are still in progress although 24 months has been elapsed.

Construction of 2 classrooms and office at Kikuba Primary School

23,524,100 23,524,100 Fitting of Ceiling board was still in progress although 22 months had elapsed.

Construction of laboratory at Bujonde Secondary school

30,709,600 30,709,600 Up to August 2009 during site visit the following activities were not done:


-Plastering -Painting -Doors and windows not fitted -Flooring not done. 20 months had elapsed but construction was still in progress.

Construction of 2 classrooms at Makwale Primary School

16,656,120 16,656,120 Up to August 2009 during site visit the following activities were not done: -Ceiling board not fitted, Doors not fitted and painting not done. 20 months had been elapsed but construction was still in progress.

Construction of 2 Teachers house at Ikombe Primary School

29,524,500 29,524,500 One house was at finishing stage. 18 months had elapsed but construction was still in progress.

Construction of 2 Teachers house at Mbula Primary School

21,111,300 21,111,300 One house was completed and the other was at linter stage. 18 months had elapsed but construction was still in progress.

Construction of 2 Teachers house at Nnyange Primary School

32,727,273 32,727,273 The house had not been painted or fitted with window shutters. 18 months had elapsed but construction was still in progress.


Chunya DC

Construction of four (4) classrooms and one teacher’s office at Kiwanja Village

32,155,440 32,155,440 Up to the time of audit, August 2009, the Sub-project was still in the foundation stage despite the fact that funds from TASAF-MU were disbursed on October, 2008.

Kigoma D.C

Construction of administration block at Nyamori Village. Implementation of the Sub-project commenced on 22nd May, 2008 and expected date of completion was 23rd May, 2009.

13,636,375 13,636,375 The Sub-project was not implemented.

Kigoma D.C

Construction of four (4) classrooms and latrines at Kaseke village

13,636,400 13,636,400 The following activities were found not done: - Flooring - Veranda

construction - Plastering - Fitting of

window shutters with glass

- Ceiling board fixing.

- Construction of pit latrines.

Kigoma D.C

Construction of 4 class rooms and Latrines at Kiganza village

34,891,300 34,891,300 The following works were found still in progress: • Flooring • Painting


• Corridors construction

• Plastering of the walls

• Fixing of ceiling board

• Fixing of doors and windows

• Construction of pit latrine.

Overall, there was inadequacy in respect of: i) Community participation ii) Supervision iii) Technical support from sector experts

Kigoma D.C.

Construction of administration block at Kibingo Village

13,636,450 13,636,450

The following works were not done: • Flooring • Painting • Corridors

construction • Plastering of

the walls • Fixing of

ceiling board • Fixing of

doors and windows

• Construction of pit latrine.

Overall, there was inadequacy in respect of: i)Community participation ii) Supervision iii) Technical support from sector experts

Total 405,263,624 405,263,624


7.2.10 Ineligible expenditure Shs.20,243,650 (i) We noted ineligible expenditure of Shs.20,243,650 for

activities which should not have been paid for using TASAF funds as follows:

Council Payee Description of payment Amount

(Shs.) Kiteto DED Council operation costs 2,592,000 Simanjiro DED Council operation costs 14,220,650 Mwanza City

CED – VFC members

Allowances for attending LAAC

341,000

Sengerema DED - VFC members

Allowances for attending LAAC

1,440,000

Maswa DED Purchase of 1100 Lts of fuel for Council operations

1,650,000

Total 20,243,650

7.2.11 Non involvement of sector experts

During audit we observed that there has been inadequate involvement of sector experts in some of the TASAF activities, and when involved, there were no written reports for the technical advices given. This had led to performance of substandard works. The following are some examples of works which were performed below the required standards:

Council Sub-project Remarks

Bukoba M.C. Rehabilitation of Omukigusha Road

Rain water has washed away a great portion of the road due to non provision of water channels, and it was further noted that heavy tracks were passing on the road. As a result, the bridge (made of timber) has shown little tolerance as most of the nails used were not that strong to support the


weight of the heavy trucks passing across the bridge. Furthermore, some of the stones used to reinforce the bridge had been removed.

Bunkongo Orphans - Indigenous poultry

Twelve (12) chicks out of 34 purchased in the first lot died. The remaining 22 chicks were found to be improperly managed. Furthermore, CMC had not utilised half of the money granted for; the money was still held in the bank account for about seven months without regard to the fact that the project period was for only twelve months.

Chunya D.C.

Construction of classrooms and one teacher’s office at Kiwanja village

There were no written reports for the technical advice given. It was expected to find in each Sub-project file the internal technicians report at each stage of their involvement, which was not available even to the completed Sub-projects.

Misungwi D.C. Fella Village: Dairy Cattle keeping for disabled

There were no written reports or evidence for their involvement in giving technical advice to the ongoing projects.

Mwanza C.C. Construction of Mkude – Mlimani Road

Evaluation report by the sector expert could not be made available to the auditors.


Mbinga D.C. All implemented Sub-projects

There were no written reports for the technical advice given.

Kishapu D.C. All implemented Sub-projects

There were no technical supervision reports for the Sub-projects.

It was expected to find in each Sub-project file, the internal technician’s reports for each stage of implementation. However, these reports were not made available even for the completed Sub-projects. In addition, copies of external technical evaluation reports of the completed Sub-projects could not be produced for audit review.

7.3 Water Sector Development Program (WSDP) 7.3.1 Financing of the programme

Total amount disbursed during the year under audit was Shs.228.3 billion against approved budget of Shs. 190 billion or 120%. The difference noted here was due to reporting of financing which were from off budget financing which included funds from AfDB and EIB to DAWASA projects. Total expenditure during the year under review (from July, 2008 to June, 2009) was Shs. 245 billion against actual disbursement of Shs. 228.3 billion. However, total available funds for the year was Shs. 287.5 billion inclusive of total opening balance of Shs. 59.2 billion making expenditure performance of 85% during the year. Details are as shown below:

Partner Planned (Shs) Actual (Shs) % of

performance

GOT 36,950,840,428 40,608,226,960 110% IDA 44,848,906,300 43,413,155,518 97% KfW 6,507,332,900 6,572,000,000 101%


Royal Netherlands 16,199,167,100 16,430,000,000 101% ADF (France) 500,000,000 996,197,502 199%

AFDB(RWSSP) 38,987,695,509 39,547,702,400 101%

AFDB(DWSSP) - 11,696,775,252 100%

EIB (DWSSP) 2,500,000,000 9,245,383,686 370%

EU (Regional Centres) 21,900,000,000 25,958,172,604 119%

IDA (DWSSP) 5,000,000,000 5,436,829,966 109%

JICA 2,332,179,628 2,682,412,371 115%

KfW (Hai Water Supply) 1,970,840,989 2,791,673,326 142%

KfW (Moshi Rural ) 2,507,508,432 5,173,491,845 206%

KfW (Killi Water) 2,022,773,376 1,846,023,009 91%

KfW (Regional Centres) 3,797,114,594 8,892,980,447 234%

MCC Account at MoFEA 1,300,000,000 - 0%

GTZ 3,167,820,372 6,621,185,857 209% (Others Include KOICA, IUCN, BADEA, SECO, NORAD Through VPO, WWF, etc)

167,820,372

191,864,400

114%

Water user fee - 205,135,087 -

(Collections ) - Basin - - - Total

190,660,000,0

00

228,309,210,230

120%

7.3.2 Findings noted during audit

A summary of audit findings for WSDP for financial year 2008/2009 are as shown below:

7.3.2.1 Unutilized funds as at 30th June, 2009 Shs.2,731,289,081

Our audit test check on the financial performance and utilization of WSDP funds received by 22 Councils and Water Authorities during the year under review noted that a sum of Shs.2,731,289,081 had not been spent as at 30th June, 2009.


This implies that the targeted communities have been denied the services accruing from the planned activities. The list of Councils and Water Authorities with unspent balances is as shown below:

Council Amount (Shs.) 1. Karatu DC 76,999,721 2. Longido DC 506,933 3. Ngorongoro DC 203,318,095 4. Monduli DC 85,243,071 5. Kibondo DC 228,536,626 6. Kigoma Ujiji Urban

Water & Sewage Authority 127,213,985

7. Kigoma DC 217,998,966 8. Manyoni DC 293,711,913 9 Singida MC 263,982,599 10 Singida DC 75,579,363 11 Singida Urban Water &

Sewage Authority 97,047,730

12 Karagwe DC 55,404,925 13 Ngara DC 67,573,135 14 Muleba DC 126,009,943 15 Missenyi DC 153,615,675 16 Bukoba MC 34,722,095 17 Bunda DC 51,642,201 18 Musoma DC 225,948,479 19 Musoma MC 41,229,837 20 Rorya DC 180,816,595 21 Serengeti DC 70,258,729 22 Tarime DC 53,928,465 Total 2,731,289,081

7.3.2.2 Water Tank at Unyamikumbi area not connected and

put in use Shs.33,114,716

Our audit test check of water projects under WSDP at Singida Municipal Council noted that the beneficiaries who were earmarked to benefit from the water project costing Shs.33,114,716 had been denied the services of getting reliable and safe water facilities because Water Tank at Unyamikumbi area was not connected with water supply.


7.3.2.3 Water projects under WSDP not completed Shs.473,871,014

Our audit test check of performance evaluation of WSDP projects, revealed that though funds were received early between July and February, 2009 some activities were either still in progress or not implemented as shown in the table below. This implies that there is inadequate management of WSDP activities hence delaying provision of water services to the Community.

Council Project Amount (Shs.) 1. Musoma DC District Water Engineer

Office 110,000,000

Two water boreholes at Wenyere village

41,213,000

2. Musoma MC Various 41,212,121 3. Rorya DC Various 171,657,025 4. Serengeti

DC Various 109,788,868

Total 473,871,014 7.3.2.4 Missing payment vouchers and supporting documents

Shs.136,329,645

From the sample of seven Councils selected for detailed audit testing as shown in the table below, we were not provided with the relevant supporting documents for payment totaling Shs.116,785,290 to ascertain their occurance, validity and completeness. In addition, we were anable to verify payment vouchers and their supporting documents amounting to Shs.19,544,355 as they were not availed for audit verification. We were thus uncertain as to whether such payments occurred and they are related to WSDP activities, and the objectives of the intended activities may not have been met.


S/N Council Details Amount (Shs.)

1 Kibondo DC Missing supporting documents

8,218,500

2 Kigoma Ujiji MC

Missing supporting documents

5,448,490

3 Kigoma DC Missing supporting documents

3,282,500

4 Karagwe DC Lack of genuine receipts

92,353,125

5 Bukoba MC Missing Payment vouchers

4,110,855

6 Bunda DC Missing supporting documents

7,482,675

7 Rorya DC Missing payments vouchers

15,433,500

Total 136,329,645 7.3.2.5 Payments not related to WSDP activities

During our audit review, we noted some instances where payments totalling Shs.50,664,924 in respect of 4 Councils were made to some activities which do not relate to WSDP, but the expenses were charged in WSDP account. The following table shows some of such cases. WSDP intended activities may not be completed as they were planned if funds allocated to them are re-allocated to other non programme activities. Council Details Amount

(Shs.) 1. Manyoni DC Payment of VAT

Contract No.LGA/117/2008/ 2009/WR/RWSSP/001

32,764,924

2. Longido DC Other charges 6,000,000 3. Kigoma Ujiji

MC Education Account 10,000,000

4. Bukoba MC Allowance to CTB members

1,900,000

5. Total 50,664,924


7.3.2.6 Stores not taken on ledger charge Shs.155,957,099

Regulation No. 220 (I) of PFR requires that stores purchased should be posted to the appropriate folios of the stores ledger. To the contrary, it was observed during the audit that stores worth Shs.155,957,099 purchased and paid for during the year under review for implementation of the WSDP in various Councils were not accounted for in the respective Council stores ledgers as reflected below:

Council Details Amount

(Shs.) 1. Longido DC Various 11,544,000 2. Monduli DC Various 1,222,600 3. Ujiji Urban Water $

Sewage Authourity Various 1,790,000

4. - do - Water equipment not delivered

124,751,000

5. Missenyi DC Various 6,007,999 6. Bukoba MC Various 1,581,500 7. Musoma MC Pipes 9,060,000 Total 155,957,099

7.3.2.7 Imprest not retired Shs.14,983,300

Our review of the financial statement of the selected samples of Councils noted that some had closed their WSDP financial statements with outstanding imprest amounting to Shs.14,983,300 this is contrary to financial regulations and best practices as shown in the table below:- Council Amount (Shs.) 1. Monduli DC 3,175,500 2. Rorya DC 930,000 3. Kibondo DC 3,496,000 4. Musoma MC 7,381,800 Total 14,983,300


7.3.2.8 Inadequate implementation of WSDP contracts Shs.1,045,563,513

Our audit review of the implementation of the WSDP contracts noted some of the contracted works were either partially or not completed and some instances poor workmanship was noted as follows:-

(a) Longido District Council

(i) Matale water project Shs.31,039,359 • There were leakages of water on the wall and at

the bottom of the tank. • We observed cracks emerged on the concrete of

the roof of the tank. • Two layers of high cover paint and two layers of

gross cover paint were not applied to the tank

(ii) Mundarara water project Shs.127,542,430 We observed cracks on the water tank.

(iii) Construction of District Water Engineer’s Office

(DWE) Shs.111,013,400

The contract agreement between the Council and M/s Rashasi Civil & Electrical Eng. Works Co. Ltd - Arusha for construction of Longido District Water Engineer’s Office was signed without reference at a contract sum of Shs.111,013,400. However, the following irregularities were noted:

• Items listed in the BOQ not physically evidenced

Shs.9,152,000

Site visit conducted by audit team on 17th November 2009 noted that some of items appearing in the BOQ could not be physically evidenced. These items include Medium Density Fibre (MDF) board partition, MDF Doors, 10 three lever mortice locks, 167M2 Porcelain tiles to floor, Lower kitchen cabinets with marble counter top and high level kitchen cabinets.


• Liquidated damages not imposed Shs.11,101,340 Liquidated damages amounting to Shs.11,101,340 had not been charged as per clause No. 26 of the contract with a contract sum of Shs.111,013,400 after a delay of 162 days from the expire date of the contract agreement between the Council and M/s Rashasi Civil & Electrical Eng. Works Co. Ltd – Arusha for construction of Longido District Water Engineer’s Office

(b) Ngorongoro District Council

(i) Construction of District Water Engineer’s Office Shs.97,765,576

During the year under review, the Council entered into contract with Ms Victor Annex Plumbers Building and Civil Engineers Co. Ltd for constraction of the District Water Engineer’s Office for Shs. 97,765,576. However, the Original contracts and Technical drawings were not availed for audit verification.

(ii) Contract for water pump and solar power system

installation Shs.35,000,000 During the year under review, the Council entered into contract with Ms Aquaman Drillers Limited for installation of water pump and solar power system at Lemuta Village for Shs.35,000,000. However, the Contract reference number, Letter of acceptance and conditions of contract were not availed for audit verification.

(c) Manyoni District Council Shs. 214,638,300 (i) Inadequate Project Management

Manyoni District Council entered into Contract Agreement No. LGA/117/2008/2009/WR/RWSSP/001 with M/S EFAM Ltd for supplying, installation, connecting, set to work, training pump attendants and


commissioning of diesel pumps, engines and submersible pumps at Aghondi, Ipande, Mpola, Mkwese and Sanjaranda water schemes at a contract price of Shs.214,638,300.

We noted a considerable delay in project implementation and liquidated damage was not imposed by the Council as per Contract Agreement.

(d) Singida Urban Water & Sewage Authority

(i) Procured stores items not delivered Shs.57,416,000 Various items worth Shs. 57,416,000 were noted to have been paid for but not delivered. These items include 2 Ultrasonic Flow Meters and 2 Leak Detectors.

(e) Ngara District Council

(i) Cost of two different water works combined in one Bill of Quantities for Shs.35,681,800

During the year 2008/2009, the Council entered into contract No.CB/33/341/01/261 with M/s Gagu Investment Co Ltd Ngara for improvement of traditional water sources and also, construction of water sources for a contract sum of Shs.35,681,800.

However, our scrutiny of Bills of Quantities revealed that a combined BOQ was prepared for two different water activities. Under the circumstance, cost arrived for each water activity could not be ascertained.

(f) Bukoba Municipal Council (i) Completed projects not put in use Shs.38,474,440

The Municipal Council entered into contract with M/S Jomukaza Investments Co. Ltd for construction of 4 rain water Harvesting tanks and 2 VIPS, 6 Holes Toilets at


Mafumbo P/School, Kagondo Secondary school, Ijuganyondo Secondary School respectively.

Site visit conducted by audit team on 5th December, 2009 at Mafumbo Primary School revealed the following:

• Holes of pit latrine have been completed as stated in

the contract agreement but the same had not been put into use.

• One rain water harvesting tank was built at Kagondo Secondary School have not been put in use.

(g) Rorya District Council

(i) Contract documents not availed for audit verification

The Council entered to contract Vs M/s Kojfa Ltd vide contract No. RDC/TN/02/2008/2009 for rehabilitation of Shirati water supply scheme for Shs.26,160,000. A sum of Shs.4,000,000 was paid in advance.

Further scrutiny revealed that the contract was made on 18/11/2008 and that the work was expected to be completed within 90 days from the date when the contract was made.

However, the following information relevant for the determination of the status of the contract regarding its execution was not availed for audit verification:- • Invitation for tender, evaluation for tender, minutes

for committee which awarded the work and the criteria used to award the tender.

• Site meeting minutes. • Minutes of the Council’s Tender board. • Completion certificate and handing over certificate


(ii) Missing contract documents During the year under review a sum of Shs.102,843,600 was paid to Maheri’s Construction & General Supplies Ltd of Bunda for Rehabilitation of Two Water Supply at Nyanduga & Changuge (Sudi) village and Rehabilitation of Marasibora/ Nyanchabakenye Water Supply scheme.

However, the following information relevant for the determination of the status of the contract regarding its execution was not availed for audit verification. These documents include Contracts agreements, Bills of quantities to support the contracts agreements, Minutes of site meetings, Evaluation/progress implementation reports, Certificate of completion of works and Projects handing over certificates.

7.4 Roads Fund in LGAs

7.4.1 Lifespan and coverage of the project in Councils

The purpose of the Fund is to provide working capital to meet expenditure for rehabilitation and maintenance of roads under the Local Government Authorities. About ninety percent of the money deposited in the Fund is required to be used for maintenance and repairs of classified roads and related administrative costs on the Mainland Tanzania in accordance with approved operational plans by the PMO-RALG.

• The Roads Fund Board disburses funds to three implementing agencies, namely:

• The Tanzanian National Roads Agency - TANROADS; • The Local Authorities under the Prime Minister’s Office

for Regional Administration and Local Government – PMO-RALG; and

• The Ministry of Infrastructure Development – MOID.

TANROADS currently receives 63% of the distributable amount after the Roads Fund Board has covered its own


administration costs, PMO-RALG receives 30% and the Ministry of Infrastructure Development (MOID) receives 7%. For the financial year 2008/2009, according to the Road Fund Board accounts, Shs.69,586,565,144 was transferred to PMO-RALG for Road Fund activities in the LGAs.

7.4.2 Financing partners • According to the rules of the Fund Para 4(1), the

financial resources of the Local Government Roads Fund consist of the following:

• Hundred percent (100%) of all monies collected as road tolls imposed on diesel and petrol, transit fees heavy duty vehicle licenses, vehicle overloading fees, or from any other sources at the rate or rates to be determined and approved by parliament from time to time.

• Donations or grants received from the Road sector financing partners.

7.4.3 Audit findings

Our review of the audit of Road Funds during the year under review we noted various anomalies amounting to Shs.8,521,329,678 as summarized below:

S/N Details Amount Shs. 1. Unutilized Road Funds as at 30th

June, 2009 7,082,652,181

2. Inadequately supported contract payments

12, 065,400

3. Missing payment vouchers and improperly vouched expenditure

417,970,470

4. Funds not Receipted 79, 024,216 5. Ineligible Expenditure 8,399,850 6. Liquidation Damaged not charged 9,005,633 7. Outstanding Imprest 1,080,000 8. Unaccounted stores 41,176,120 9. Overpaid contractors 4,366,600 10. Delay in completion of road

projects 865,589,208

Total 8,521,329,678


7.5 CIDA Financing for Health and HIV/AIDS

7.5.1 Unaccounted Recurrent Transfers/Subventions to Councils Shs.393,474,500

According to records from TACAIDS, during the year 2008/2009, the Canadian International Development Agency (CIDA) financed Health and HIV/AIDS related activities to District Councils. However, our test check made to selected Councils noted that a sum of Shs.393,474,500 had not been confirmed to have been received and reflected in the Council’s books of accounts as shown in the table below.

Council Amount (Shs.) 1. Mkuranga District Council 70,753,000 2. Mafia District Council 23,171,000 3. Mbozi District Council 78,770,500 4. Chunya District Council 39,691,500 5. Kyela District Council 32,939,500 6. Morogoro Municipal Council 63,541,000 7. Morogoro District Council 84,608,000

Total 393,474,500

From the analysis above, we can conclude that all funds disbursed from financiers to Councils must be in the Councils’ plan and reflected in the accounts and properly coded. Also, financiers should clearly communicate with the reciepient of funds by notifying disbursements of funds and activities that have been approved for implementation.


CHAPTER EIGHT

8.0 PERFORMANCE EVALUATION OF PROJECTS UNDER LGDG

8.1 LGDG’s projects performance evaluation review

The overall objectives of the Local Government Development Grant (LGDG) system are to assist LGA’s to construct new infrastructure or to rehabilitate existing infrastructures, according to locally defined priorities against a broad investment menu, with a view to empowering communities, improving service delivery and reducing poverty.

During the year under review, we identified significant project monitoring deficiencies in the overall management of LGDG, which require immediate attention by the respective Councils enjoying the LGDG facilities.

We noted that most of the Councils had not fulfilled the requirements to perform monitoring visits. In addition, LGA’s officials had not complied with the LGDG requirements for inspecting LGDG works constructed in various villages. As a result of our audit review, we noted that projects were implemented with considerable delays resulting in a number of problems including among other things lack of Community contributions towards project completion, facilities completed but not put in use and poor workmanship due to lack of supervision by the Council management.

i) Delay in the completion of projects

There were noticeable delays in the completion of project works in 33 LGA’s with a total budget of Shs.2,760,364,847 as shown below:


S/N Name Of Council

Observation Status Amount Shs

1. Mbarali DC Construction of OPD Igurusi Health Centre

• No doors and windows

• Ceiling boards not fixed.

• Septic tanks not finished.

• No electricity • No water.

67,991,670

Construction of OPD at Utengule and Usangu Health Centres




• No electricity • No water • Toilet not

completed.

59,604,200

Construction of OPD Mapogolo Health Centre




• No electricity. • No water • Toilet not

completed.

75,462,000

UJEWA P/S • The building is at lintel stage.

• Window glasses not fixed

• Floor not properly completed.

7,000,000

AUMBWE P/S • 1st house has not been

7,000,000


fixed with doors and windows, floor not completed and no wall plaster.

• 2nd building is at lintel level.

JANGURU P/S • No wall plaster

• Window glasses not fixed

• Floor not properly completed.

7,000,000

MLUNGU P/S - 1st house has not been fixed with doors and windows, floor not completed and no wall plaster. - 2nd building is at lintel level.

14,000,000

2. Mbozi DC

Periodic maintenance of Kapele-Kakozi rural Road

Mitre drains and Chamber formation not completed

109,900,000

Construction of 3 classroom Ndugu Sec

Plastering and window fixing not completed

3,098,000

Construction of offices at Myovizi Sec. School

• Wall plastering not completed

• Doors not fixed

9,468,078

Ndalambo water project

• pumping installation not

25,000,000


completed

Chiwanda water project

• Pump house and pump installation not completed

31,960,000

Rehabilitation of Itaka water supply Water pump House

No water at Distribution Points (DPs)

• Pump water house not renovated

• No water at DPs

29,088,000

Renovation of Ntugwa Dispensary

• No doors • No window

tops • No floor

8,459,000

Kamsamba Health Centre

• No fencing wire

• VCT house is still below linter level

• Staff house is still below linter level

• Incinerator not constructed

36,239,294

3. Kilombero DC

Construction of 3 Boreholes Lumeno Ward,Ihanga and Msagati wards

Water pumps had not been installed

54,600,000

Construction of 2 Teacher’s houses at Lukolongo Primary at Mchombe Ward

We noted that the construction work was still at walling stage.

24,000,000

4. Morogoro MC

Construction of 2 classrooms at Uwanja wa Taifa Secondary School –

2doors, 6 windows and ceiling board were not fixed; painting, flooring

6,307,379


corridor works and the construction of chambers for latrines were not done.

Construction of one Teacher’s office and 3 classrooms Mgulasi Secondary School at Mazimbu ward

We noted that fixing of ceiling board, fascia board and painting works were not completed.

35,000,000

Construction of Administration Block and one classroom at Mwembesongo Secondary School –

We noted that fixing of doors, windows, ceiling board; fascia board, plastering, flooring and painting works were not completed.

15,983,371

5. Ulanga DC Construction of 2 class rooms at Primary School Libenanga.

We noted that; Plastering & painting were not completed; Flooring was in progress; and Door shutters were not fixed.

10,000,000

Construction of two classrooms at Narukoo Secondary.

Classrooms had the size of 9 meters x 7.2 meters instead of 7meters x 6meters as required by the approved standards. Further we noted that the construction was at walling stage.

10,000,000

Construction of two Classrooms at Celina Kombani

Rehabilitation of Administration Block, hence the construction of

10,000,000


Secondary School.

Classrooms stopped at roofing stage due to miss-located funds.

Construction of four classrooms for Ilonga Secondary school.

Two classrooms were at roofing stage and the remaining two classrooms were at finishing stage i.e. the inside walls not plastered.

20,000,000

6. Newala DC Construction works and supervision of Radio station.

The progress of construction to date is at roofing stage and the following items are outstanding:-

• Ceiling board not completed

• Window shelter

• Floor not completed.

• Door shelter.

15,696,000

7. Misungwi DC

Construction of new ward

The door and window frame fitted were not in line with the specification as per Bill of Quantities (BoQ).

The latrine building was not completed as per Bills of Quantities

38,381,800

8. Ukerewe DC

The construction of the theatre at Bwisya Health Centre- Ukara

The construction works at a foundation stage despite the lapse

39,782,720


of time 9. Mbinga DC Construction of

teacher’s house at Makita S/School

• Teacher’s house was at finishing stage with doors and windows not yet fitted, partially plastered and flooring not yet done

8,000,000

10. Namtumbo DC

Constructions of teacher’s house and toilets at Corridor Secondary School

Construction of pit latrines had not started at the time of our visit

14,000,000

Construction of Hostel at Luwegu Secondary School

The hostel was found to be at ring beam stage since July, 2009.

14,000,000

11. Songea DC Construction of two classrooms at Sokoine Primary School

One classroom had not been plastered, there is no floor and was partly roofed while windows frames were not fitted. Toilets not completed. The classroom in use was not fixed with wire mesh onto the windows.

An office built between the two classrooms is not yet plastered and the floor not properly finished

5,000,000

12. Tunduru DC

Construction of two classrooms at Changarawe Primary School

Construction was at the foundation stage

11,603,955


13. Kahama DC

Construction of Laboratory block (Three rooms) at Mwalugulu Sec. School

Outstanding works

• Painting • Mosquito wire

and wire mesh.

• Blundering and ceiling board.

24,000,000

Administration block ( 3 rooms)at Mwalugulu Sec. School

Outstanding works.

• Painting • Blundering

and ceiling board

• Doors and window shutters

• Mosquito wire and wire mesh.

10,000,000

Construction of 8 classrooms at Nyasubi Sec. School

Outstanding works

• Roofing of 4 classrooms

• Over site concrete classrooms

• Floor finishers for 6 classrooms

• Plastering for eight classrooms.

• Blundering and ceiling boards for eight (8) classrooms.

• Fascia board

16,000,000


• painting

Construction of 1 laboratory at Mwamandi Sec. School

Outstanding works:

• Fixing of Door and window frames and shutters

• Plastering internal and external walls.

• Blundering and ceiling boards.

• Painting and black board.

16,000,000

Construction of 1 laboratory at Isaka Sec. School

Outstanding works

• Doors and window frames not fixed

• Plastering external and internal walls

• Blundering and ceiling board

• Fascia board not fixed

• Painting not done

• Door shutters not fixed

• Louver frames and glasses not fixed

• Mosquito wire and wire mesh not

24,000,000


fixed.

14. Kishapu DC Construction of teacher’s houses

six Primary Schools namely Mpumbula, Ikombabuki, Mwandoma, Mwamashimba, Shiya and Iboja Primary School, noted that construction activities of teachers houses in respect of all the six Primary Schools visited were not completed

30,000,000

15. Manyoni DC

Construction of office Muhalala village

Construction work not yet started

3,470,000

Construction of office village Lusilile

The building at one side is at window stage and the other side is at foundation stage.

3,400,000

16. Singida DC Construction of water dam at Nduu village

Work not yet started

45,000,000

17. Tabora MC Construction of two(2) classrooms at Cheyo Secondary School

The construction not yet completed

14,000,000

Construction of one (1) classroom at Ndevelowa primary school

The construction was not done because the funds were transferred to Fundikira secondary school and no authority of transfer has been quoted.

7,000,000

Construction of two(2) classrooms


14,000,000


at Kariakoo secondary school

Construction of four (4) classrooms at Kakola secondary school


28,000,00

18. Kibaha DC Construction of Magindu Ward Executive Officer’s Office

Plastering and fixing of ceiling boards and doors are yet to be completed.

9,862,664

Construction of two classroom at Mlandizi “A

Project was not completed in respect of roofing, Plastering, fixing doors and ceiling board.

6,233,152

19. Kisarawe DC

Construction of OPD Building at Chole

Contract amount was Shs.11,158,000 and amount of Shs.8,841,840 was paid for uncompleted works.

8,841,840

Construction of Kiluvya dispensary

There were no initiatives being undertaken to proceed and complete the construction works

14,500,000

20. Rufiji DC Mwaseni Secondary School Hostel Building construction

The following activities have not been undertaken:-

• Internal and external walls paint and chipping not

7,235,000


yet done. • Mosquito wire

gauze not fitted.

• Doors tops not yet fitted.

21. Bahi DC Construction of

teacher’s residential house at Mpalanga

Not yet completed

156,956,262

22. Ludewa DC One (1) Market to be constructed at Ludewa head quarter by 30 June 2008

An amount shs 23,150,800 has so far been spent but the construction is not yet completed

51,806,450

One (1) Hostel to be constructed at Makonde Secondary School by 30 June 2008

An amount of Shs.18,000,000 has so far been spent but the construction is not yet completed

22,000,000

To complete construction of Kipangala Dispensary by June 2009

An amount Shs. 8,030,050 has so far been spent but the construction is not yet completed

20,000,000

One (1) Ward office to be constructed at Kilondo by 30th June 2008

An amount Shs 7,365,000 has so far been spent but the construction is not yet completed

12,000,000

23. Makete DC Construction of classrooms at Utweve secondary school

Outstanding works:- Roofing, Plastering (walls and floor) Fixing windows, doors and painting

1,530,000

Construction of two classrooms at Usisilo secondary school

Outstanding works:- Plastering (walls & floor), Fixing windows

6,000,000


Doors, ceiling board and painting

24 Njombe DC

Construction of Dormitory at Kijombe

Ceiling board not fixed. Doors not yet fixed. Window glasses not yet fixed

8,184,300

26 Kilwa DC Construction of Bus terminal

Fence is not yet constructed

25,356,300

27 Liwale DC Construction of 2 Teachers House at Barikiwa Primary School

-Plastering and painting not done -fascia board not fixed -slab not constructed -ceiling board not fixed -Toilet not completed -The construction level for the (2)Teacher house is at 80%

6,000,000

Construction of the 2 classroom at R.M. KAWAWA

Steps for Disabled students not constructed -there is crack on the veranda due to poor mixed ratio of cement and sand

14,000,000

Construction of 1 Teachers House at Kitogoro Primary School

The House has not been completed -Fence not completed -There is major crack on the veranda -Kitchen not completed -Toilet not

27,000,000


completed -store not completed -Fascia board not completed -Doors fixed not in the good quality /standard and plaster not completed - concrete slab not completed -Window fixed not in the good quality/standard

29 Kiteto DC To build 2 officer’s house at Makame and Dosidosi village

Construction of the building not started

21,350,000

30 Temeke MC

Construction of 4 classrooms at Chamazi Secondary school

Floor and plastering were found not yet done.

18,117,724

Construction of two teacher’s house and Secondary School at Kisarawe

Work is still in progress for example Floor work, plastering, ceiling board, doors, windows and toilets had not yet been completed.

11,860,000

Construction of two classrooms at Vijibweni Primary school

Construction work had not yet started.

11,176,250

31 Kigoma DC Construction of staff Quarters for six secondary schools

Not yet completed

193,649,700

Construction of 9 Ward Executive offices

Not yet completed

458,829,550

Construction of Not yet 30,000,000


Ceptic Tanks and Pit Latrines at Uvinza Health Centre

completed

32 Kasulu DC Rehabilitation of Health Centre and Dispensaries: • Mvugwe • Kinazi • Muhunga

Not yet completed

42,000,000

33 Kyela DC Construction of 2 classrooms Kasumulu

Not yet completed

6,209,000

Construction of 1 classroom Sama

Not yet completed

3,103,000

Construction of 1 Teacher house Kabanga

Not yet completed

3,605,000

34 Ilala MC Non construction of 20 pit holes at Kipawa Ward

Not yet completed

24,484,000

Construction of classroom and toilets at Vingunguti Ward not completed

Not yet completed

98,570,038

Construction of pit holes, culvert and borehole at Segerea

Not yet completed

78,809,760

Construction of Msimbazi Secondary School

Not yet completed

32,815,305

Drilling Borehole at Buguruni Ward

Not yet completed

67,060,305

35. Mbeya District Council

Construction of WEO‘S Office at Inyala

Not completed. The building is at windows level

6,800,000

Construction of 4 class rooms at

Not completed. 8,800,000


Inyala Sec. School The work is at

foundation stage

Construction of female hostel at Iwalanje Sec. School

Not completed. The work is at foundation stage

20,000,000

Construction of Laboratory at Iwalanje Sec. school

Not completed. The building is at plastering stage

10,000,000

Construction of two class rooms at Itala Sec. School

Not completed. No windows, plaster, ceiling board, flour and doors

3,000,000

Construction of 2 Teachers’ houses at Ifupa P/School

Not completed. No windows, plaster, ceiling board, floor and doors.

7,176,000

Construction of 2 Teachers’ houses at Kimondo P/school

No windows, plaster, ceiling board, floor and doors.

30,473,850

Construction of farmers centre at Tembela Village

Construction work not started, only blocks found on site

20,100,000

Construction of four classrooms at Utengule/ Usongwe (Usongwe Sec. School)

The buildings is at finishing stage

13,882,680

Complection process of Ward Office at Utengule/Usongwe (Mbalizi)

The building is at finishing stage

8,800,000

Total 2,760,364,847


ii) Community Facilities completed but not put into use

Five (5) LGA’s had spent a sum of Shs.346,489,301 for the construction of community facilities. Site visits by audit team conducted to the completed projects had noted that the facilities had not been put into use despite the fact that they had already been completed. The LGA’s were unable to establish if they had verified community needs before implementation of the projects with a view of broadening investments. Also, non utilization of completed community facilities denies the beneficiaries the opportunity to enjoy the intended services out of the completed projects. S/N Name Of

Council Name of Project

Date Completed

Amount required

Shs 1. Rungwe

District Council

Veterinary clinic at Ilimbo and Ulalabwe villages

20/6/2009

38,837,000

2. Mbinga District Council

Construction of hostel at Makita S/School

50,000,000

3. Arusha Municipal

Unused classrooms and suspension of construction work at Korona Secondary School

2007/08 Not known

4. Karatu DC

Two classrooms at Qaru Secondary School

14,589,702


5. Kyela Dc Construction of Ushirika bridge

KDC/074/2008/09/05/05

21,079,700

Construction of Kabula bridge

KDC/074/2008/09/W/05/06

25,870,500

Construction of Nyerere bridge

KDC/074/2008/09/05/06

18,750,000

Construction of pig slaughter

-

1,000,000

Total 346,489,301 iii) Delay due to lack of community contributions

An amount of Shs.59,500,000 was set aside by five (5) LGA’s for the implementation of joint projects through community participation. However, site visit conducted by audit team noted considerable delays which have been attributed by lack of community contribution towards the completion of the projects as shown on the table below. Council management should sensitize the general community for providing contribution towards development activities. Even donors would like to inject funds where the community has started contributing willingly.

S/N Name Of Council

Name of Project Remarks Amount Required

Shs 1. Mbinga DC Construction of

teacher’s house at Ukata Secondary School

• Ukata-VEO construction started in July 2009 and was yet to be finished because of poor community

8,000,000


participation

2. Songea DC Construction of a

hostel at Muhukuru Secondary School

Poor community contribution

10,000,000

3. Singida DC Construction of dispensary Wibia

Work is at foundation stage

17,000,000

4. Kilwa DC Construction of One classroom at Mpunyule Secondary School

Lack of the cooperation from the community -Door and window not fixed. -Floor not done

6,250,000

Construction of one Classroom at Kivinje Secondary School

Poor community contributions -There is crack on the verandah and inside the Classroom.

6,250,000

5. Nachingwea DC

Construction of (2) two classrooms at Mnero secondary school

• Ceiling board not fixed.

• There is major crack on the floor.

There is no Community contribution for construction of 2 Classrooms.

12,000,000


8.2 Unsatisfactory workmanship on the construction of community facilities/projects

An amount of Shs.203,573,528 was spent by eight LGA’s as shown below for the construction of new community facilities. However, site visits conducted by audit teams noted that facilities constructed require major re-works because of several defects due to unsatisfactory workmanship resulting in not achieving the intended objectives.

S/N Name Of Council

Project Amount Shs Observation

1. Iramba DC Construction of office village at Mingela

32,500,000 The building is almost complete but some defects noted • Floor at

committee room and one office room broken.

• Almost all doors were not properly fixed

Toilet not completed

2. Singida DC Rehabilitation of office ward Ilongero

6,536,662 Not satisfactory • Leakage on

the roof • Poor

workmanship in plastering.

• Door locks not properly fixed

Construction of office SACCOS Siuyu

8,500,000 Not satisfactory • Some cracks

have


developed • 5” Bricks

used instead of 6” recommended

• Iron sheet bought 30G instead of 28G,

Work still outstanding • Fixing iron

sheets • Floor and

plastering • Fixing doors

and windows

• Painting Rehabilitation of

Youth building Centre Siuyu

5,000,000 • Iron sheet used 30G instead of 28G

• Timber used for Roof trusses is 3” instead of 4” recommended.

• Works still outstanding are;

Paint doors and windows.

Construction of classroom buildings at Unyahati secondary school

18,194,920

the classroom have developed some cracks, work still in progress • Plastering

and floor • Fixing doors

and windows


• Painting

3 Monduli Construction of classrooms at Nanja Secondary School

21,105,888 Poor workmanship in the corridor.

Roofing of Rift Valley Secondary School

11,873,290 Roofing sub standard

4. Kilwa DC Construction of one classroom at Mtanga Secondary School

6,250,000 crack on the walls

Construction of One Classroom at Mbuyuni Secondary School

6,250,000 Cracks were noted on the wall , floor and the veranda, -Fascia board not fixed.

5. Nachingwea DC

Construction of (2) classrooms at Ruponda secondary school

12,000,000 Classrooms Outstanding works -Ceiling board not fixed. -There is major crack on the outside of the Verandah due to the poor mixing ratio of Cement and sand. -Step not constructed for the purpose of Disabled students.

Construction of the (2) classroom at Kipaumbele secondary school

12,000,000 Outstanding works -One door not fitted. -Ceiling board not fitted. -Floor was below standard due to the poor mixing ratio of


cement and sand and cause major crack on the floor. -There is major crack on the Verandah.

6. Rorya DC Construction of Nyamunga Secondary School

14,205,670 Outstanding works

The kitchen and the toilet were not built in MESS standards. Cracks were found on walls the bed rooms and sitting room were not built according to the prescribed size as per BOQ. The house was not handed over to the school management.

7. Kinondoni MC Construction of Ndumbwi dispensary at Mbezi juu

34,573,740 Several cracks were noted to the building.

8. Sumbawanga DC

Consruction of OPD at Sopa

14,583,358 The building was constructed without ring beams in windows and doors.

9 Kigoma DC Construction classrooms at Kidahwe Secondary School

39,335,200 Four classrooms were poorly done


CHAPTER NINE

9.0 CONCLUSIONS AND RECOMMENDATIONS

From the issues reported in the preceding chapters concerning audit of LGAs, we conclude and recommend the following actions to be taken by the Government to improve LGA’s financial management.

9.1 Conclusion (i) Non Collection of revenue from own internal sources

• There is inadequate financial and accounting arrangements to ensure the proper collection and recording of all revenue collections due to the Councils accruing from own internal sources. We have noted with much concern that almost all Councils under the Local Government Authorities are not aggressive enough in collecting revenues due under their jurisdiction and on the other hand they are not soliciting other avenues of revenue collections which might boost their financial base and increase the Council’s solvency and liquidity. As reported in previous years’ audit reports, Local Government Authorities still rely heavily in Central Government transfers. Recurrent expenditure is being financed by these transfers for more than 90%, whereby under normal circumstances to a large extent was supposed to be financed by internal sources of revenue. Audit noted out that Councils are not efficiently collecting revenues from internal resources up to the levels expected and that the compliance in paying local taxes like property tax is very low hence hampering the possibilities of Councils to increase own internal sources of revenue. Few examples of internal revenue sources where there has been considerable under collection of revenues include the following:

Five (5) Councils had uncollected revenue accruing from

Bill board advertisements of Shs.1,960,425,011


Two (2) Councils erected 496 Advertising Sign Boards without registered serial numbers. Hence, the audit could neither establish revenues due nor collected from this source.

Councils had not updated valuation of properties within their jurisdiction resulting in loosing a huge amount of revenues emanating from non payment of property tax.

The Cashew Nuts Board had not remitted Cashew nuts Export Levy amounting to Shs.2,063,206,119 which is 5% of the total export levy to seven (7) sampled Councils contrary to Regulation 38 (2) of the Cashewnut Industry Regulations, 2005, which is made under Section 27 of the Cashewnut Board Act No. 21 of 1984.

2 Councils have uncollected revenue from produce cess of Shs.313,887,389

This is evident that Councils are not aggressive and have not exerted enough efforts to collect the already existing internal sources of revenue. Because of this laxity, financial independence of LGAs becomes a complex challenge.

(ii) Option for Councils to utilize services from IFMS EPICOR

accounting system

This was pointed out again in the audit report of 2007/08 that many LGAs are not competent and comfortable in using IFMS – Epicor package. A good number of modules in the system were found not operative; many accounting activities are done outside Epicor such as record/Control of imprests, assets management and procurement planning. The conclusion was that value for money of the purchased system had not been attained because of either being partially or not used at all by the Council. Another worse development noted during the current audit is that unlike the same system being used by the Central Government and supported administratively by the Accountant General the system used by LGAs does not have Administrative and technical support in case of technical failure. Many


Councils are using unauthorized support and the involved risks are obvious. Some Councils have ended up abandoning the system because of technical failure and lack of support. The same conclusion can be reached like in my last year’s report, that value for money of the purchased system had not been attained because of either partially or not used at all by the Councils.

(iii) Unspent funds transferred to Lower Level Government

operations not accounted for

According to Order 36 of the Local Government Financial Memorandum of 1997, the authority for recurrent expenditure conveyed by the approved estimates or supplementary estimates lapses at the end of financial year. However, Authority for development projects contained in the approved development programme does not lapse at the end of the financial year. Audit observed that some Councils at the end of the year do not disclose the unspent development funds which were transferred to LLG. This is happening because Councils are transferring funds to LLG and treating them as expenditure instead of transfers. Non disclosure of unspent balances at LLG misleads the users of financial statements and its improper accountability of development funds.

(iv) Payroll Audit

For a number of years Internal control over salaries payment in the Local Government Authorities has remained to be a challenge. The same have been reported also in the audit report of previous years. The audit of 2008/09 has revealed that Shs.792,949,043 paid to non existing employees and Shs.1,755,207,927 was in respect of employees not in the Government service and the same were supposed to be returned to the Treasury. However the Council did not remit to Treasury via the Regional Administrative Secretary. As pointed in earlier in the report the amount not returned to Treasury can be misappropriated. Another challenge is attributed by the


Council having employees who possess more than one check number as this may result in heavy budget on wagebill.

(v) Updating the Local Government Legislations

The Government through PMO – RALG has taken applauded steps to improve Public Financial Management (PFM) in Local Government Authorities. It is worth mentioning that in some cases actions were taken even before amending the relevant legislations. The base for implementations/ taking actions was to comply with the existing best practices. Example of cases in which the Government took actions recently basing on best practices include the establishment of Audit Committees in Local Government Authorities and Adoption of International Public Sector Accounting Standards (IPSAS) accrual basis of accounting.

As pointed in the Councils’ individual reports that legislations guiding operations of LGAs are outdated and can no longer hold the current requirements of LGAs and stakeholders being served by these Councils including providing a legal and regulatory framework for guiding LGAs resources. Action taken by Government to improve PFM need to be supported by updated legislations.

(vi) Reporting on Development Projects Management

LGAs management are obliged to prepare detailed reports on development projects implemented in a year, these reports are usually presented to LAAC as supplementary reports for deliberations on the audited Council’s annual accounts. These reports are normally a combination of progress reports that are prepared in quarterly basis for internal consumptions. The outcome of the audit from a sample of LGAs’ projects reports prepared, revealed that these reports are misleading and do not represent the actual position of the projects being implemented by the Council. The inputs of the reports come from the LLGs where capacity of implementers is extremely low with


minimum or no supervision from the Council level. In some delicate cases it was found out that these reports are just paper work or office table reports. As pointed out in the audit report for the previous years that a huge amount of funds are being set aside by the Council to implement various development projects, most of these projects are at the LLG, then strong supervision is inevitable. Further, these project implementation reports need guidance from the PMO-RALG in order to be of use to the stakeholders.

(vii) Sustainability of the adopted IPSAs – accrual basis of accounting by LGAs

As pointed out above on the risk facing IFMS – Epicor under the possession of the LGAs, which is lacking administrative and technical support, it is also the right time to act on the adopted IPSAs and ensure its sustainability. Transition to IPSAS as an accounting framework is a good move with a view of improving the quality and consistency of financial reporting (as per sect. 40(2) of LGFA No 9 of 1982). Also, the move improves transparency and accountability which ultimately is a tool to support good governance, better decision making and improved public financial management in LGAs.

The adopted Accounting framework needs to be updated when need arises to cope up with changes agreed internationally. In this situation a post of person who will act as a “technical supervisor” to the adopted framework is important. This person will be a champion to ensure that other systems within LGAs are upgraded to manage financial data requirements of the adopted IPSAs including issuing guidelines for proper implementations of the International standards. The person will also suggest ways and means for an appropriate capacity building when need arises for the adopted framework to remain efficient and viable.

(viii) Lack of Accountability of Funds operating under the Council


According to best practice and Order 84(iii) of the Local Authority Financial Memorandum of 1997 separate financial statements are supposed to be prepared for all funds operating under the Council. Funds financial statement can not be consolidated and every Fund needs to have a complete set of financial statements. Example of these funds being referred to include Women and Youth Fund and Community Health Fund (CHF).

CHF was introduced by the Government in 1990s and was designed as a pro-poor intervention to improve the financing and provision of healthcare to households in rural areas. The fund is financed by prepayments from households on a voluntary basis, and the government provides a matching grant. While Women and Youth fund under Councils was built up by the Central Government grant and the respective Councils contributing 10% from own sources revenue, was introduced in 2000s.

For a number of years now accountability of these funds has not been transparently disclosed as required by Order No. 84(iii) and a number of instructions from LAAC. Non disclosure hinders the auditor from giving assurance as to whether these funds operate as per their establishment objectives.

9.2 Recommendations (i) Non-Collection of revenue from internal own source

Apart from the above pointed cases for ineffective collection of own sources of revenue, LGAs still engage Agents to collect own sources of revenue without carrying out a strong feasibility study. Clauses in the contract to engage the agent in many cases gives more favour to agents than the Council. So, many LGAs contracts do not adhere to the basic and fundamental procurement policy of fairness. As it was reported in my audit report issued in


July 2009 concerning revenue collection at Ubungo Bus Terminal, that the Dar es Salaam City Council entered to contract with Smart Holding Company Limited of DSM to collect revenues and rent from all retails shops and small business premises for five years. The Agent was supposed to pay Shs. 1,500,000 per day from motor vehicles using the bus terminal, keeping buses over night, parking fees and entrance fees. The audit did the study on the same sources of revenue for seven days from Thursday 21/5/2009 to Wednesday 27/5/2009 the period which was described as the “low season” by the bus terminal management. The outcome of the study indicated that the average revenue for the described sources only was Shs.4,618,629 per day. This was later confirmed by the DSM City Council management when they collected Shs.4,626,409 per day in November 2009 after the expiry of the contract with Smart Holding Company Limited on 31st October 2009. Similar cases on under collections were observed in Mkuranga District Council and Karatu District Council. From that background, I am recommending that PMO – RALG should come up with enforceable guidelines on all contracts entered by LGAs. The expectation is that these guidelines will point out the minimum criteria to be met by the Council management before even presenting the suggestions to Council Committees which involves Councillors. Also, Councils should seriously build their capacity to be able to collect their internally generated sources of revenues to build up their financial base and independence. There should be a mechanism to enforce Councils to collect all revenues due in the respective year. Respective Council Treaurers should make adequate financial and accounting arrangements to ensure the proper recording of all monies due to the Council and the proper collection, custody, and banking of such monies.

(ii) Option for Councils to utilize services from IFMS EPICOR accounting system


As we have noted above, the system being used by the Central Government is supported administratively by the Accountant General. The system used by LGAs need also to have Administrative and technical support in case of technical failure and for its sustainability.

As noted during audit of accounting records under IFMS – Epicor, many Councils’ IFMS – Epicor are either not operational or their utilization is still at a low level because of various challenges being faced by those Councils. But ICT is inevitable in the contemporary world; LGAs should not invest more in the manual system because of avoiding the challenges associated with IFMS – Epicor. The recommendation put forward is for the Government to come up with the best ICT solution for LGAs.

(iii) Funds transferred to Lower Level Government not accounted for

In many cases, development projects are financed by funds from the Central Government. Accounting treatment for unspent fund balances at the end of the financial year is supposed to follow the requirements of Order 36 of LAFM. As per the cited order, unspent balances for development projects do not lapse at the end of the year, then the same need to be clearly disclosed in the Council’s financial statements. This is another move to improve financial accountability within LGAs.

(iv) Payroll Audit

We recommend that the Treasury should not pay salaries to employees’ individual bank accounts without the endorsement of the management of the Council concerned. As previously recommended in the previous audit report that the concerned offices (LGAs, MoF, PO – PSM) responsible for paying Government employees’ salaries should closely work together to ensure prompt update of the payrolls.


The respective Council management should also strengthen their Salaries Sections to collaborate with the Heads of Councils’ departments to ensure that salaries are paid to existing employees and also promptly providing inputs for updating the payrolls.

(v) Updating the Local Government Legislations

LGAs operate within the prescribed legal frameworks. Some of these instruments include the Local Government Finances Act No. 9 of 1982 (revised 2000), Local Government (District Authorities) Act No 7 of 1982(revised 2000), Local Government (Urban Authorities) Act No 8 of 1982 (revised 2000). These Acts are supported by the Local Authority Financial Memorandum of 1997 and Local Authority Accounting Manual of 1993. In order to have meaningful reforms, especially on the adopted frameworks which are based on best practices like adoption of IPSAS and establishment of Audit Committees, the outdated guiding legal framework also needs to be repealed or amended to cope up with the current demand. Basing on the best practice is a quick win and short term measure but the focus now should be to update the Local Government legislations as a long-term measure.

(vi) Reporting on Development Projects Management

It has come into light that many Councils are preparing projects implementation reports which do not have a base in the actual status of the concerned projects, hence misleading the decision making organs. In some extreme cases these reports are just office table (desk top) reports wich have in actual fact no correlation with the real project situation in the field.

Currently the legal backup on the auditable statements is Order 84 of LAFM of 1997 which has its roots in sect.42 of the LGFA. Order 84(vi) of LAFM gives the Minister


responsible for Local Government the mandate to direct any other report/statement to be part of financial statements. This is also in line with the adopted IPSAS where supplementary information is allowed and is auditable. Hence from this background, it is recommended that the project implementation reports which are discussed by Council Committees and LAAC should be declared as part of auditable reports and be submitted along with financial statements for audit purposes.

(vii) Sustainability of adopted IPSAs – accrual basis of accounting

To be assured of sustainability of the adopted IPSAs accrual basis of accounting adopted by LGAs last year, the Government should again consider the possibility of having an office entrusted with the functions of the Accountant General for LGAs. This Office will be equivalent to that of the Accountant General in the Central Government. Alternatively as earlier pointed out in previous audit reports is to extend the roles of the existing Accountant General to LGAs. This suggestion goes hand in hand with the Government’s decision to adopt IPSAS - accrual basis of accounting. The adopted IPSASs being international standards are usually frequently updated ; hence the LGAs Accountant General will be a champion to ensure that Councils are made aware of these frequent changes and adopt them as required.

(viii) Lack of Accountability of “Funds” operating under the

Council

PMO – RALG should guide Councils to prepare accounts of these Funds in order to have meaningful accountability mechanisms and attain the goal for establishing these funds. These funds were established in different years for different Councils. Apart from preparing the respective schedules only, since its establishment Councils have not been able to prepare the financial position, financial


performance, cash flows etc for audit verification. The prepared accounts are going to be the base for the audit to give assurance on the operations of these funds.

(ix) Top management of the Councils should be employed

under Renewable Contract Employment basis

Major irregularities and weaknesses in LGAs are the same year in and year out. In actual fact in real terms the financial management situation in LGAs is not improving as expected. In order for the Government’s philosophy of decentralization by devolution (D by D) to succeed, the country needs very strong and committed leadership in the LGAs. The current employment framework of permanent and penshionable system has failed to provide that kind of leadership in the LGAs. Hence, in order to strengthen the Councils’ management, the appointing authority should shift from the permanent and penshionable employment system to the contract and renewable employment system of the Councils’ top leadership. This system should start by having performance contracts with predetermined performance deliverables during the tenure of office by the top management of the LGAs. Re-appointment should be performance based and should continue until one reaches retirement age. Such a system will allow the Government to weed out the non performers before they cause too much damage to the Councils they are serving. This will expectedly make the top managers fully responsible for coming up with the workable strategies and plans which will bring an obvious impact to the society being served while improving public financial management in our LGAs. This will also put into practice the D by D philosophy of the Government, whereby people will be motivated to participate in development activities and demand to be led by managers who are accountable.


Annexure1 List of Local Government Authorities and type of opinions issued for two years 2007/2008 and 2008/2009 S/N Name of the

Council 2007/2008 2008/2009

Unq

ualif

ied

Qua

lifie

d

Adv

erse

Unq

ualif

ied

Qua

lifie

d

Adv

erse

ARUSHA REGION 1 Arusha MC

2 Karatu DC 3 Monduli DC

4 Ngorongoro DC

5 Meru DC

6 Longido DC 7 Arusha DC

COAST REGION 8 Bagamoyo DC 9 Kibaha DC 10 Kibaha TC

11 Kisarawe DC 12 Mafia DC

13 Mkuranga DC 14 Rufiji/Utete DC

DSM REGION 15 Dar es Salaam CC 16 Ilala MC 17 Kinondoni MC 18 Temeke MC DODOMA REGION 19 Bahi DC 20 Chamwino DC 21 Dodoma MC 22 Kondoa DC 23 Kongwa DC 24 Mpwapwa DC IRINGA REGION 25 Iringa DC 26 Iringa MC


S/N Name of the Council

2007/2008 2008/2009

Unq

ualif

ied

Qua

lifie

d

Adv

erse

Unq

ualif

ied

Qua

lifie

d

Adv

erse

27 Ludewa DC 28 Makete DC 29 Mufindi DC

30 Njombe DC

31 Njombe TC

32 Kilolo DC

KAGERA REGION 33 Biharamulo DC

34 Bukoba DC 35 Bukoba MC 36 Karagwe DC 37 Muleba DC 38 Ngara DC 39 Missenyi DC 40 Chato DC KIGOMA REGION 41 Kasulu DC 42 Kibondo DC 43 Kigoma DC 44 Kigoma/Ujiji MC

KILIMANJARO REG 45 Hai DC 46 Moshi DC 47 Moshi MC 48 Siha DC 49 Mwanga DC 50 Rombo DC 51 Same DC LINDI REGION 52 Kilwa DC

53 Lindi DC 54 Lindi TC 55 Liwale DC 56 Nachingwea DC 57 Ruangwa DC MANYARA REGION 58 Babati DC



2007/2008 2008/2009

Unq

ualif

ied

Qua

lifie

d

Adv

erse

Unq

ualif

ied

Qua

lifie

d

Adv

erse

59 Hanang’ DC 60 Kiteto DC 61 Mbulu DC 62 Simanjiro DC 63 Babati TC MARA REGION 64 Musoma DC

65 Bunda DC

66 Musoma MC 67 Serengeti DC 68 Tarime DC 69 Rorya DC MBEYA REGION 70 Chunya DC 71 Ileje DC 72 Kyela DC 73 Mbarali DC 74 Mbeya DC

75 Mbeya CC 76 Mbozi DC 77 Rungwe DC MOROGORO REG 78 Kilombero DC 79 Kilosa DC 80 Morogoro DC 81 Morogoro MC 82 Ulanga DC 83 Mvomero DC

MTWARA REGION 84 Masasi DC 85 Mtwara DC 86 Mtwara MC 87 Newala DC 88 Tandahimba DC 89 Nanyumbu DC MWANZA CITY 90 Geita DC 91 Kwimba DC



2007/2008 2008/2009

Unq

ualif

ied

Qua

lifie

d

Adv

erse

Unq

ualif

ied

Qua

lifie

d

Adv

erse

92 Magu DC 93 Misungwi DC 94 Mwanza CC

95 Sengerema DC 96 Ukerewe DC

RUKWA REGION 97 Mpanda DC

98 Mpanda TC 99 Nkasi DC 100 Sumbawanga DC 101 Sumbawanga MC SONGEA REGION 102 Mbinga DC 103 Songea MC 104 Songea DC 105 Tunduru DC 106 Namtumbo DC SHINYANGA REG 107 Bariadi DC 108 Bukombe DC 109 Kahama DC 110 Meatu DC

111 Shinyanga DC 112 Shinyanga MC 113 Kishapu DC 114 Maswa DC SINGIDA REGION 115 Iramba DC 116 Manyoni DC

117 Singida DC 118 Singida MC TANGA CITY 119 Handeni DC 120 Korogwe DC 121 Korogwe TC 122 Lushoto DC 123 Muheza DC 124 Pangani DC



2007/2008 2008/2009

Unq

ualif

ied

Qua

lifie

d

Adv

erse

Unq

ualif

ied

Qua

lifie

d

Adv

erse

125 Tanga CC 126 Kilindi DC 127 Mkinga DC TABORA REGION 128 Igunga DC 129 Nzega DC 130 Sikonge DC 131 Tabora DC 132 Tabora MC 133 Urambo DC


Annexure 2

Councils with outstanding matters from the previous years Shs.53,463,558,647

S/N REGION

Name of Council AMOUNT (Shs) 1. ARUSHA Arusha MC 152,760,613 2. Karatu DC 34,006,833 3. Monduli DC 231,788,784 4. Ngorongoro DC 109,022,290 5. Meru DC 131,588,245 6. Longido DC 147,674,070 7. Arusha DC 11,681,192 8. COAST Bagamoyo DC 58,591,800 9. Kibaha DC 53,981,227 10. Kibaha TC 128,489,051 11. Kisarawe DC 46,564,030 12. Mkuranga DC 486,110,060 13. Mafia - 14. Rufiji/Utete DC 103,805,262 15. DSM Dar es Salaam CC 156,300,492 16. Ilala MC 1,278,308,844 17. Kinondoni MC 402,860,702 18. Temeke MC 471,432,244 19. DODOMA Bahi DC 526,681,114 20. Chamwino DC 361,640,048 21. Dodoma MC 2,674,561,179 22. Kondoa DC 28,000,000 23. Kongwa DC 7,287,540,049 24. Mpwapwa DC 2,316,708,350 25. IRINGA Iringa DC 275,799,930 26. Iringa MC 12,329,158 27. Ludewa DC 887,862,051 28. Makete DC 10,400,000 29. Mufindi DC 11,918,336 30. Njombe DC 20,023,290 31. Njombe TC -


32. Kilolo DC 23,999,004 33. KAGERA Biharamulo DC 90,802,517 34. Bukoba DC 3,610,000 35. Bukoba MC 33,751,500 36. Karagwe DC 12,655,635 37. Muleba DC 90,332,316 38. Ngara DC 8,525,690 39. Missenyi DC 4,924,457 40. Chato DC 147,308,858 41. KIGOMA Kasulu DC 46,786,104 42. Kibondo DC 331,274,696 43. Kigoma DC 148,672,204 44. Kigoma/Ujiji MC 837,381,805 45. KILIMANJARO Hai DC 77,821,279 46. Moshi DC 60,454,744 47. Moshi MC - 48. Siha DC - 49. Mwanga DC 947,107,626 50. Rombo DC 50,000,000 51. Same DC 230,577,000 52. LINDI Kilwa DC 341,892,150 53. Lindi DC 83,292,680 54. Lindi TC 98,535,848 55. Liwale DC 316,099,880 56. Nachingwea DC 171,200,000 57. Ruangwa DC 3,443,768 58. MANYARA Babati DC 93,007,163 59. Hanang’ DC 167,088,004 60. Kiteto DC 58,332,460 61. Mbulu DC 65,999,954 62. Simanjiro DC 235,352,007 63. Babati TC 3,085,410 64. MARA Musoma DC 46,271,879 65. Bunda DC 37,684,468 66. Musoma MC 345,712,767 67. Serengeti DC 201,375,299 68. Tarime DC 130,841,886 69. Rorya DC 440,018,683


70. MBEYA Chunya DC 45,835,124 71. Ileje DC 427,568 72. Kyela DC 12,700,025 73. Mbarali DC 591,301,176 74. Mbeya DC - 75. Mbeya CC 799,804,287 76. Mbozi DC 18,974,942 77. Rungwe DC 230,078,453 78. MOROGORO Kilombero DC 205,927,100 79. Kilosa DC 209,337,966 80. Morogoro DC 223,925,518 81. Morogoro MC 9,150,063 82. Ulanga DC 29,547,051 83. Mvomero DC 82,575,461 84. MTWARA Masasi DC 799,804,287 85. Mtwara DC 484,131,500 86. Mtwara MC 33,384,601 87. Newala DC 429,992,974 88. Tandahimba DC 881,362,362 89. Nanyumbu DC 311,436,014 90. MWANZA Geita DC 7,480,450 91. Kwimba DC 67,612,696 92. Magu DC 57,321,271 93. Misungwi DC 468,595,496 94. Mwanza CC 1,001,858,362 95. Sengerema DC 3,052,000 96. Ukerewe DC 2,866,886,202 97. RUKWA Mpanda DC 180,479,251 98. Mpanda TC 41,578,540 99. Nkasi DC 72,414,955 100. Sumbawanga DC 17,244,662 101. Sumbawanga MC 532,842,027 102. RUVUMA Mbinga DC 64,500,000


103. Songea MC 15,291,950 104. Songea DC 64,355,775 105. Tunduru DC 30,000,000 106. Namtumbo DC 13,405,000 107. SHINYANGA Bariadi DC 315,116,287 108. Bukombe DC 5,304,000 109. Kahama DC 70,236,623 110. Meatu DC 279,466,235 111. Shinyanga DC 24,669,997 112. Shinyanga MC 129,436,928 113. Kishapu DC 23,584,915 114. Maswa DC 139,554,196 115. SINGIDA Iramba DC 5,237,959,828 116. Manyoni DC 6,123,897,661 117. Singida DC 102,416,319 118. Singida MC 24,467,413 119. TANGA Handeni DC 241,081,392 120. Korogwe DC 85,501,767 121. Korogwe TC 107,433,846 122. Lushoto DC 242,392,178 123. Muheza DC 21,608,989 124. Pangani DC 480, 980 125. Tanga CC 182,500,000 126. Kilindi DC - 127. Mkinga DC - 128. TABORA Igunga DC 1,067,390,907 129. Nzega DC 431,098,876 130. Sikonge DC 267,084,730 131. Tabora DC 1,198,092,198 132. Tabora MC 867,158,992 133. Urambo DC 967,840,276

TOTAL 53,463,558,647


Annexure 3 Outstanding Items in Bank Reconciliation Statements

COUNCIL INVOLVED

Receipts in CashBook not in Bank (shs)

Unpresented Cheques (shs)

Cash in Transit (shs)

Debit in Bank

Statement not in Cash Book (shs)

Receipts in Bank

Statement not in Cash Book (shs)

Bagamoyo DC 36,238,439.45 - - 36,781,616.47 71,507,714.09 Mkuranga DC 1,012,081 13,457,465 - 597,504 2,994,005 Rufiji DC 12,585,358 30,312,562 - - - Kisarawe DC 1,580,000 10,336,596 - - 412,571 Kibaha DC 5,042,644 20,228,348 - 2,212,975 - Kibaha TC 17,500,000 17,634,329 - - - Lindi TC - 6,141,870 3,413,056 - - Lindi DC - 1,845,614.95 - 5,486,000.00 - Nachingwea DC - 29,594,846.19

- 14,499,883 9,940,518

Liwale DC - 61,453,206 - - - Kilwa DC 45,283,847 393,450,764 - - - Mbeya CC - 47,863,930.50 - - - Mbeya DC - 20,645,447.11 - - - Mbarari DC 5,055,000 23,041,715 - 119,771,172 156,000 Rungwe DC 328,707,280 459,354,629 - 63,208,893 392,483,546 Mbozi DC - 60,699,256 - - - Chunya DC - 95,445,157 - 4,045,362 143,425,345 Kyela DC 35,639,000 49,479,505.65 - - 4,888,766.68 Ileje DC - 31,718,799.08 - 33,238,575.29 - Musoma MC - 168,403,233.96 - - - Musoma DC 3,793,686.71 498,252,076.15 - 17,098,140.00 - Rorya DC

11,218,481.11 119,542,536.94 - - 435,048,116.8

9 Bunda DC - 254,840,032 - - - Serengeti DC - - - 196,224,635 7,204,701.58 Karatu D/C - - - - - Mtwara MC - 23,257,163.60 - - 1,946,470.94 Newala DC 24,351,914.85 38,130,730.51 - 531,800.00 505,200.00 Tandahimba DC - 7,037,506.70 - - - Iringa MC - 2,640,577.26 - - - Mufindi DC - 16,605,333 - - - Njombe DC 26,391,117 336,194,151 - - - Njombe TC 4,848,630 - - 9,903,148 Ludewa DC - 51,811,580.59 - - - Kondoa DC - 28,617,045 - 21,937,843 - Mpwapwa DC 1,469,955 193,090,109 - 4,381,270 - Kongwa DC 130,465,123 523,877,206 - 11,731,500 - Moshi MC - 507,987.72 9,768,195.02 - - Moshi DC - 7,245,879.24 - - - Same DC 252,739,549.36 4,464,307.96 - 74,415,325.93 - Rombo DC - 297,522,313 - 5,867,800 35,328,350


Hai DC - 274,065,868 2,946,632 - - Siha DC 419,828,009.2

3 10,303,570.34 - - 426,629,421.9

4 Mwanga DC 50,506,121.00 1,218,652.76 - - - Bukoba MC - 3,738,720.00 - - - Bukoba DC - 8,399,816 - - - Biharamulo DC - 949,899 -

- -

Chato DC - 48,049,424.00 44,568,297 - - Karagwe DC 2,608,000 7,357,689 - - - Muleba DC - 5,783,920 - - - Ilala MC - 7,324,778 - - - Temeke MC 151,552,986.56 181, 432,365.93 - - - Songea MC 11,935,181.16 2,139,304 - 4,470,400 - Songea DC 1,250,000.00 23,695,658.99 - - - Tunduru DC - 30,821,326.05 - - - Mbinga DC - 472,647,970 - 109,802,957 45,688,004.00 Namtumbo 6,379,981.93 77,718,263 - - - Tabora MC - 13,093,097.27 11,711,061.17 - - Sikonge DC - 174,975,966.55 285,084 15,145,718.52 Nzega DC - 16,545,079.21 - - - S’wanga MC 819,693.00 17,811,230.20 - - - S’wanga DC - 20,578,513 - - - Mpanda DC - 5,945,000 - - - Mpanda TC - 12,199,725 - - - Nkasi DC - 20,578,513 - - - Magu DC - 64,250,254 - - - Kwimba DC 485,501,907 78,858,265 - - - Misungwi DC 5,923,666 83,559,561 - - - Geita DC 3,400,000 31,966,582 - - - Ukerewe DC 15,872,084 48,237,164 12,489,600 31,697,812 Tanga CC - 428,605,576 50,927,516 Muheza DC - 116,844,854 Mkinga DC 38,534,593 353,208,645 25,685,134 Korogwe DC - 561,945,910 183,540,331 Lushoto DC 113,460,618 501,048,376 - - - Handeni DC - 114,339,050.46 - - - Pangani DC 25,223,036 169,870,030 - - - Korogwe TC - 71,756,483 - - - Kiteto DC - 95,317,509 - - - Babati DC - 1,379,439 - - - Babati TC - 175,046,876.78 - - - Shinyanga MC - 4,686,914

- - -

Shinyanga DC - 125,856,166 30,125,892.00 - - Meatu DC - - 13,906,802 - - Morogoro MC 172,486,994 711,904,546.00 - - - Morogoro DC 20,292,247 366,581,183 - 20,826,565 - Ulanga DC 42,501,072.40 276,203,098 - - - Kilombero DC 10,925,108 414,903,943

- - -

Mvomero DC 67,840,676 883,298,027 - 52,377,927 - TOTAL ,160,893,295 0,895,917,506 350,907,782 838,210,105 1,634,905,410


Annexure 4

Cash Survey and Surprise Check

S/N

COUNCIL INVOLVED

Surprise cash

survey not performed by Management

No maximum limits for

cash holdings

Non confirmation of Bank balances

1. Bunda DC

13,853,541

2. Serengeti DC

160,952,159

3. Nkasi DC

39,737,529

4. Rungwe DC √

5. Meru DC √

6. Monduli DC √

7. Longido TA √

8. Arusha DC √

9. Tandahimba DC √

10. Songea DC √

11. Mbinga DC √

12. Namtumbo DC √

13. Hanang DC √ √

14. Babati DC √ √

15. Babati TC √ √

16. Maswa DC √

17. Kishapu DC √

Total 214,543,229


Annexure: 5 Outstanding Debtors Shs 35,644,785,554

S/N Council Amount (Shs) 1 ARUSHA DC 149,043,196 2 MERU DC 41,445,605 3 MONDULI DC 276,613,797 4 KARATU DC 366,430,923 5 DSM CC 142,160,000 6 TEMEKE MC 553,390,809 7 KINONDONI MC 201,857,846 8 ILALA MC 364,534,000 9 BIHARAMULO DC 7,594,500 10 CHATO DC 118,547,252 11 MULEBA DC 15,216,830 12 BUKOBA DC 4,091,740 13 KARAGWE DC 2,046,860 14 BUKOBA MC 36,928,217 15 MISENYI DC 8,585,900 16 KILWA DC 840,034,868 17 LIWALE DC 322,617,000 18 NACHINGWEA 136,670,000 19 LINDI TC 27,029,420 20 RUANGWA 169,609,000 21 ILEJE DC 539, 465,530 22 RUNGWE DC 344,147,083 23 KYELA DC 267,293,378 24 MBEYA DC 227,162,915 25 GEITA DC 989,648,679 26 MISUNGWI DC 841,349,489 27 UKEREWE DC 1, 527,402.182 28 KWIMBA DC 1,303,085,000 29 MWANZA CC 743,326,030 30 MAGU DC 261,292,953 31 SENGEREMA DC 629,055,062 32 BARIADI DC 1,135,688,795 33 KISHAPU DC 24,987,407 34 SHINYANGA MC 319,741,977 35 BUKOMBE DC 512,175,563 36 MASWA DC 297,238,099 37 SHINYANGA DC 268,975,140 38 KAHAMA DC 167,124,290


39 MEATU DC 616,043,757 40 HANDENI DC 133, 391,724 41 KOROGWE TC 54,195,499 42 MUHEZA DC 278,618,752 43 KILINDI DC 1,290,521,325 44 LUSHOTO DC 34,165,637 45 PANGANI DC 279,155,622 46 KOROGWE DC 68, 841,463 47 MKINGA DC 231,069,845 48 TANGA CC 439, 984,455 49 BAGAMOYO DC 1,735,319,567 50 RUFIJI DC 375,893,347 51 KIBAHA DC 662,375,056. 52 MAFIA DC 211,113,000 53 MKURANGA DC 330,820,425 54 IGUNGA DC 496,391,103 55 URAMBO DC 137,122,083 56 NZEGA DC 582,756,903 57 KASULU DC 266,200,262 58 KIGOMA DC 449,668,000 59 BABATI DC 164,006,000 60 KITETO DC 253,292,919 61 BABATI TC 533,207,210 62 MBULU DC 151,982,000 63 HANANG DC 227,745,000 64 SIMANJIRO DC 147,355,640 65 KILOMBERO DC 22,219,417 66 ULANG DC 782,581,170 67 MPANDA DC 13,785,989 68 SONGEA DC 42,822,520 69 MPANDA TC 11, 829,158 70 SUMBAWANGA DC 44,189,740 71 SUMBAWANGA MC 727,695,221 72 IRAMBA DC 198,693,000 73 SINGIDA MC 5,994,000

74 MANYONI DC 13,775,058 75 SINGIDA DC 6,999,000 76 BAHI DC 11,640,113 77 DODOMA MC 328,911,472 78 KONGWA DC 46,079,941 79 MPWAPWA DC 132,333,782 80 IRINGA DC 499,904,862 81 LUDEWA DC 108,064,292 82 NJOMBE DC 1,087,267,743


83 IRINGA MC 129,189,497 84 MAKETE DC 107,834,706 85 NJOMBE TC 498,792,536 86 KILOLO DC 13,756,833 87 MUFINDI DC 112,024,260 88 HAI DC 160,588,434 89 MWANGA DC 751,469,483 90 SIHA DC 333,356,101 91 MOSHI DC 1,276,135,094 92 ROMBO DC 312, 138,956 93 MOSHI MC 206,809,807 94 SAME DC 1,313,369,025 95 BUNDA DC 414,796,282 96 RORYA DC 26,853,000 97 MUSOMA DC 77,970,128 98 SERENGTI 63,868,720 99 MUSOMA MC 244,445,423 100 MTWARA MIKINDANI MC 215,856,000 101 MASASI T. A 26,533,584 102 NANYUMBU DC 301,554,940 103 MTWARA DC 244, 444,000 104 NEWALA DC 391,552,244 105 TANDAHIMBA DC 664,502,115 106 MBINGA DC 606,421,040 107 SONGEA MC 177,427,184 108 NAMTUMBO DC 266,837,146 109 TUNDURU DC 421,552,377 110 SONGEA DC 42,822,520 111 SIKONGE DC 404,583,352 112 TABORA DC 376,151,054 113 TABORA MC 319,016,774 TOTAL 35,644,785,554


Annexure 6

Outstanding Liabilities Shs.51,311,586,762 S/N Council Amount (Shs)

1 ARUSHA DC 776,075,000 2 MONDULI DC 197,695,112 3 KARATU DC 30,400,000 4 DSM CC 142,957,000 5 TEMEKE MC 1,119,689,482 6 ILALA MC 2,372,441,495 7 BIHARAMULO DC 10,054,591 8 CHATO DC 109,172,712 9 MULEBA DC 19,790,455 10 BUKOBA DC 113,628,077 11 KARAGWE DC 37,427,845 12 BUKOBA MC 32,731,350 13 MISENYI DC 802,340 14 KILWA DC 272,841,063 15 LIWALE DC 249,311,000 16 LINDI DC 158,763,000 17 NACHINGWEA 400,648,000 18 LINDI TC 58,146,873 19 RUANGWA 317,664,000 20 CHUNYA DC 240,273,552 21 MBOZI DC 149,108,922 22 ILEJE DC 246,568,619 23 MBARALI 35, 830,934 24 RUNGWE DC 809,611,034 25 KYELA DC 370,678,773 26 MBEYA DC 163,180,910 27 GEITA DC 1,028,485,427 28 MISUNGWI DC 820,634,230 29 UKEREWE DC 1,980,275,767 30 KWIMBA DC 1,143,639,128 31 MWANZA CC 3,856,089,434 32 MAGU DC 135,090,704


33 SENGEREMA DC 669,211,947 34 BARIADI DC 124,812,265

35 KISHAPU DC 52, 494,847 36 SHINYANGA MC 319,741,977 37 BUKOMBE DC 285,068,182 38 MASWA DC 98,291,400 39 SHINYANGA DC 436,151,551 40 KAHAMA DC 152,625,451 41 MEATU DC 601,395,772 42 HANDENI DC 623,128,257 43 KOROGWE TC 233,433,612 44 MUHEZA DC 1,059,212,963 45 KILINDI DC 522,423,767 46 LUSHOTO DC 645,865,979 47 PANGANI DC 496,386,684 48 KOROGWE DC 382, 817,797 49 MKINGA DC 871,229,759 50 TANGA CC 235,074,820 51 BAGAMOYO DC 1,144,091,069 52 KISARAWE DC 230,612,078 53 RUFIJI DC 476,234,567 54 KIBAHA DC 989,363,004 55 MAFIA DC 277,961,000 56 KIBAHA TC 305,874,104 57 MKURANGA DC 197,698,236 58 IGUNGA DC 127,345,000 59 URAMBO DC 137,122,083 60 NZEGA DC 791,515,005 61 KASULU DC 345,725,916 62 BABATI DC 83,976,000 63 KITETO DC 457,818,828 64 BABATI TC 416,000,830


66 HANANG DC 186,430,000 67 SIMANJIRO DC 144,029,634 68 KILOMBERO DC 84,741,507 69 ULANG DC 544,424,306 70 MPANDA TC 11,928,900 71 SUMBAWANGA DC 579,584,274 72 SUMBAWANGA MC 908,667,780 73 IRAMBA DC 539,863,000 74 SINGIDA MC 313,956,976 75 MANYONI DC 322,533,431 76 SINGIDA DC 163,589,026 77 KONDOA 740,743,851 78 DODOMA MC 331,557,200 79 CHAMWINO DC 382,398,488 80 MPWAPWA DC 288,835,742 81 IRINGA DC 771,802,844 82 LUDEWA DC 75,366,628 83 NJOMBE DC 1,061,491,866 84 IRINGA MC 177,486,324 85 MAKETE DC 75,488,166 86 NJOMBE TC 1,081,669,554 87 KILOLO DC 92,422,160 88 MUFINDI DC 74,049,182 89 HAI DC 738,263,834 90 MWANGA DC 591,107,598 91 SIHA DC 380,486,026 92 MOSHI DC 768,426,761 93 ROMBO DC 355,372,361 94 MOSHI MC 336,564,115 95 SAME DC 602,775,747 96 BUNDA DC 1,422,224,588 97 RORYA DC 27,316,030 98 MUSOMA DC 191,653,667 99 SERENGTI 855,657,239 100 MUSOMA MC 148,001,323 101 MTWARA MIKINDANI MC 42,078,000 102 MASASI T. A 12,433,080


103 NANYUMBU DC 412,905,386 104 MTWARA DC 418,066,000 105 NEWALA DC 291,576,680 106 TANDAHIMBA DC 224,931,644 107 MBINGA DC 1,383,898,351 108 SONGEA MC 384,942,852 109 NAMTUMBO DC 483,280,915 110 TUNDURU DC 432,523,613 111 SIKONGE DC 77,183,477 112 TABORA DC 369,943,167 113 TABORA MC 528,644,468 TOTAL 51,311,586,762


Annexure 7 Missing Revenue Earnings Receipt Books S/N REGION NAME OF COUNCIL NO. OF

BOOKS MISSING

1 LINDI KILWA D C 1 2 MARA BUNDA 9 3 MUSOMA DC 3 4 MOROGORO KILOMBERO 2 5 KILOSA D C 744 6 MWANZA GEITA DC 4 7 KWIMBA DC 1 8 MWANZA CC 2 9 UKEREWE D C 58 10 MISUNGWI DC 6 11 RUVUMA TUNDURU 5 12 NAMTUMBO 16 13 SONGEA M C 8 14 TANGA LUSHOTO DC 18 15 MKINGA DC 3 16 IRINGA KILOLO 5 17 MAKETE 21 18 NJOMBE 2 19 NJOMBE TC 2 20 KILIMANJARO MWANGA DC 10 21 MANYARA BABATI DC 5 22 HANANG DC 12 23 MBULU DC 8 24 SIMANJIRO 1 25 RUNGWE 6 26 MTWARA MTWARA DC 1 27 NANYUMBU 5 28 MASASI TA 9 29

TANDAHIMBA 18

30 RUKWA SUMBAWANGA DC 2 31 TABORA IGUNGA 2


32 TABORA MC 2 33 NZEGA 2 34 TABORA DC 3 35 KIGOMA KASULU 13 36 KIGOMA DC 45 37 KIGOMA UJIJI 15 38 KIBONDO 45 39 ARUSHA KARATU 3 40 MERU 3 41 NGORONGORO 2 42 MONDULI 28 43 DODOMA BAHI DC 37 44 DODOMA MC 4 45 DAR ES SALAAM TEMEKE MC 99 46 KAGERA BIHARAMULO DC 9 47 KARAGWE DC 11 48 MULEBA DC 3 49 CHATO DC 3 50 MISSENYI DC 25 TOTAL 1,341


Annexure 8

Revenue Collection not Remitted by Collecting Agents Shs.1, 095,113,399 S/NO REGION NAME OF COUNCIL REVENUE

COLLECTION NOT REMITTED

BY AGENTS 1 LINDI KILWA D C 9,222,250

2 MARA BUNDA 4,413,900

3 MUSOMA M C 4,000,000

4 RORYA 2,830,000

5 TARIME 1,851,000

6 MOROGORO KILOMBERO 2,023,800

7 MVOMERO DC 12,557,000

8 MWANZA MWANZA CC 151,137,000

9 UKEREWE D C 69, 600,000

10 TANGA HANDENI DC 4,4,990,000

11 TANGA C C 1,534,000

IRINGA NJOMBE TC 1,694,500

12 KILIMANJARO HAI DC 7,999,000

13 ROMBO D C 14,000,000

14 SIHA D C 902,000


15 MOSHI DC 6,950,000

16 MANYARA MBULU DC 4,500,000

17 KITETO DC 3,155,000

18 SIMANJIRO 420,000

19 MBEYA CHUNYA DC 8,339,500

20 MBEYA C C 122,924,000

21 MTWARA NANYUMBU 700,000

22 MASASI TA 500,000

23

TANDAHIMBA 1,100,000

24 RUKWA NKASI DC 485,000

25 SHINYANGA BARIADI 29,497,700

26 KAHAMA 2,087,400

27 MASWA 1,303,000

28 MEATU 180,000

29 TABORA IGUNGA 10,479,600

30 TABORA MC 13,813,200

31 NZEGA 480,000

32 TABORA DC 630,000

33 KIGOMA KASULU 26,569,000


34 KIGOMA DC 27,576,000

35 KIBONDO 6,602,200

36 ARUSHA MONDULI 6,950,000

37 COAST RUFIJI 50,458,391

38 KISARAWE DC 49,187,500

39 DODOMA BAHI DC 5,200,000

40 DODOMA MC 15,908,100

41 DAR ES SALAAM KINONDONI 326,506,358

42 KAGERA BIHARAMULO DC 5,882,000

43 CHATO DC 77,972,000

TOTAL 1,095,110,399


Annexure 9

Payments made without proper supporting documents

(Improperly Vouched) Shs.5,313,071,671

S/N REGION Name of Council Improperly vouched 1. ARUSHA Arusha MC 1,915,798 2. Karatu DC 15,755,643 3. Monduli DC 16,838,850 4. Ngorongoro DC 15,002,500 5. Meru DC 48,508,701 6. Longido DC 21,897,650 7. Arusha DC 12,126,000 8. COAST Bagamoyo DC - 9. Kibaha DC - 10. Kibaha TC - 11. Kisarawe DC - 12. Mkuranga DC - 13. Mafia - 14. Rufiji/Utete DC - 15. DSM Dar es Salaam CC 2,331,889 16. Ilala MC 3,764,983,189 17. Kinondoni MC - 18. Temeke MC - 19. DODOMA Bahi DC - 20. Chamwino DC - 21. Dodoma MC - 22. Kondoa DC - 23. Kongwa DC - 24. Mpwapwa DC - 25. IRINGA Iringa DC - 26. Iringa MC - 27. Ludewa DC - 28. Makete DC 9, 965,000 29. Mufindi DC -

30. Njombe DC - 31. Njombe TC -


32. Kilolo DC 43,872,300 33. KAGERA Biharamulo DC - 34. Bukoba DC - 35. Bukoba MC 3,356,000 36. Karagwe DC 13,121,385 37. Muleba DC - 38. Ngara DC - 39. Missenyi DC 32,968,500 40. Chato DC 21,587,419 41. KIGOMA Kasulu DC 41,320,200 42. Kibondo DC 151,596,798 42. Kigoma DC 13,200,000 43. Kigoma/Ujiji MC 37,573,745 44. KILIMANJARO Hai DC 3,477,500 45. Moshi DC 5,978,000 46. Moshi MC 8,201,000 47. Siha DC - 48. Mwanga DC 25,956,323 49. Rombo DC 168, 625,899 50. Same DC 1,584,490 51. LINDI Kilwa DC 21,384,990 52. Lindi DC - 53. Lindi TC 3,957,000 54. Liwale DC - 55. Nachingwea DC - 56. Ruangwa DC 6,330,000 57. MANYARA Babati DC 14,108,000 58. Hanang’ DC - 59. Kiteto DC 70,502,282 60. Mbulu DC 16,283,947 61. Simanjiro DC 5,180,000 62. Babati TC 3,457,582 63. MARA Musoma DC 17,303,100 64. Bunda DC 32,617,224 65. Musoma MC 45,690,093 66. Serengeti DC 15,125,300 67. Tarime DC 13,683,658 68. Rorya DC 253,203,003


69. MBEYA Chunya DC - 70. Ileje DC - 71. Kyela DC - 72. Mbarali DC - 73. Mbeya DC 6,400,000 74. Mbeya CC - 75. Mbozi DC - 76. Rungwe DC - 77. MOROGORO Kilombero DC 7,595,000 78. Kilosa DC 141,511,614 79. Morogoro DC 10,887,510 80. Morogoro MC - 81. Ulanga DC - 82. Mvomero DC - 83. MTWARA Masasi DC 21,627,538 84. Mtwara DC - 85. Mtwara MC - 86. Newala DC - 87. Tandahimba DC 9,334,827 88. Nanyumbu DC 27,602,744 89. MWANZA Geita DC - 90. Kwimba DC 1,415,000 91. Magu DC 1,690,000 92. Misungwi DC - 93. Mwanza CC - 94. Sengerema DC - 95. Ukerewe DC 101,892,580 96. RUKWA Mpanda DC - 97. Mpanda TC 33,504,600 98. Nkasi DC 8,904,500 99. Sumbawanga DC - 100. Sumbawanga MC - 101. RUVUMA Mbinga DC - 102. Songea MC - 103. Songea DC 3,240,000 104. Tunduru DC 7,737,270 105. Namtumbo DC - 106. SHINYANGA Bariadi DC -


107. Bukombe DC 919,250 108. Kahama DC - 109. Meatu DC 6,692,329 110. Shinyanga DC - 111. Shinyanga MC 2,000,000 112. Kishapu DC - 113. Maswa DC 9,330,088 114. SINGIDA Iramba DC - 115. Manyoni DC - 116. Singida DC - 117. Singida MC - 118. TANGA Handeni DC - 119. Korogwe DC - 120. Korogwe TC 26,687,500 121. Lushoto DC - 122. Muheza DC - 123. Pangani DC - 124. Tanga CC - 125. Kilindi DC - 126. Mkinga DC - 127. TABORA Igunga DC 9,795,500 128. Nzega DC - 129. Sikonge DC 1,284,688 130. Tabora DC 5,785,000 131. Tabora MC 20,045,390 132. Urambo DC 25,208,684

TOTAL 5,313,071,671


Annexure 10

Missing Payment Vouchers (Unvouched Expenditure) Shs.2,526,117,587

S/N REGION Name of Council Missing Payment

Vouchers 1. ARUSHA Arusha MC - 2. Karatu DC 33,469,871 3. Monduli DC 29,434,509 4. Ngorongoro DC - 5. Meru DC 27,549,892 6. Longido DC - 7. Arusha DC - 8. COAST Bagamoyo DC - 9. Kibaha DC - 10. Kibaha TC - 11. Kisarawe DC - 12. Mkuranga DC 7,847,500 13. Mafia - 14. Rufiji/Utete DC - 15. DSM Dar es Salaam CC 16. Ilala MC 39,213,953 17. Kinondoni MC - 18. Temeke MC - 19. DODOMA Bahi DC - 20. Chamwino DC - 21. Dodoma MC - 22. Kondoa DC - 23. Kongwa DC - 24. Mpwapwa DC - 25. IRINGA Iringa DC - 26. Iringa MC - 27. Ludewa DC - 28. Makete DC - 29. Mufindi DC -

30. Njombe DC - 31. Njombe TC -


32. Kilolo DC - 33. KAGERA Biharamulo DC - 34. Bukoba DC - 35. Bukoba MC - 36. Karagwe DC - 37. Muleba DC - 38. Ngara DC - 39. Missenyi DC - 40. Chato DC 51,512,200 41. KIGOMA Kasulu DC - 42. Kibondo DC 42. Kigoma DC - 43. Kigoma/Ujiji MC 8,000,000 44. KILIMANJARO Hai DC - 45. Moshi DC - 46. Moshi MC - 47. Siha DC - 48. Mwanga DC 4,454,354 49. Rombo DC 8,339,920 50. Same DC - 51. LINDI Kilwa DC 13,213,192 52. Lindi DC - 53. Lindi TC - 54. Liwale DC - 55. Nachingwea DC - 56. Ruangwa DC - 57. MANYARA Babati DC - 58. Hanang’ DC - 59. Kiteto DC - 60. Mbulu DC - 61. Simanjiro DC - 62. Babati TC - 63. MARA Musoma DC - 64. Bunda DC 10,476,000 65. Musoma MC 54,373,180 66. Serengeti DC 15,054,000 67. Tarime DC 44,538,335 68. Rorya DC 743,293,455


69. MBEYA Chunya DC 10,196,945 70. Ileje DC - 71. Kyela DC - 72. Mbarali DC 9,707,802 73. Mbeya DC - 74. Mbeya CC 76,150,800 75. Mbozi DC - 76. Rungwe DC - 77. MOROGORO Kilombero DC 5,987,000 78. Kilosa DC 1,000,002,020 79. Morogoro DC 23,606,178 80. Morogoro MC - 81. Ulanga DC - 82. Mvomero DC 9,280,466 83. MTWARA Masasi DC 1,000,000 84. Mtwara DC 9,735,000 85. Mtwara MC 5,196,415 86. Newala DC - 87. Tandahimba DC 5,296,000 88. Nanyumbu DC - 89. MWANZA Geita DC - 90. Kwimba DC 55,898,000 91. Magu DC - 92. Misungwi DC - 93. Mwanza CC 160,643,900 94. Sengerema DC - 95. Ukerewe DC - 96. RUKWA Mpanda DC - 97. Mpanda TC 14,162,000 98. Nkasi DC - 99. Sumbawanga DC - 100. Sumbawanga MC 16,434,060 101. RUVUMA Mbinga DC - 102. Songea MC - 103. Songea DC - 104. Tunduru DC -


105. Namtumbo DC - 106 SHINYANGA Bariadi DC - 107. Bukombe DC - 108. Kahama DC - 109. Meatu DC - 110. Shinyanga DC - 111. Shinyanga MC - 112. Kishapu DC - 113. Maswa DC - 114. SINGIDA Iramba DC - 115. Manyoni DC - 116. Singida DC - 117. Singida MC - 118. TANGA Handeni DC - 119. Korogwe DC - 120. Korogwe TC 8,196,800 121. Lushoto DC - 122. Muheza DC - 123. Pangani DC - 124. Tanga CC - 125. Kilindi DC - 126. Mkinga DC - 127. TABORA Igunga DC 595,000 128. Nzega DC - 129. Sikonge DC - 130. Tabora DC - 131. Tabora MC 23,258,840 132. Urambo DC -

TOTAL 2,526,117,587


Annexure 11 Unspent Development Funds/Grants Non utilization of Government grants) Shs.88,720,629,195

Auditee Funds Available (Shs)

Total Expenditure

(Shs)

Unspent Balance (Shs)

%

1

Simanjiro District Council 942,370,206

685,142,000 257,228,206 27%

2

Kiteto District Council 774,128,390

345,255,180 428,873,210 55%

3

Hanang District Council 1,676,980,000

1,056,826,000 620,154,000 37%

4

Babati District Council 1,485,675,720

1,176,705,120 308,970,600 21%

5

Mbulu District Council 1,420,513,000

726,987,000 693,526,000 49%

6 Babati Tc 2,123,364,322

1,659,241,838 464,122,484 22%

7 Tanga Cc 1,910,916,837

1,471,067,669 439,849,168 23%

8

Muheza District Council 229,081,780

229,081,780 - 0%

9

Mkinga District Council 841,763,501

841,763,501 - 0%

10

Korogwe District Council 3,698,803,843

3,211,987,852 486,815,991 13%

11

Lushoto District Council 1,468,361,633

1,466,110,251 2,251,382 0%

12

Handeni District Council 2,002,561,985

2,002,561,985 - 0%

13

Pangani District Council 971,791,120

316,269,042 655,522,078 67%

14 Korogwe Tc 442,706,489 28,000,000 6%


414,706,489

15

Kilindi District Council 1,789,379,955

804,166,252 985,213,703 55%

16

Moshi Municipal Council 2,013,127,896

1,411,868,531 601,259,365 30%

17

Moshi District Council 2,100,065,413

1,183,189,031 916,876,382 44%

18

Same District Council 4,170,532,206

2,871,938,480 1,298,593,726 31%

19

Rombo District Council 1,418,341,057

1,003,611,586 414,729,471 29%

20 Hai District Council 1,708,937,397

1,238,094,284 470,843,113 28%

21 Siha District Council 2,192,328,646

1,122,696,499 1,069,632,147 49%

22

Mwanga District Council 848,178,386

295,825,943 552,352,443 65%

23

Arusha Municipal Council 3,865,739,087

3,315,971,679 549,767,408 14%

24

Meru District Council 2,342,218,000

1,071,880,000 1,270,338,000 54%

25

Monduli District Council 849,491,000

432,979,000 416,512,000 49%

26

Ngorongoro District Council 2,930,569,091

2,195,289,915 735,279,176 25%

27

Karatu District Council 2,985,098,499

2,442,845,897 542,252,602 18%

28

Longido District Council 2,170,998,031

1,477,381,810 693,616,221 32%

29

Arusha District Council 1,029,652,000

959,349,000 70,303,000 7%

30 Magu District 10,663,903,541

8,472,525,020 2,191,378,521 21%


Council

31

Kwimba District Council 3,885,725,488

2,806,205,107 1,079,520,381 28%

32 Mwanza Cc 5,961,722,781

5,535,948,582 425,774,199 7%

33

Misungwi District Council 2,236,132,201

1,166,948,540 1,069,183,661 48%

34

Geita District Council 2,327,657,990

2,156,310,027 171,347,963 7%

35

Sengerema District Council 2,469,044,000

1,630,162,000 838,882,000 34%

36

Ukerewe District Council 3,410,013,554

2,204,796,906 1,205,216,648 35%

37

Bukoba Municipal Council 1,170,575,604

1,170,575,604 - 0%

38

Bukoba District Council 3,498,447,863

2,281,928,595 1,216,519,268 35%

39

Misenyi District Council 3,175,647,261

2,457,408,583 718,238,678 23%

40

Biharamulo District Council 1,882,170,441

1,463,802,749 418,367,692 22%

41

Chato District Council 3,333,401,872

2,747,694,242 585,707,630 18%

42

Karagwe District Council 2,277,864,839

2,408,311,839

(130,447,000) -6%

43

Muleba District Council 3,324,220,380

2,537,595,870 786,624,510 24%

44

Ngara District Council 2,172,779,104

1,618,562,037 554,217,067 26%

45

Shinyanga Municipal Council 1,416,788,956

1,059,592,863 357,196,093 25%


46

Shinyanga District Council 1,753,302,000

1,355,669,436 397,632,564 23%

47

Bariadi District Council 4,852,059,759

3,015,965,736 1,836,094,023 38%

48

Kahama District Council 5,054,073,312

3,367,355,750 1,686,717,562 33%

49

Bukombe District Council 4,123,571,858

3,436,426,006 687,145,852 17%

50

Maswa District Council 2,922,642,204

2,218,514,711 704,127,493 24%

51

Meatu District Council 3,912,691,310

2,851,674,000 1,061,017,310 27%

52

Kishapu District Council 3,711,238,281

3,687,519,654 23,718,627 1%

53

Musoma Municipal Council 2,216,331,617

2,069,676,140 146,655,477 7%

54

Musoma District Council 4,543,497,522

3,299,198,003 1,244,299,519 27%

55

Rorya District Council 2,579,403,562

1,597,901,974 981,501,588 38%

56

Tarime District Council 2,835,058,054

1,599,586,575 1,235,471,479 44%

57

Bunda District Council 3,696,283,870

2,298,508,688 1,397,775,182 38%

58

Serengeti District Council 2,838,547,814

1,644,384,724 1,194,163,090 42%

59

Temeke Municipal Council 5,372,953,019

4,598,117,092 774,835,927 14%

60

Ilala Municipal Council 8,487,725,461

7,690,700,732 797,024,729 9%

61 Kinondoni 2,492,861,763 1,726,406,389 69%


Municipal Council

766,455,374

62 Kibaha Tc 265,456,879

209,906,707 55,550,172 21%

63

Bagamoyo District Council 3,582,600,329

2,251,764,854 1,330,835,475 37%

64

Mkuranga District Council 2,298,043,326

1,454,062,807 843,980,519 37%

65

Rufiji District Council 1,179,370,528

1,059,583,506 119,787,022 10%

66

Mafia District Council 682,616,000

636,785,000 45,831,000 7%

67

Kisarawe District Council 967,904,795

255,605,988 712,298,807 74%

68

Kibaha District Council 1,747,144,924

365,514,525 1,381,630,399 79%

69 Lindi Tc 829,079,800

829,079,800 - 0%

70

Lindi District Council 1,612,220,628

1,612,220,628 - 0%

71

Ruangwa District Council 1,488,255,000

1,232,451,000 255,804,000 17%

72

Nachingwea District Council 1,358,728,990

1,018,243,040 340,485,950 25%

73

Liwale District Council 200,078,000

200,078,000 - 0%

74

Kilwa District Council 2,872,830,742

2,322,321,930 550,508,812 19%

75

Mtwara Municipal Council 1,482,644,000

772,679,000 709,965,000 48%

76

Mtwara District Council 2,784,623,000

2,784,398,000 225,000 0%

77 Masasi 756,645,413 317,138,000 42%


District Council

439,507,413

78

Nanyumbu District Council 3,761,180,776

3,366,333,903 394,846,873 10%

79

Newala District Council 3,271,682,179

2,399,183,805 872,498,374 27%

80

Tandahimba District Council 1,644,934,964

1,088,116,370 556,818,594 34%

81 Mbeya CC 2,011,180,000

1,716,994,000 294,186,000 15%

82

Mbeya District Council 1,467,130,503

1,467,130,503 - 0%

83

Mbarari District Council 2,679,088,217

2,679,088,217 - 0%

84

Rungwe District Council 510,945,765

510,945,765 - 0%

85

Mbozi District Council 3,434,191,300

1,609,064,917 1,825,126,383 53%

86

Chunya District Council 1,792,093,023

1,770,448,663 21,644,360 1%

87

Kyela District Council 705,094,400

604,104,050 100,990,350 14%

88

Ileje District Council 838,675,674

592,564,749 246,110,925 29%

89

Songea Municipal Council 2,013,317,577

1,386,454,291 626,863,286 31%

90

Songea District Council 897,268,767

897,268,767 - 0%

91

Tunduru District Council 3,222,961,095

1,509,357,376 1,713,603,719 53%

92

Mbinga District Council 1,454,990,777

1,310,785,876 144,204,901 10%


93 Namtumbo 2,274,260,340

1,089,915,136 1,184,345,204 52%

94

Iringa Municipal Council 1,253,522,355

1,210,647,622 42,874,733 3%

95

Iringa District Council 4,172,397,081

3,747,315,715 425,081,366 10%

96

Mufindi District Council 3,705,593,807

2,293,454,062 1,412,139,745 38%

97

Njombe District Council 3,752,666,511

2,695,714,145 1,056,952,366 28%

98 Njombe Tc 2,003,547,295

1,345,550,580 657,996,715 33%

99

Makete District Council 2,464,388,368

1,829,453,155 634,935,213 26%

100

Ludewa District Council 3,311,058,334

1,581,205,634 1,729,852,700 52%

101

Kilolo District Council 1,363,031,180

1,103,031,180 260,000,000 19%

102

S’wanga Municipal Council 2,623,390,704

2,528,291,899 95,098,805 4%

103

S’wanga District Council 4,244,737,779

2,707,665,510 1,537,072,269 36%

104

Mpanda District Council 8,208,481,232

6,135,726,594 2,072,754,638 25%

105 Mpanda Tc 3,627,222,418

3,042,239,889 584,982,529 16%

106

Nkasi District Council 1,490,721,317

1,321,108,569 169,612,748 11%

107

Dodoma Municipal Council 3,386,096,768

3,102,321,128 283,775,640 8%

108

Chamwino District Council 1,008,089,408

985,052,400 23,037,008 2%

109 Bahi 3,459,102,179 2,064,562,380 60%


District Council

1,394,539,799

110

Kondoa District Council 1,910,490,351

1,668,414,159 242,076,192 13%

111

Mpwapwa District Council 1,491,450,186

1,229,453,504 261,996,682 18%

112

Kongwa District Council 2,152,921,978

1,269,589,873 883,332,105 41%

113

Kigoma Municipal Council 1,125,864,866

810,915,953

314,948,913

28%

114

Kigoma District Council 3,688,655,145

2,067,352,008 1,621,303,137 44%

115

Kasulu District Council 3,094,497,836

2,384,197,341 710,300,495 23%

116

Kibondo District Council 522,100,000

522,100,000 - 0%

117

Singida Municipal Council 898,986,624

599,026,166 299,960,458 33%

118

Singida District Council 1,986,918,157

1,690,930,044 295,988,113 15%

119

Manyoni District Council 3,228,732,756

2,459,476,601 769,256,155 24%

120

Iramba District Council 3,109,136,000

1,277,280,000 1,831,856,000 59%

121

Tabora Municipal Council 2,561,267,418

2,150,445,226 410,822,192 16%

122

Tabora District Council 4,254,205,233

2,722,908,667 1,531,296,566 36%

123

Sikonge District Council 1,565,573,837

579,161,022 986,412,815 63%

124 Urambo District 4,080,482,623

3,100,968,769 979,513,854 24%


Council

125

Igunga District Council 1,572,463,896

1,250,901,853 321,562,043 20%

126

Nzega District Council 2,548,890,330

1,796,085,629 752,804,701 30%

127

Morogoro Municipal Council 2,747,644,233

2,148,340,457 599,303,776 22%

128

Morogoro District Council 2,850,061,000

1,122,128,000 1,727,933,000 61%

129

Kilosa District Council 2,754,395,043

1,918,884,753 835,510,290 30%

130

Ulanga District Council 2,104,355,682

1,581,383,731 522,971,951 25%

131

Kilombero District Council 1,940,727,432

898,384,654 1,042,342,778 54%

132

Mvomero District Council 2,850,061,000

1,122,128,000 1,727,933,000 61%

Total

328,203,178,845

239,482,549,650

88,720,629,195 27%


Annexure 12

Unclaimed salaries not remitted to Treasury Shs.1,755,207,927 S/N Auditee Amount Shs. 1 Simanjiro District Council 18,000,000 2 Hanang District Council 16,830,209 3 Mbulu District Council 90,980,000 4 Mkinga District Council 35,479,881 5 Korogwe District Council 15,256,295 6 Lushoto District Council 177,445,526 7 Handeni District Council 18,242,390 9 Korogwe District Council 14,670,786 10 Moshi District Council 30,615,338 11 Rombo District Council 6,426,190 12 Meru District Council 5,444,655 13 Monduli District Council 10,913,470 14 Ngorongoro District Council 2,830,096 15 Arusha District Council 23,470,727 16 Kwimba District Council 48,658,484 17 Mwanza City Council 6,550,271 18 Ukerewe District Council 44,301,445 19 Bukoba District Council 16,563,102 20 Biharamulo District Council 18,719,910 21 Chato District Council 32,064,208 22 Muleba District Council 39,094,404 23 Ngara District Council 8,848,137 24 Shinyanga Municipal Council 7,543,853 25 Shinyanga District Council 419,876


26 Maswa District Council 5,346,099 27 Meatu District Council 355,660 28 Serengeti District Council 39,411,359 29 Kinondoni Municipal Council 7,881,135 30 Bagamoyo District Council 12,733,912 31 Kisarawe District Council 57,185,500 32 Ruangwa District Council 15,306,455 33 Nachingwea District Council 413,078,601 34 Masasi District Council 69,325,030 35 Newala District Council 8,402,388 36 Tandahimba District Council 3,704,361 37 Mbeya District Council 4,785,211 38 Chunya District Council 4,190,020 39 Ileje District Council 19,275,577 40 Songea District Council 2,870,603 41 Tunduru District Council 14,708,759 42 Mufindi District Council 33,891,077 43 Njombe District Council 33,891,077 44 Makete District Council 19,687,504 45 S’wanga Minicipal Council 6,453,674 46 Mpanda District Council 12,065,999 47 Mpanda Town Council 6,741,580 48 Dodoma District Council 34,936,580 49 Kigoma Municipal Council 21,564,345 50 Kigoma District Council 21,564,345 51 Kasulu District Council 15,729,337 52 Kibondo District Council 63,339,162 53 Singida District Council 7,306,705 54 Manyoni District Council 51,531,093

55 Urambo District Council 10,444,974


56 Igunga District Council 14,043,347 57 Morogoro Municipal Council

3,434,870 58 Ulanga District Council 30,652,336

Total 1,755,207,927

Annexure 13

Payments made to Retired, Absconded and Terminated employees Shs.792,949,073 S/N Auditee Amount (Shs) 1 Muheza District Council 3,059,721 2 Same District Council 11,244,193 3 Rombo District Council 7,410,882 4 Hai District Council 8,644,916 5 Siha District Council 8,005,533 6 Arusha Municiplal Council 49,214,296 7 Monduli District Council 10,409,351 8 Karatu District Council 26,706,581 9 Misungwi District Council 48,387,390 10 Bukombe District Council 3,455,247 11 Meatu District Council 964,000 12 Musoma Municiplal Council 52,297,597 13 Rorya District Council 53,818,498 14 Tarime District Council 89,166,635 15 Bunda District Council 64,473,298 16 Temeke Municiplal Council 21,619,310 17 Kibaha District Council 870,306 18 Mkuranga District Council 24,514,834


19 Rufiji District Council 1,513,199 20 Mtwara Municiplal Council 35,330,769 21 Mbeya District Council 6,494,951 22 Rungwe District Council 5,505,445 23 Mbozi District Council 1,529,575 24 Iringa Municiplal Council 1,340,407 25 Mufindi District Council 17,597,121 26 Ludewa District Council 17,750,803 27 Mpanda District Council 6,590,046 28 Dodoma Municiplal Council 12,876,901 29 Chamwino District Council 4,465,436 30 Bahi District Council 20,051,171 31 Kondoa District Council 8,764,949 32 Kongwa District Council 2,571,806 33 Manyoni District Council 5,522,483 34 Iramba District Council 6,603,902 35 Tabora District Council 2,962,346 36 Igunga District Council 19,002,846 37 Kilosa District Council 84,159,227 38 Kibondo Distrct Council 6,520,331 39 Kigoma Municipal Council 29,810,603 40 Morogoro Municiplal Council 11,722,170

Total 792,949,073


Annexure 14 Statutory Deductions not Remitted to LAPF Shs.1,114,230,706

S/N Auditee Amount Shs. 1 Tanga Cc 38,433,676 2 Mkinga District Council 29,652,604 3 Handeni District Council 43,080,000 4 Moshi Municipal Council 68,665,956 5 Rombo District Council 45,391,700 6 Mwanga District Council 221,183,887 7 Kahama District Council 9,981,598 8 Kishapu District Council 4,755,528 9 Mtwara Municipal Council 7,489,188 10 Mtwara District Council 58,449,979 11 Tandahimba District Council 9,141,069 12 Mbeya City Council 19,748,029 13 Kyela District Council 21,940,861 14 Singida Municipal Council 4,533,060 15 Iramba District Council 66,257,000 16 Igunga District Council 127,345,000 17 Nzega District Council 78,025,174 18 Morogoro District Council 235,117,058 19 Ulanga District Council 19,922,997 20 Kilombero District Council 5,116,341

Total 1,114,230,706


Annexure 15 Review of effectiveness of Audit Committee’s performance in LGAS

S/N Auditee No

evidence of

Committee meetings

No Audit Committee

Charter

No Audit Committee

report

1 Simanjiro DC x x

2 Kiteto DC x x

3 Hanang DC x x

4 Babati DC x x

5 Babati TC x x

6 Lushoto DC x x

7 Handeni DC x x

8 Korogwe TC x x

9 Kilindi DC x x

10 Moshi MC x x x

11 Moshi DC x x x

12 Rombo DC

13 Arusha MC

14 Meru DC x x

15 Karatu DC x

16 Ukerewe DC x

17 Misenyi DC x

18 Biharamulo DC x x x

19 Chato DC x x

20 Bukombe DC x x

21 Meatu DC x


22 Rorya DC x x

23 Bunda DC x x

24 Serengeti DC x

25 Dar es salaam City x

26 Kibaha TC x

27 Bagamoyo DC x

28 Mkuranga DC x

29 Kilwa DC x

30 Mtwara DC x

31 Nanyumbu DC x

32 Newala DC x

33 Rungwe DC x

34 Mbozi DC x x

35 Ileje DC x

36 Songea DC x x

37 Mbinga DC x x

38 Namtumbo x

39 Mufindi DC x

40 Makete DC x

41 Chamwino DC x

42 Bahi DC x

43 Mpwapwa DC x x

44 Igunga DC x x

45 Morogoro DC x

46 Kilombero DC x


Annexure 16 Over expenditure by Councils Shs. 25,815,903,623 S/N Auditee Receipt Shs. Expenditure

Shs. excess Shs

1

Kiteto DC

8,545,491,442

8,845,430,070

(299,938,628)

2

Hanang DC

1,064,749,000

10,718,101,000

(9,653,352,000)

3

Mbulu DC

9,602,542,000

10,316,303,000

(713,761,000)

4

Tanga CC

12,254,862,383

12,555,790,681

(300,928,298)

5

Muheza DC

7,866,329,911

8,421,923,621

(555,593,710)

6

Mkinga DC

5,366,026,897

5,366,530,693

(503,796)

7

Lushoto DC

18,198,157,673

18,266,456,160

(68,298,487)

8

Handeni DC

11,070,109,938

11,434,397,595

(364,287,657)

9

Korogwe TC

3,169,029,172

3,218,024,927

(48,995,755)

10

Kilindi DC

5,680,684,412

5,998,070,283

(317,385,871)

11

Moshi MC

9,363,659,109

9,793,886,765

(430,227,656)

12

Same DC

13,646,654,714

14,095,377,010

(448,722,296)

13

Hai DC

10,967,654,939

11,441,016,437

(473,361,498)

14

Mwanga DC

9,983,352,581

10,045,714,303

(62,361,722)

15

Ngorongoro DC

5,393,241,320

5,994,733,614

(601,492,294)

16

Arusha DC

10,014,863,000

10,250,562,000

(235,699,000)

17

Chato DC

4,332,259,845

4,525,880,459

(193,620,614)

18

Shinyanga MC

6,651,302,508

6,670,159,959

(18,857,451)


19

Shinyanga DC

8,364,461,663

8,872,292,008

(507,830,345)

20

Meatu DC

10,503,675,000

10,702,917,000

(199,242,000)

21

Musoma MC

6,890,492,841

6,945,043,011

(54,550,170)

22

Musoma DC

13,534,488,488

13,682,179,482

(147,690,994)

23

Rorya DC

6,054,380,411

6,062,434,166

(8,053,755)

24

Bunda DC

12,484,555,841

13,086,851,493

(602,295,652)

25

Dar es salaam City

5,433,504,000

6,518,461,000

(1,084,957,000)

26

Kinondoni MC

38,721,385,268

39,380,896,499

(659,511,231)

27

Kisarawe DC

12,282,223,292

12,387,862,893

(105,639,601)

28

Ruangwa DC

7,839,433,000

8,507,781,000

(668,348,000)

29

Mbarari DC

7,940,949,288

8,196,065,319

(255,116,031)

30

Rungwe DC

16,549,880,507

16,895,509,825

(345,629,318)

31

Mbozi DC

18,425,337,922

21,035,937,306

(2,610,599,384)

32

Ileje DC

5,589,702,081

5,804,688,528

(214,986,447)

33

Songea MC

6,308,492,589

6,333,168,545

(24,675,956)

34

Tunduru DC

8,057,898,082

8,058,635,674

(737,592)

35

Namtumbo DC

5,313,573,417

5,352,447,352

(38,873,935)

36

Njombe DC

11,958,245,676

11,978,211,219

(19,965,543)


37

Makete DC

5,919,359,146

5,971,799,047

(52,439,901)

38

Ludewa DC

8,202,228,314

8,626,102,644

(423,874,330)

39

Kilolo DC

12,361,313,256

13,048,918,347

(687,605,090)

40

Bahi DC

9,801,442,558

10,615,332,515

(813,889,957)

41

Kigoma MC

6,346,443,000

6,399,857,000

(53,414,000)

42

Kibondo DC

11,376,890,000

11,827,635,000

(450,745,000)

43 Tabora MC 9,199,273,953

9,567,543,641

(368,269,688)

44

Urambo DC

14,701,423,097

14,731,981,579

(30,558,482)

45

Morogoro MC

13,541,558,557

13,976,148,560

(434,590,003)

46

Kilosa DC

16,748,921,060

16,913,347,545

(164,426,485)

Total 463,622,503,151

489,438,406,774

(25,815,903,623)


Annexure 17 Under expenditure by Councils Shs. 47,171,455,877

S/N Auditee Receipt Shs. Expenditure Shs.

Unspent balance Shs.

1

Simanjiro DC 6,566,539,825 5,590,309,811

976,230,014

2

Babati DC 9,750,661,720 9,380,264,720

370,397,000

3

Babati TC 5,076,752,860 4,703,535,849

373,217,011

4

Korogwe DC 13,622,168,436 13,548,372,742

73,795,694

5

Pangani DC 5,199,028,927 4,979,547,520

219,481,407

6

Moshi DC 17,677,005,905 17,098,561,825

578,444,080

7

Rombo DC 12,012,272,850 11,592,839,609

419,433,241

8

Siha DC 5,976,779,390 4,487,355,652

1,489,423,738

9

Arusha MC 14,646,783,000 13,348,285,000

1,298,498,000

10

Meru DC 11,028,562,000 10,972,283,000

56,279,000

11

Monduli DC 7,141,863,000 7,056,366,000

85,497,000

12

Karatu DC 14,646,783,000 8,342,850,938

6,303,932,062

13

Longido DC 3,301,360,000 3,116,603,000

184,757,000

14

Magu DC 17,937,071,346 16,981,228,251

955,843,095

15

Kwimba DC 14,114,933,621 11,728,797,993

2,386,135,628

16

Mwanza CC 24,181,919,891 23,428,021,868

753,898,023

17

Misungwi DC 9,406,000,780 9,194,454,347

211,546,433

18

Geita DC 23,426,924,990 19,771,905,000

3,655,019,990

19

Sengerema DC 18,363,535,000 17,652,995,000

710,540,000

20

Ukerewe DC 8,558,151,906 8,499,411,066

58,740,840

21

Bukoba MC 5,119,950,069 5,102,728,943

17,221,126


22

Bukoba DC 10,145,069,235 9,789,043,779

356,025,456

23

Misenyi DC

6,231,912,804

6,166,917,938

64,994,866

24

Biharamulo DC 9,024,893,130 8,936,793,579

88,099,551

25

Karagwe DC 16,621,698,100 16,551,806,816

69,891,284

26

Muleba DC 10,318,329,201 10,082,039,349

236,289,852

27

Ngara DC 7,808,426,772 7,795,866,372

12,560,400

28

Bariadi DC 15,989,407,339 15,517,107,419

472,299,920

29

Kahama DC 17,744,967,219 17,564,084,145

180,883,074

30

Bukombe DC 10,431,745,992 10,310,466,917

121,279,075

31

Maswa DC 12,095,248,419 11,743,659,442

351,588,977

32

Kishapu DC 8,410,869,312 8,348,013,571

62,855,741

33

Tarime DC 15,290,031,998 14,546,521,107

743,510,891

34

Serengeti DC 9,187,687,869 9,156,692,632

30,995,237

35

Temeke MC 28,079,452,780 27,400,077,791

679,374,989

36

Ilala MC 38,202,487,800 37,350,308,092

852,179,708

37

Kibaha TC 6,132,493,997 6,059,003,705

73,490,292

38

Bagamoyo DC 13,811,138,880 13,639,981,240

171,157,640

39

Mkuranga DC 8,847,072,686 8,441,887,990

405,184,696

40

Rufiji DC 11,667,153,787 11,478,037,306

189,116,481

41

Mafia DC 4,319,565,000 4,306,790,000

12,775,000

42

Kibaha DC 4,809,686,804 4,645,929,849

163,756,955

43

Lindi TC 4,349,261,339 3,647,140,325

702,121,014

44

Lindi DC 11,585,715,000 11,361,971,000

223,744,000


45

Nachingwea DC 9,499,690,000 9,288,138,000

211,552,000

46

Liwale DC 8,406,338,000 6,296,725,000

2,109,613,000

47

Kilwa DC 13,727,349,851 11,633,566,758

2,093,783,093

48 Mtwara MC 5,084,053,000 4,725,897,000 358,156,000

49 Mtwara DC 8,412,785,000 8,393,163,000

19,622,000

50

Masasi DC 13,587,698,181 13,087,359,677

500,338,504

51

Nanyumbu DC 5,711,814,823 5,457,215,963

254,598,860

52

Newala DC 9,353,964,604 9,176,083,699

177,880,905

53

Tandahimba DC 11,233,822,582 10,847,325,507

386,497,075

54

Mbeya CC 15,156,818,590 14,913,101,560

243,717,030

55

Mbeya DC 15,521,605,155 15,291,513,924

230,091,231

56

Chunya DC 10,340,106,413 10,029,618,941

310,487,472

57

Kyela DC 9,833,846,198 9,781,382,328

52,463,870

58

Songea DC 10,315,074,796 10,176,999,568

138,075,228

59

Mbinga DC 22,037,137,948 21,576,540,288

460,597,660

60

Iringa MC 7,192,843,748 7,056,078,061

136,765,687

61

Iringa DC 13,583,252,002 13,314,689,327

268,562,675

62

Mufindi DC 16,238,914,839 15,758,019,735

480,895,104

63

Njombe TC 5,382,623,450 5,343,271,670

39,351,780

64

S’wanga MC 6,812,977,775 6,763,811,158

49,166,617

65

S’wanga DC 14,214,899,085 13,615,653,800

599,245,285

66

Mpanda DC 16,283,554,000 16,191,463,000

92,091,000

67

Mpanda TC 7,500,151,726 6,665,620,001

834,531,725

68

Nkasi DC 6,956,215,498 6,707,905,372

248,310,126


69

Dodoma MC 11,910,223,542 11,802,402,395

107,821,147

70

Chamwino DC 7,590,453,740 6,939,103,140

651,350,600

71

Kondoa DC 16,612,604,168 16,582,799,244

29,804,924

72

Mpwapwa DC 11,609,657,008 10,970,244,228

639,412,780

73

Kongwa DC 9,744,435,504 9,547,306,986

197,128,518

74 Kigoma DC 14,097,857,580 14,055,830,000 42,027,580

75 Kasulu DC 20,327,077,569 20,113,612,452

213,465,117

76

Singida MC 8,279,720,390 7,843,777,308

435,943,082

77

Singida DC 15,724,030,000 14,434,737,000

1,289,293,000

78

Manyoni DC 10,129,752,520 9,506,807,951

622,944,569

79

Iramba DC 15,683,643,791 12,462,895,491

3,220,748,300

80

Tabora DC 7,412,395,118 7,277,086,913

135,308,205

81

Sikonge DC 5,480,113,744 5,480,113,744

-

82

Igunga DC 11,395,996,000 10,922,730,000

473,266,000

83

Nzega DC 13,951,314,303 13,729,939,194

221,375,109

84

Morogoro DC 12,549,200,000 12,463,477,000

85,723,000

85

Ulanga DC 13,905,656,016 13,168,844,020

736,811,996

86

Kilombero DC 13,304,030,993 13,059,621,451

244,409,542

87

Mvomero DC 12,549,200,000 12,463,477,000

85,723,000

Total

1,023,504,263,229

976,332,807,352

47,171,455,877


Annexure 18

Laxity in control over revenue collection accuruing from Bill boards advertisements Shs.1,960,425,011

S/N

Council Source of Revenue not collected

Amount (Shs)

1

Kinondoni Municipal Council

Uncollected revenue of street light poles’ Bill boards

281,736,000

Uncollected revenue from advertisement and small bill boards at Magomeni division

376,200,845

Uncollected revenue due to in adequate control over Bill boards registration

12,898,000

Uncollected revenue from bill board three clients

248,400,000

Under collection of Bill board revenue due to the reason that, Illuminated billboard paid as Non illuminated billboard and in some cases other billboards were under calculated

114,791,338

Shortly remittance of revenue collection from agents who did not remit the collections

326,506,358

2 Temeke Municipal Council

Outstanding taxes on billboards not collected by Municipal Council

219,959,596

Uncollected revenue due to unrecorded billboards

7,032,000

3 Ilala Municipal Council

Outstanding Revenue Collection from Bill boards

35,314,220

Outstanding Debtors pertaining to Billboards advertisement

135,266,712


4 DSM City Sign boards erected at Ubungo Bus Terminal revealed that, sign boards were undercharged

60,730,300

5 Bagamoyo DC

Revenue from 39 Billboards located at Bagamoyo Town, Ruvu, Chalinze, Mdaula, Ubena, Bwawani, Lugoba and Msata was not collected

468,096,000

Total 1,960,425,011

Annexure 19 Stores not recorded in ledgers Shs 111,504,667

S/N Council Amount (Shs.)

1. Arusha DC 4,406,555 2. Karatu DC 6,915,750 3. Monduli DC 19,626,400 4. Meru DC 10,253,000 5. Kigoma DC 1,327,000 6. Kilwa DC 1,335,000 7. Musoma MC 1,382,500 8. Serengrti DC 2,989,500 9. Musoma DC 24,329,500 10. Mwanza CC 70,395,800 11. kwimba DC 3,130,000 12. Korogwe TC 42,538,631 13. Pangani DC 4, 793,900 14. Biharamulo DC 7,596,000 15. Karagwe DC 5,600,000 16. Muleba DC 18,866,350 17. Bukoba DC 10,424,000 18. Chato DC 17,252,700 19. Rungwe DC 31, 580,000 20. Mpanda TC 36,254,817 21. Sumbawanga MC 6,089,500 22. Maswa DC 18,280,000


23. Sikonge DC 38,055,750. 24. Igunga DC 8,956,300 25. Urambo DC 3,868,300 Total 111,504,667

Annexure 20

Goods paid for but partly/not delivered Shs.1,835,459,394

S/N Council Items Amount (Shs.) 1. Kilolo DC Drugs and Medicines not

delivered 110,783,000

2. Mufindi DC Drugs and Medicines not delivered

5,969,500

3 Njombe TC Fire Rescue Motor Vehicle not delivered

320,000,000

4. Kigoma DC Drugs and Medicines not delivered

29,982,800

3. Kilwa DC Unconfirmed delivery of Iron Sheets

1,350,000

5. Liwale DC Two motor cycles procured but not delivered

13,400,000

6. Bunda DC 20 Motor cycles procured not delivered

85,400,000

7. Musoma MC Procurement of Motor vehicles and Motor cycles not delivered

73,574,255

8. Serengeti DC Receipt Books Purchased and paid for but is short delivered Shs.3,489,000

3,489,000

10. Kilombero DC Procurement of Motor vehicles not delivered

50,338,000

11. Magu DC Procurement of Motor vehicle not delivered

40,000,000

12. Iramba DC Medical supplies paid for not delivered

11,327,000

14. Muheza DC Procurement of Motor vehicle not delivered

118, 000, 000

15. Tanga CC Procurement of Motor vehicle not delivered

88, 000,000

16. Korogwe TC Goods purchased and paid for but not delivered

3,186,200


17. Biharamulo DC Drugs and Medicines not delivered

24,172,800

18. Moshi DC Six Motorcycles paid for but not delivered

31,680,000

19. Rungwe DC Procurement of Motor vehicle not delivered

47,722,975

20. Newala DC Procurement of Motor vehicles and Motor cycles not delivered

86,580,354

21. Nkasi DC Undelivered hospital Equipment

3,750,100

22. Mpanda TC Chickens incubator and fire vehicles not delivered

307,840,000

23. Bariadi DC Tractors and Motor Cycles paid for but not delivered

53,112,000

24. Maswa DC Procurement of Motor vehicle not delivered

122,030,010

25. Shinyanga DC Stores paid for but not delivered

2,000,000

26. Sikonge DC Goods paid for but not delivered

2,392,000

27. Drugs and medicine not delivered

1,871,400

28. Igunga DC Motor vehicles paid for but not delivered

197,508,000

Total 1,835,459,394


Annexure 21 Inadequate documentation of contracts and projects records Shs.1,930,772,578

S/N Council Inadequate documented

Contracts, Projects and Investments.

Amount (Shs.)

1. Karatu DC Variation orders not approved by appropriate authority

54,022,995

2. Arusha MC Repair of 17 skip buckets not in annual procurement plan

67,847,850

3. Kongwa DC construct a staff canteen, staff toilets and DED’s toilet

46,619,300

4. Makete DC Retention money not transferred to deposit Account

10,999,755

5. Biharamulo DC

Payment to contractor without contract agreement

16,980,000

6. Bukoba MC The Contract Agreement not signed

16,722,976

7 Karagwe DC Liquidated damage not surcharged 15,360,000

8 Chato DC Valuation cost not adequately supported

4,000,000

9 Rombo DC Hire of Private Motor Vehicles without Contract Agreements

170,437,513

10 Siha DC Handing over and final certificate in respect of the completed phase 1 produced

Advance payment to the

contractor was not covered by a security bond contrary to Clause 51.1 of the contract

Correspondence file to review

or determine the request for extension of time and letter of acceptance with approval of Council Tender Board were not produced when called for

299,994,269

11 Mwanga DC Minor works exceeding the limit of Shs 7,500,000

138,427,806

12 Same DC Contract agreement not submitted

49,537,200


13 Kiteto DC Irregular variation of contract sum 28,465,620

14 Chunya DC Liquidated damages not charged 23,641,807

15 Newala DC Maintenance works of motor vehicle not routed to TEMESA

34,166,923

16 Nanyumbu DC Missing contracts documents 22,000,000

17 Tandahimba DC

Delayed works not charged Liquidated damages

4,847,885

18 Mpanda DC Missing bill of quantities

Liquidated damage not deducted

5,647,980

14,113,035

19 Nkasi DC Liquidated damages not deducted from the contractors

15,435,400

20 Mpanda TC Liquidated damage not deducted 4,056,668 20 Sumbawanga

MC Payments made to consultants without contract agreement

35,000,000

21 Meatu DC Nugatory expenditure on terminated contract

128,493,790

22 Dar es Salaam City Council

Missing Shares Certificate for Shares from EAMEATCO

1,263,576,001

23 Kinondoni MC Supply of urchasesreconditioned tractors instead of Brand new

66,981,600

24 Ilala MC Unapproved extra cost on Construction of Tabata Dispensary

83,390,000

25 Liwale DC Investment not supported by relevant particulars.

16,055,000

26 Kilombero DC Improper handling of contract documents/informations

389,137,224

27 Ulanga DC Contract Documents not produced

51,491,597

28 Sengerema DC Liquidated Damages not charged 31,746,000

29 Mbinga DC Missing contract documents 18,406,050 30 Songea DC Execution of contract works

without Engineer’s estimates

9,430,960 31 Muheza DC Retention money not

transferred to deposit account 26,558,116

32 Korogwe TC Payment for Pavilion Building not Supported

4,000,000

TOTAL 1,930,772,578

CAG REPORT:LOCAL GOVERMENT 2008/2009

Documents

Transcript of CAG REPORT:LOCAL GOVERMENT 2008/2009