HOAP Tanzania PRBS 2004-05

Review of Progress and Emerging Conclusions

9 June 2006 – Dar es Salaam

HOAP Tanzania PRBS 2004-05

Two aspects to the audit:

– Financial matters – Procurement

HOAP Tanzania PRBS 2004-05

Key Findings - Financial Audit:– Financial reporting– Audit Report– Monitoring

Findings and Observations

HOAP Tanzania PRBS 2004-05

Findings - Financial Audit

HOAP Tanzania PRBS 2004-05Financial Reporting key findings:• clear audit trail for donor payments to Govt Tanzania• annual accounts are prepared promptly• 2004-05 not fully compliant with cash-based IPSAS

HOAP Tanzania PRBS 2004-05OAG Audit key findings(1):• audit undertaken promptly• audit opinion on each Vote supported by Auditor General's Report •AG audit not fully compliant with INTOSAI standards

HOAP Tanzania PRBS 2004-05OAG Audit key findings(2):• opinions:

– 34% unqualified– 63% qualified– 3% adverse opinion.

• What action is being taken to remove these qualifications?

HOAP Tanzania PRBS 2004-05OAG Audit key findings(3):• summarised AG Report for Parliament draws out main issues• PAC takes evidence on AG reports

HOAP Tanzania PRBS 2004-05PRBS Monitoring Key Findings:• mid-year and full-year monitoring• monitoring by joint teams from donors (not just BRBS) and Govt of Tanzania• overall conclusions drawn• action plans preapred

HOAP Tanzania PRBS 2004-05

Observations on Financial Audit

HOAP Tanzania PRBS 2004-05Financial Reporting – Observations (1)• The system of cash budgeting and accounting includes items of “commitment” which are not cash expenditures;• 200 page accounts obscure accountability • Significant under- and over-spends against budget

HOAP Tanzania PRBS 2004-05Financial Reporting – Observations (2)• Fraud and corruption estimated by the World Bank at 20% of Govt spending = US$300 m a year• AG Report identifies US$35m of irregular payments (plus US$70m “unvouched”)• Denial of risk of fraud.

HOAP Tanzania PRBS 2004-05OAG Audit – Observations (1)• Auditor General identifies four key weaknesses in Public Expenditure:

– Fraud– Corruption– Conflicts of Interest– Non-compliance with law

How are these being addressed?

HOAP Tanzania PRBS 2004-05OAG Audit – Observations (2)• PEFAR recognises weaknesses in OAG capacity and working methodologies• Audit opinions are not fully compliant with International Standards.• No qualifications due to the four high level matters• Possible qualification from failure to apply IPSAS fully• Some items included as errors are technical, or due to timing differences.

HOAP Tanzania PRBS 2004-05Monitoring - Observations• Data holes – for example in poverty monitoring – not well aligned to MDG reporting in 2010 & 2015• PAF changed between 2004-05 and now moving towards MKUKUTA – not consistent year-on-year