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BoT Twin Towers insured at $332m: Original construction cost estimate was just $89.05

Discussion in 'Jukwaa la Siasa' started by BAK, Jul 27, 2007.

  1. BAK

    BAK JF-Expert Member

    Jul 27, 2007
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    CAG`s audit queries on BoT: Ballali survives fiery Bunge interrogation

    -Admits excessive payments in legal fees
    -But not clear on gold mine company dealings


    BANK of Tanzania (BoT) Governor Dr Daudi Ballali was yesterday grilled for several hours by a parliamentary watchdog committee in Dodoma over allegations of funds mismanagement and misuse that have been hounding both him and the bank for several months now.

    Among other things, members of the parliamentary finance and economic affairs committee asked Ballali to explain away excessive legal fees amounting to over 8bn/- that the BoT paid to one local law firm in the name of Mkono and Company Advocates for services rendered to the bank.

    The governor was pressed upon to clarify on several key audit queries on the central bank accounts raised by the latest report of the Controller and Auditor General (CAG). Under the Bank of Tanzania Act of 2006, the CAG is a statutory auditor for the central bank.

    Although the CAG's report gave the central bank a clean certificate of audit for the 2005/06 financial year, it also raised poignant question marks over a number of BoT payments made during the same period.

    These include the more than 8bn/- in legal fees that had been paid to Mkono and Co. Advocates by June 30 last year for services rendered in relation to the long-running Valambhia case. Our sources say several members of the Bunge Committee, chaired by former cabinet minister Dr Abdallah Kigoda, pinned down Ballali on the matter and demanded a detailed answer.

    The BoT supremo is said to have responded by acknowledging that the fees were indeed excessive, and assured committee members that the bank's management would discuss the matter with the law firm in question with a view to cutting down the ongoing payments.

    He also managed to stave off committee questions on CAG queries with regard to payments from the central bank's external commercial debt account; the subject of a pending, deeper special audit ordered by the government at the behest of the International Monetary Fund (IMF).

    However, according to our sources, Ballali was not so convincing on the subject of BoT's involvement with both Mwananchi Gold Company Limited and Meremeta Gold Mine Company Limited, which was also underlined in the CAG's report.

    ''The governor acknowledged to committee members that BoT is a shareholder in Mwananchi Gold, and extended a loan to that company on the basis that gold refining is an important activity for the national economy, and moreover the law governing central bank operations allows for such loans to be extended,'' said a reliable source.

    But the source added that despite direct questioning from committee members, Ballali failed to explain clearly what Mwananchi Gold offered as collateral for the loan, or to identify who exactly are the company's other shareholders (apart from BoT).

    ''All he said was that the loan is fully secured�but there was no other explanation aside from that,'' the source said.

    No representative from the National Audit Office was present at yesterday's session as committee members continued to delve deeper into the CAG's report on the BoT accounts.

    The Bunge Committee's eventual endorsement of the report came on the heels of fresh reports that the deputy opposition leader in parliament, Dr Wilbrod Slaa (Karatu - CHADEMA), is getting set to table a private member's motion in the House for the formation of a parliamentary probe team to investigate the central bank.

    The much-awaited special audit ordered by the government in tandem with the IMF is also in the process of selecting an international auditor able to meet the targeted deadline for conclusion of the exercise, announced as October this year.

    According to recent THISDAY findings, the government has suspended all payments from the BoT's external payment arrears account pending the audit which, based on its terms of reference, will centre on assessing all transactions from the EPA account during 2005/06, as well as verification, monitoring, and control procedures related to the account.

    The IMF on its part has also strongly recommended a 'safeguards assessment' of financial controls and management of resources at the BoT, which is to complement the planned special audit.

    According to IMF policy guidelines, a 'safeguards assessment' is a diagnostic exercise carried out by IMF staff to ''help prevent the possible misuse of IMF resources and misreporting of information.''
  2. R

    Rwabugiri JF-Expert Member

    Jul 28, 2007
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    Kweli Bongo kuna mazingaombwe,
    Sasa vitisho vya mkono kuishitaki kulikoni kwa madai hajalipwa hizo 8bn na BOT?? na hiki nini?
  3. BAK

    BAK JF-Expert Member

    Jul 28, 2007
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    Bongo hiyo inaliwa na wasiyo na mapengo. Alikuwa anatisha ili wasimwagie mchanga kitumbua chake. Ukweli ni kwamba bulungutu kachukua!!!
  4. omarilyas

    omarilyas JF-Expert Member

    Jul 28, 2007
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    Mlitegemea nini katika kesi ya ufisadi inayosimamiwa na KIGODA(aliyekuwa waziri wa mipango)akisaidiwa na MALIMA(swahiba wake manji)?

  5. K

    Kakalende JF-Expert Member

    Jul 28, 2007
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    Mpe mchawi mwanao akulelee?
  6. omarilyas

    omarilyas JF-Expert Member

    Jul 28, 2007
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    Ndio kosa alilolifanya "MUUNGWANA" na sasa tayari anaona moto wake....

  7. m

    mwewe Senior Member

    Jul 28, 2007
    Joined: Jul 17, 2007
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    Si Kigoda huyo huyo mwenye kashfa ya kuharibu mikoko Bagamoyo?

    Hiyo kamati ilipaswa kuwa chini ya kina Slaa au Zitto.
  8. BAK

    BAK JF-Expert Member

    Jul 24, 2008
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    Mkono atarudisha lini pesa ambazo hakustahili kulipwa? CAG kishasema hivyo sasa wanangoja nini kumdai pesa hizo?
  9. BAK

    BAK JF-Expert Member

    Jul 30, 2008
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    Auditors: BoT directors enjoyed tax-free haven

    -This will change, says new central bank management

    Dar es Salaam

    MEMBERS of the Bank of Tanzania (BoT) Board of Directors have been earning millions of shillings in directors’ fees and allowances from the central bank without paying relevant taxes, it has been revealed.

    The latest 2006/07 BoT audit conducted by Ernst & Young on behalf of the controller and auditor general (CAG) has uncovered that the various monetary perks paid to central bank board members during the period under audit amounted to over 300m/-, without deduction of taxes in compliance with the Income Tax Act of 2004.

    During 2007, the BoT paid 1m/- apiece to each of the board members as director’s fees alone, the audit report notes.

    Amongst the longer-serving BoT directors is the Permanent Secretary in the Ministry of Finance and Economic Affairs, Gray Mgonja, who is a board member by virtue of his position as Treasury PS.

    Other board members who apparently benefited from this practical tax holiday included the then BoT governor Daudi Ballali (now deceased), Deputy Governor Juma Reli, Hamis Omar, Prof. Lettice Rutashobya, Prof. Joseph Semboja, Prof. Bruno Ndunguru, Michael Shirima, and Dr Natu Mwamba.

    Apart from the directors’ fees, the BoT also last year paid out-of-pocket allowances to the following board members - Ballali (7.7m/-), Reli (11m/-), Mgonja (11m/-), Omar (21.45m/-), Prof. Rutashobya (7.7m/-), Prof. Semboja (11m/-), Prof. Ndunguru (24.2m/-), Shirima (23.1m/-), and Dr Mwamba (8.8m/-).

    In 2006, the following members of the BoT board of directors were also paid 1m/- as directors fees: Ballali, Reli, Mgonja, Julian Raphael, A.M. Rashid, Prof. Rutashobya, Prof. Semboja, Prof. Ndunguru, Shirima, and Dr Mwamba.

    In the same year, they were also paid out-of-pocket allowances as follows: Ballali (18.7m/-), Reli (13.75m/-), Mgonja (13.2m/-), Raphael (11.55m/-), Rashid (6.6m/-), Prof. Rutashobya (8.25m/-), Prof. Semboja (12.1m/-), Prof. Ndunguru (33m/-), Shirima (26.4m/-), and Dr Mwamba (13.2m/-).

    In total, according to the audit findings, the BoT paid 301,701,000/- during 2006/07 to members of its board of directors in the form of either directors fees or out-of-pocket allowances, ’’without deducting income tax and thus denying the Tanzania Revenue Authority (TRA) substantial income.’’

    ’’The directors fees and out of pocket allowances are not subjected to tax (although) these payments are liable to tax as employment income or secondary employment for non-executive directors,’’ says part of the audit report seen by THISDAY.

    According to the auditors, it was the responsibility of the BoT (management) to deduct income tax from the directors' fees and allowances.

    ’’Any failure to comply (with the Income Tax Act of 2004) may result in the bank (BoT) being unnecessarily penalized,’’ says the report, adding: ’’There is reputation risk as well.’’

    ’’Voluntary disclosure and payment of the required taxes may prevent penalties being imposed to the bank,’’ it further states.

    It is understood that as a result of these audit findings, the new BoT management under Governor Prof Benno Ndulu has agreed that as from July 1 this year, directors’ fees and sitting allowances for central bank board members shall be subjected to tax deductions in compliance with the prevailing Income Tax legislation.

    Meanwhile, according to the audit report, ex-BoT governor Ballali received a monthly salary of 10,157,750/- in 2006, which was increased to 11,198,916/- last year.
  10. t

    think BIG JF-Expert Member

    Jul 30, 2008
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    ... wakati mwingine ili kupunguza "msukumo wa damu" na "msongo wa mawazo" unabidi uvute pumzi kwa nguvu kisha ukubali ule usemi wa "mwenye nacho, uongezewa!"
  11. Masanja

    Masanja JF-Expert Member

    Jul 30, 2008
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    Ukisoma habari hii na ukalinganisha jinsi walalahoi tunavyokamliwa kodi mpaka mwisho..Inauma sana!

    Imagine mwalimu na mshahara wake wa elfu themanini alipe kodi..wakati vigogo wanapokea millions tax free...

    Kweli inauma, inauma sana!

    Harafu unaambiwa Tanzania ni nchi ya amani..tusameheane tuu!
  12. M

    MiratKad JF-Expert Member

    Jul 30, 2008
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    JK anasema Tuvumilie tu!
  13. m

    mTz JF-Expert Member

    Jul 30, 2008
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    Yaani Tanzania imekuwa kama shamba la bibi. It is really disgusting.
  14. BAK

    BAK JF-Expert Member

    Aug 3, 2008
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    Security in BoT cash vaults ompromised - audit report

    Dar es Salaam

    SOME money vaults at the Bank of Tanzania’s TwinTowers headquarters in Dar es Salaam and the central bank branch office in Mwanza do not have security cameras, hence compromising the safety of huge sums of stored cash, a new report has revealed.

    ’’Movements within the bank’s strong-rooms cannot be effectively monitored in the absence of security cameras, and this in turn increases the risk associated with fraudulent activities,’’ says the latest 2006/07 BoT audit report by Ernst & Young.

    According to the report, a physical verification by auditors discovered that the (BoT) Mwanza branch strong rooms and the Dar es Salaam head office’s lower vault, where 1,000-shilling and 500-shilling denomination banknotes are stored, do not have security cameras.

    It notes that the absence of such key surveillance equipment made it difficult for BoT security staff to ’’monitor movements and other activities inside the strong rooms, during and after working hours.’’

    In its recommendations, auditors Ernst & Young � which did the work on behalf of the Controller and Auditor General (CAG) - called for the urgent installation of security cameras in all sensitive BoT areas.

    ’’Strong rooms are among the most sensitive areas of the bank, and require close monitoring at all times,’’ asserts the audit report, adding: ’’Security cameras enhance monitoring controls and as such the same should be installed in all strong rooms without any delay.’’

    It is understood that on the basis of these recommendations, the BoT board of directors has now instructed the bank management to move swiftly to install the security devices, approving a budget for implementation of this directive during 2008/09.

    Government sources have described the reported absence of security cameras in the BoT vaults as a ’’surprise’’, given that the bank has already spent billions of shillings for security installations in its state-of-the-art TwinTowers headquarters as well as upcountry branches.

    Meanwhile, the audit report also uncovered a backlog in the physical counting and reconciling of cash deposits made to BoT by commercial banks.

    ’’(This includes) a backlog of physical counting of bulk cash received by the BoT as deposit from commercial banks, as per the bank’s procedure (Bundles Processing System),’’ says the report.

    It states that some of the uncounted deposits stored in the bank’s vaults date back to 2002, and are ’’still sitting in the strong rooms waiting to be counted.’’

    ’’Furthermore, we noted a number of complaints lodged by commercial banks about discrepancies reported to them by the BoT of cash deposited by them,’’ says the report.

    Auditors discovered that the deficit suffered by the BoT on the cash deposited by 23 commercial banks between July 2006 and June 2007 amounted to 216,764,480/-.

    The central bank should seriously address this problem, they recommended in their report.

    The BoT management has said it will by October next year have installed all necessary equipment for easier processing and counting of bulk cash deposited by commercial banks.

    The auditors also raised serious queries on the physical security of the BoT server rooms.

    Facilities and activities inside the main server rooms at the BoT Twin Towers headquarters are presently visible to bank personnel and guests who are outside the server rooms, ’’contrary to IT security best practices,’’ they noted.

    According to their report, the bank’s main server room is also accessible through at least two side doors with no electronic recording, besides having a main door with standard security access controls.

    At another BoT server room located along Chole Road in Dar es Salaam’s Masaki suburb, auditors also found that the floor of the room was not raised, and thus exposed to flooding.

    ’’This site is frequently visited by staff from the ministry of finance, to gain access to the ministry’s power connections which run through this site. This site is devoid of a fire detection system, and the walls of the server room are prone to dampness,’’ states their report.
  15. J

    Jamco_Za JF-Expert Member

    Aug 3, 2008
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    Kwa taasisi kubwa hivyo kukosa kamera nafikiri ni kitu ambacho kinatakiwa kufanyiwa kazi haraka sana, inahatarisha usalama wa pesa za wananchi.
  16. H

    Hofstede JF-Expert Member

    Aug 3, 2008
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    Hii bado sijaielewa hebu toa ufafanuzi, kivipi?. Tanzania ni nchi ya sheria sasa ukitaka watu wavamie na kuchinja wengine unataka kutupeleka wapi?, cha muhimu hapa ni kuwaweka custodians accountable, kosa kama hili mtu anatolewa na nafasi yake inachukuliwa na mtu makini zaidi, hii italeta umakini. na sio kuvamia bunge unataka wabunge wafanye nini, zaidi wachukue madaraka ya wao kuwa walinzi wa bank au?. Hebu elezea maana hapo sijapa corelation kati ya mambo haya mawili.
  17. BAK

    BAK JF-Expert Member

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    Labda wakuu wa BoT akiwemo Ndullu wameliacha hili la kuweka camera makusudi ili waweze kuingia katika strong room na kujichukulia mabulungutu ya pesa na kuyatia kwenye brief cases bila wasi wasi wowote. Eti bado wanafanya cash reconciliation za pesa walizopokea kutoka mabenki ya ndani tangu 2002!!!! miaka 6 iliyopita!!!! Sijui ya mwaka 2008 itafanywa lini. Huu ni uzembe wa hali ya juu.

    Ndiyo maana nasema huyu Ndullu anastahili kufukuzwa kazi pamoja na vyeti chungu nzima alivyokuwa navyo lakini hana uwezo kabisa wa kuongoza taasisi yoyote ile achilia mbali taasisi nyeti kama BoT.
  18. Kuhani

    Kuhani JF-Expert Member

    Aug 3, 2008
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    Kutaka Wabunge wakatwekatwe vichwa ni hoja bangi, lakini usitetee ufanisi wa Bunge hapa.

    Bunge la Tanzania ndio msimamizi wa mambo yose. They're ultimately responsible for all of our maladies.
  19. M

    Mkandara Verified User

    Aug 3, 2008
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    Jamani navyokumbuka Mama menghji alisema fedha nyingi za ujenzi wa BoT umeikwenda ktk ujenzi wa security ya volt hii sasa imekuwaje jengo zima limeonekana lina upungufu sehemu ambayo imedaiwa kuchukua fedha nyingi?
  20. Rev. Kishoka

    Rev. Kishoka JF-Expert Member

    Aug 3, 2008
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    Kwa nini kuna umuhimu wa kuwa na kamera kwenye vault wengine mtauliza, ni ili kuhakikisha kuwa risk management and compliance inafanyika zaidi ya dual control.

    Mnaweza kuwa wawili ndani ya vault, inawezekana kuwa umempa mwenzio mgongo, yeye akasunda bulungutu kwenye mfuko, kama kamera hakuna, na kuna uzembe wa kufanya mahesabu, ni nani atajua lini na ni nani aliiba pesa?

    NImeshangaa sana kusikia kuwa Cash Vault ya BOT haina kamera ndani! That is a gross error katika financial world na tukisikika nchi nyingine au mabenki mengine, kamwe hatutaweza kuaminiwa!