By SEBASTIAN MRINDOKO, 9th August 2010 @ 12:06 DAILY NEWS THE outgoing management of the Tanzania Railway Limited (TRL) has been accused of duping the government and obtaining massive funds unjustly, the Controller and Audit General (CAG) special audit report of the financial year 2008/2009 has uncovered. The government on its part paid the funds without observing its commitment as per directive issued by the Prime Minister, the authority for the release of the funds. According to the report findings, a questionable funding of TRL employees top-up basic salaries of 8,753,381,582/- was paid by the government between March, 2008 and June, 2009. The audit could not establish whether the funds were issued as a loan or equity. The report noted the absence of formal agreement entered into between the two shareholders TRL and the government showing terms and nature of the salary top-up funds disbursed. The government made the payments without any analytical review and there was no evidence to confirm the correctness of the TRLs requests and payments made, the report disclosed. When reached for comments, the Minister for Finance and Economic Affairs, Mustafa Mkulo and his Infrastructure Development counterpart, Dr Shukuru Kawambwa said at different times that they have not seen the report. I have not seen the report, but once I see it, I will be in a position to comment, Dr Kawambwa said. Mr Mkulo on his part, said that he could not comment on the report because he was in his constituency in Kilosa, Morogoro Region. The TRL Managing Director Hundi Lal Chaudhary dismissed the report, saying that the company has been conducting its own auditing every year by an independent firm and report submitted to the government. Although I have not seen the findings by the CAG, I suppose the report is wrong because we have been receiving clean report from the auditing firm and the government has never queried it, he said. The CAG report unearthed further that TRL requests based on merely approximation made vide letter with ref. No. TRL/MD/SAL/08 dated 8th April, 2008. Further, funds disbursed to TRL had no budgetary provision and were made without parliamentary approval. The report revealed further that of the total of 8,753,381,582/- disbursed to TRL, only 4,770,390,791/- was ascertained to have been accounted for in the TRL bank statements. The remaining amount of 3,982,990,791/- could not be verified to have been credited to the relevant bank accounts due to non-provision of the respective bank statements for the months of July, 2008 to February, 2009. The report shows also that apart from the first quarter fixed concession fees of 1.8 million US dollar (about 25.2 bn/-) paid, TRL had not paid any of the subsequent payments amounting to 16,377,165,707/- including 10,017,450,443 owed to December, 2008 as per the audited accounts. This is a serious non- compliance with the conditions of the Concession Agreement which indicates a sign of financial incapability on the part of the investor, the report revealed. The government committed itself to furnish TRL with funds to top up the salary increase for 5 months from March to July 2008, which was to avert the workers strike that would have taken place in case salary increase was not effected, however, TRL claims exceeded the government commitment. The TRL claims included allowances unrelated to the government commitment, among others, are acting or duty allowance, on call allowance, house allowance, aggregate allowance, enhancement house allowance, current overtime hours, overtime running staff subsistence allowance, instruction allowance and responsibility allowance, all totalling 2,672,403,103.50/- which are mostly performance oriented allowances that could be met by operational out-turn. The TRL continued to claim beyond the government commitment period of 5 months - March to July, 2008 and from August 2008 to June 2009, the time of audit which a total of 6,621,693,933/- was paid. Despite having increased the salary of its employees by 15 per cent in February, 2008, TRL based its calculations on the January, 2008 payroll figures before the increase when requesting funds for top-up salary claims from the government. The TRL started from the minimum wage of 87,600/- instead of 100,740/- which was already effected, therefore unjustly relieved itself at the expense of the government the burden of the margin for all salary level. The claim included Statutory contributions totalling 1,200,950,604/- in respect of National Social Security Fund (NSSF), Public Pension Scheme (PPS), Skills Development Levy (SDL) and Public Service Pensions Fund (PSPF), which were to have been deducted from the salary payments. Also the claim included salary top-up portion to 44 newly recruited employees which were not part of the government commitment to provide salary top-up funds. Therefore, the amount which was supposed to have been claimed and released as government top-up of salaries for the period of March to July 2008 would correctly have amounted to only 1,355,514,234/-. In view of the above, TRL over claimed 8,419,373,997/- and the government over released 7,397,867,348/- for the period of March, 2008 to June 2009.