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- Feb 11, 2007
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Call for transparency on State House funds
By Mwanamkasi Jumbe
THE CITIZEN
By Mwanamkasi Jumbe
THE CITIZEN
Prominent economists are calling for a review to enhance transparency in the management of the Consolidated Account, which caters for State House, the public debt and general services, to curb the loss of public funds.
The experts said the subdivisions within the account made it difficult for the Controller and Auditor-General (CAG) to effectively audit it.
The account contains funds meant to finance expenditure in three distinct areas the State House, public debt and general services. Contacted for comment by telephone last evening, the Chief Secretary, Mr Philemon Luhanjo, declined to comment, saying: "I'm not sure you're a reporter.
If you want any comment from me, come to my office or write to me." The latest CAG report indicates that internal controls over government assets have continued to deteriorate, resulting in the loss of public funds.
In the audit for the year ending June 2008, the CAG established that losses accrued through the Consolidated Account increased by 52 per cent � from Sh2.3bn in 2007 to Sh3.5bn last year, prompting the economists to raise queries over the way in which it is being managed.
In an interview with The Citizen in Dar es Salaam, a top economist-cum politician, Prof Ibrahim Lipumba, who is also the national chairman of the Opposition Civic United Front, said: "As the term suggests, no one is able to define the activities referred to as 'general services', and this is what makes it difficult to trace funds spent through the account."
He said that whether the funds were spent on sensitive areas or not "the fact remains that the money is being used without certification".
Prof Lipumba added: "This creates the feeling that some people might be using the 'general services' aspect in the Consolidated Account to swindle public money."
An economist at the University of Dar es Salaam, who declined to be named due to the sensitivity of the matter, told The Citizen that the loss of funds through the Consolidated Account indicated "a general weakness" in government undertakings.
"Under normal circumstances, any loss above 10 per cent is too much for the Government to bear. There is need to change the system as we can�t go on this way," he said.
According to him, every shilling in public coffers should be budgeted and accounted for in accordance with the Government's laid down priorities.
"It is quite impossible to record such a big percentage of loss while we have a lot of priority areas to implement,"he said.
The two economists said the current management of the account provided a loophole that some officials could use to divert the funds for their personal benefit.
Losses incurred through the Consolidated Account rose from Sh2.3 billion in fiscal year 2006/07 to Sh3.5 billion in 2007/2008, a 52 per cent increase.
"This situation should not be accepted. Therefore, all efforts should be exerted to substantially reduce or reverse this situation," said CAG report.
The minister for Finance and Economic Affairs, Mr Mustafa Mkulo, told The Citizen on Thursday that he could not comment as he was just returning from a trip abroad. He then referred us to the Permanent Secretary, Mr Ramadhan Kijjah.
The minister added: "I cannot comment as I have been away from the office, and, you never know, may be my colleagues have already worked on the matter." Mr Kijjah could not be reached on his mobile phone.
Efforts to reach the deputy minister, Mr Omar Yussuf Mzee, also failed. And the CAG report urges the government to take appropriate steps to strengthen its internal controls to tame the raising losses of government money and stores.
"This is an alarming situation calling for an urgent need to rectify the situation," cautioned the CAG in his report.
The statement of consolidated commitments reflected expenditure of Sh289.3 billion as at the end of June 2008 an increase of Sh157.5 billion or more than 100 per cent compared to amount spent in 2006/2007 of Sh131.8 billion.
The CAG report also noted that some cases of commitments were made in the absence of contractual obligation contrary to Regulation 85 of the public finance Act of year 2001 as revised in 2004.
Commitments not supported by contracts may lead to deferring expenditures which could have been charged to the respective financial year, the report notes.
The CAG said that the increase in loses calls for the attention of the government to institute controls over its commitments. Moreover, the CAG said the situation almost puts into mockery the government's approved annual budget. Additional reporting by Samuel Kamndaya
