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Well, Unanswered questions:

Discussion in 'Habari na Hoja mchanganyiko' started by Mzee Mwanakijiji, Sep 29, 2008.

  1. Mzee Mwanakijiji

    Mzee Mwanakijiji Platinum Member

    Sep 29, 2008
    Joined: Mar 10, 2006
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    Najua tumepitia pitia mambo ya EPA sasa leo katika kujaribu kurudi nyuma nimekutana na habari hii kwenye ripoti ya Mkaguzi Mkuu. Nilishaipitia huko nyuma lakini leo nimeisoma tena na kuanza kukutana na maswali ambayo sijui kama tunajua majibu yake. Hilo jambo la pili nitaawaachia watu wengine (usikose Cheche) la wiki ijayo.

    3.1.2 Bank of Tanzania

    (i) Claims on Government External Payment Arrears - NBC (EPA)Shs.131,725,294,000. The balance on NBC – EPA Account represents losses on exchange rate differentials between the exchange rate ruling when the funds were initially deposited with the National Bank of Commence
    (NBC) and exchange rate prevailing when the beneficiaries are paid. The exchange losses are recoverable from the Government. However, as the
    Government could not in the short term raise the required levels of local currency (TZS) to Office of the Controller and Auditor General PA&oBs 2006/2007 40 compensate the Bank for the losses, it has converted
    the losses into EPA stock to be held by the Bank.

    The Bank maintains two ledger accounts; one is to source part of the required payment of the original deposits and the other (EPA Losses in Exchange – NBC Account) is to source the difference of amounts which arose from the exchange rates differentials.

    We noted that the NBC External Payment Arrears Special Deposit (TZS) Account closed with a balance of Shs.2,288,418,663.41 as at 30th June 2006 and total payments of Shs.4,227,632,787.60 were made during the
    year. On the other hand, the total EPA Losses in Exchange – NBC was Shs.131,725,294,000. (kiasi kwa yale ya makampuni 22)

    Clause 4.2.1 of the BOT Debt Management Operations and Procedures Manual, 1997 require that, a beneficiary claimant (debt assignee) shall apply to the Bank of Tanzania, identifying a debt being claimed with all necessary particulars. An assignee claimant must also produce a legally binding Deed of Assignment from the respective creditor.

    We noted that, the claims were supported with application letters attached with Deeds of Assignments and other relevant particulars but were not supported with the supplier’s original documents such as invoices, bills of lading and letters of credit. In addition the claims were not pre-audited by the Internal Audit Directorate before effecting payments.

    In the absence of the supplier’s original documents in support of the debts, we are of the view that the debt assignment may not be complete and can raise problems in case of disputes that may arise.

    (ii) Excessive Legal fees Paid
    Further to earlier payment of legal fees of Shs.2,990,221,907 made in the previous year to M/s Mkono and Company Advocates, the lawyers handling the Valambhia case, an additional amount of Shs.5,138,153,330 was paid during the year, almost twice as much as the amount paid in the previous year, making total payments of Shs.8,128,375,237 as at 30th June 2006.
    The contingent liability to the Government regarding this case is about Shs.60 billion. Considering the fact that neither the outcome nor the time frame the case will take is known, there is a danger that the Bank may endup
    paying excessively high legal fees on the case.

    My Take:
    - What on earth is going on?