There’s significant change of audit opinions this year as compared

05May 2021
Daniel Semberya
Dar es Salaam
The Guardian
There’s significant change of audit opinions this year as compared
  • to the past, Utouh says

FORMER Controller and Auditor General (CAG) Ludovick Utouh has advised the government to devise a mechanism to increase the rate of implementation of recommendations by oversight institutions to promote accountability.

FORMER Controller and Auditor General (CAG) Ludovick Utouh.

Utouh made the advice when speaking when analyzing the 2019/2020 CAG’s Report titled: Current financial accountability trends in Tanzania, over the weekend in Dar es Salaam during Policy Forum’s Breakfast Debate.

He said the rate of implementations of recommendations by CAG and parliamentary accounts committee has been low.

Utouh, who is now the executive director of WAJIBU - Institute of Public Accountability said that there was a significant change of audit opinions issued this year compared to the previous one.

The ex-CAG noted that there was a significant increase in the number of local government authorities (LGAs) with qualified and adverse audit opinions which is an indication that there are some challenges being faced by accountants in complying with the required framework for the preparations of the financial statements.

For instance, he said that in 2018/2019 the qualified opinions were 9 and the adverse opinion was zero, while in this year’s report, 2019/2020, the qualified opinions have shot up to 53, and the adverse opinions have risen to eight respectively.

“What we would like to say that these things go back to our education system. We are educating people. Our accountants are graduating but we are not sure whether they are adequately impacted with the practical understandings of how to make use of these international standards in the preparations of these financial reports,” he said.

He, therefore, suggested that the remedies to this challenge included: To continue training these accountants on the International Public Sector Accounting Standards (IPSAs) and International Financial Reporting Standards (IFRS), taking into consideration that these standards were not static.

He said the public sector appointing authority of the Accountants should adapt to the use of the carrot and stick approach in enforcing the application of the IPSASs and IFRSs in preparing financial statements.

According to him, failure to do so, there would be a risk of misleading users of the financial statements of the LGAs due to non-adherence to financial reporting framework (IPSASs), and misstatement of the amounts presented in the financial statements.

The Government should come up with a mechanism of ensuring that there is an increased rate of implementation of both the CAG’s and Parliamentary Oversight Committee’s recommendations.

Why? Because these recommendations are aiming at improving the operations of the audited reports and not anything else!

Another area where the government was not doing very well according to the CAG was budget execution. Last year the collection by the government amounted to 95 percent of the approved budget.

According to the CAG report, there was “Under-release of 46 percent of the approved budget for capital development grants in the financial year 2019/20.

About 410.4bn/- out of 890.3bn/- was not released to 152 LGAs, and 73 LGAs received less than 46 percent of the approved development grants.

If the budget execution was properly supervised, you can’t get the logic of having a disbursement for development projects to a tune of 46 percent.

According to the CAG’’s report, there were more than 266 uncompleted development projects with a value of 184bn/- from 101 LGAs.

“This may cause the increase of total project costs due to inflation,” he said.

Again there were a total of 55 development projects with a value of 10.6bn/- from 26 LGAs were not implemented despite having the funds for implementation of the projects in respective LGAs.

“That one does not match the 5 percent! There is something amiss on how we manage our whole budget operations.”

The bad thing indicated in the CAG report is that there were completed projects but not in use:

More than 68 completed development projects with a value of 18.3bn/- from 40 LGAs in the 2019/20 fiscal year were completed but not in use in health, water, education, agriculture, and other sectors.

For example Building of Bukoba District Hospital amounting to 1.80bn/-.

This may cause risk in the deterioration of the project but also denies the rights for citizens to access social services.

To address these challenges, he has urged the government to involve citizens in the implementation of development projects and own them.

He further said that according to the CAG report a big amount of collected revenue was not remitted to the consolidated fund, as it is required in Article 135 of the Constitution of the United Republic of Tanzania of 1977.

He said the Fifth Phase Government introduced the system of paying all collected government funds to be channeled to the central account through the control number, which was literally an implementation of the constitution’s requirement.

But in spite of the government coming up with a policy of a single account of collecting revenue, still, there were still a substantial amount of money collected not submitted to the consolidated fund.

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