Annual general report of the controller and - Parliament of Tanzania

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6.5 Specific Findings and Recommendations 6.5.1 Operation anomalies of Tanzania Electric Supply Company Ltd Audit review of TANESCO performance on power supplies system for the year ended 31 st December, 2007, disclosed the following summarized weaknesses which needs to be addressed to improve the performance. • Revenue generated by TANESCO is being retained by Songas Limited for future investment, the total amount retained up to 31 December 2007 was Shs 5 billion. However going concern of Songas is in question as it recorded after tax loss of USD 4,935. • As per the Songas power purchase agreement, TANESCO has the right and hence was to review all the initial Songas project costs to confirm that the project costs were as provided by Songas. This finalization of project costs is still pending meanwhile TANESCO continues to pay to Songas capacity charges based on the original stated Songas project costs. This constitutes a major concern in decision making since these initial project costs form the basis of approximately US$ 5 million monthly capacity charges that continues to significantly cripple TANESCO’s liquidity. • RICHMOND Development Company was advanced with USD 30,696,598 being 35% of rental income to facilitate the opening of the Letter of Credit with the commercial bank. The recoveries of the money could take 24 months. From November 2007 the total amount recovered so far is USD 7,674,186 resulting into an outstanding balance of USD 23,022,412. However we have been informed that the contract between • TANESCO and the successor of RICHMOND M/S DOWANS ceased on 1 August 2008 before TANESCO had fully recovered the balance. TANESCO profitability for over six years has collapsed as the payments to just two Independent Power Producers ___________________________________________________________ Office of the Controller and Auditor General PA&oBs 2007/08 108
– IPTL and Songas accounted for about 90% of TANESCO revenues. 6.5.2 Noted Anomalies on Water Supplies Sector It has been noted that, large part of the Water and Sewerage Authorities uses the old distribution networks, this leads to significant divergence from the average industry unaccounted water level, illegal connection, experience inconveniences in billing and collection system and below the industry average revenue per shilling spent on electricity as explained below:- • Indequate Revenue from Water and Below Average Revenue per shilling spent on power Unaccounted for water at DUWASA is 40%, this is above industrial average which stands at 31.8% and, electricity expenses at DUWASA are above industry average, consequently revenue per 1 Shs. spent on electricity is below industry average. Management should strive to control electricity expense. The Authority revenue has increased by 1% while its expenditure has increased by 14% from last financial year. • Metered Customer, Water Billing and Revenue The Billing system at TAWASA is open to every staff of the section from senior to junior staff whom cannot pass entries for amendment of bills. Further, most of the amendments made, lack proper supportive documents and authorization such as customers’ written complaints approved by the Managing Director or any other officer delegated by the Managing Director to do so, and some customers are not metered. This could make it difficult to hold any one responsible incase of embezzlement of revenue by unscrupulous employees. It is recommended that, all adjustment of bills should be supported by written complaints from the customers and be authorized by the Managing Director or the Business Manager jointly with the Finance Manager on his behalf. ___________________________________________________________ Office of the Controller and Auditor General PA&oBs 2007/08 109
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ANNUAL GENERAL REPORT OF THE CONTRO
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Office of the Controller and Audito
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CHAPTER NINE ......................
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GTEA General Tyre East Africa HRM H
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TR Treasury Registrar TRA Tanzania
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Lastly, I would like to thank staff
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for the maintenance of a compliant
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PA & oBs Unqualified opinion Unqual
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and effective delivery of community
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year 2007/2008 the Office of the Co
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CHAPTER ONE BACKGROUND AND GENERAL
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• Preventing or minimizing the un
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1.3 Responsibilities of the Board o
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singly or jointly did the audit of
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CHAPTER TWO BASIS AND TREND OF AUDI
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addition of such an emphasis of mat
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General to access all records, book
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It is important to note that an unq
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From the above analysis, it is evid
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49. National Institute for Producti
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-- The computer hardware and softwa
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epayable after six months. The agre
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4. Tabora Urban Water Supply and Se
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was carried out by ‘The Solomon C
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2. PresidentialParastatal Sector Re
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een reconciled by DUWASA and theref
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4 Tanzania Standard Newspaper (TSN)
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summary total of invoices issued to
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6. Tanzania Communi cation Regulato
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monthly reports as required by sect
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independently as required by sectio
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TANAPA obtained from the Exim Bank
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8. Tanzania Post Corporation 9. Ins
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Procurement Notice as required by R
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11 Muhimbili University of Health a
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Water Supply and Sewarage Authority
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elating to prior years interest cha
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CHAPTER THREE SUMMARY OF THE PREVIO
Page 77 and 78: 2. 10.2 Weak Information Technology
Page 79 and 80: eporting directly to the Chief Exec
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Page 87 and 88: y the liabilities imposed by variou
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Page 91 and 92: while the Board of External Trade f
Page 93 and 94: 3.2.2 National Insurance Corporatio
Page 95 and 96: Kagera Sugar Company Ltd General Ty
Page 97 and 98: Emunio Tanzania Limited Kiwira Coal
Page 99 and 100: guaranteed 75% by the government an
Page 101 and 102: 4.0 Introduction CHAPTER FOUR EXPEN
Page 103 and 104: 4.1.3 Questionable payments (i) Nat
Page 105 and 106: The above certificate was in favour
Page 107 and 108: (iii) Tanzania Engineering and Mech
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Page 111 and 112: Customer Meter No. Date connected F
Page 113 and 114: Date Number of visitors per TANAPA
Page 115 and 116: Loss of Potential Revenues from Pri
Page 117 and 118: CHAPTER FIVE INTERNAL CONTROL SYSTE
Page 119 and 120: prepared (NBC A/C No. 022103000156
Page 121 and 122: 5.6 Lack of segregation of duties.
Page 123 and 124: monthly basis to do a reconciliatio
Page 125 and 126: CHAPTER SIX PERFORMANCE REVIEW 6.0
Page 127: From the table above, the operation
Page 131 and 132: Key performance targets not achieve
Page 133 and 134: failing to effectively and efficien
Page 135 and 136: SN Donor Year of deposit Amount 1.
Page 137 and 138: anger post 10 TANESCO Electricity c
Page 139 and 140: aired without raising Broadcasting
Page 141 and 142: 6.13.2 National Development Corpora
Page 143 and 144: CHAPTER SEVEN COMPLIANCE WITH PROCU
Page 145 and 146: of appropriate procurement methods
Page 147 and 148: evaluation committee to the tender
Page 149 and 150: A review of the tendering procedure
Page 151 and 152: Dodoma (2 sites ) 10 Singida (2 sit
Page 153 and 154: TANAPA. Furthermore, there was no e
Page 155 and 156: VAT). How the Joint venture came ab
Page 157 and 158: CHAPTER EIGHT CONTRACT MANAGEMENT 8
Page 159 and 160: 3. Unjustified Single source 4. Lac
Page 161 and 162: Property Market Consult -TZS. 107,9
Page 163 and 164: Item Old rate (Shs) New rate (Shs)
Page 165 and 166: Furthermore, throughout the period
Page 167 and 168: sub-contractor or agents; and the c
Page 169 and 170: • A further invoice No. 402706 fr
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Page 173 and 174: The original contract price with Gr
Page 175 and 176: of the project and not responding t
Page 177 and 178: (a) Tender Evaluation Documents We
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(i) Selling price for the entire pr
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alance (i.e. 90% of selling price)
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payment of the purchase price, whic
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a building. However, the following
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9.0 Introduction CHAPTER NINE ASSET
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No periodic physical verification e
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Lack of motor vehicles registration
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Registrar through his letter with r
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gone in dispute which has not been
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of the Authority by the then Presid
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undertake various activities and th
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9.9 Un-recovered Loans and Advances
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committed by TPB Staff during the p
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have invested the amount in other v
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3.7 Millions (2006) loan 9. Kiwira
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een executed and availed as support
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Tanzania Posts Corporation is an ag
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10.0 Introduction CHAPTER TEN HUMAN
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employees. The appraising system he
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without employment contract contrar
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to a lower rank, status and pay whi
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10.8 Accumulation of annual leave b
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11.0 Introduction CHAPTER ELEVEN CO
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Dar es Salaam City Council since th
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allowances varies from one organiza
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11.3 Parliamentarians serving as Di
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make final decisions to an autonomo
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CHAPTER TWELVE RESULTS OF PRIVATIZA
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12.1.1 Public Authorities and other
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Shs.85,905,745,060 being paid up sh
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total potential of paid up share ca
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alances as at 31 st December, 2007
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CHAPTER THIRTEEN RESULTS OF SPECIAL
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from the existing training arrangem
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evidenced by fuel adulteration whic
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esult of stock taking exercise as a
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CHAPTER FOURTEEN CONCLUSIONS AND RE
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Recommendation • The Board of Dir
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• No monthly bank reconciliations
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advertisement should be aired witho
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Office building at BoT and take app
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• The Government should enter int
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e based upon the interests of consu
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• There is an ambiguity in the ro
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in terms of likelihood of occurrenc
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14. for Universities Tanzania Commu
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28. Government Employees Provident
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9. Mzumbe University 10. University
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Annexure 2 Audits Public Authoritie
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Wildlife Research Institute (TAWIRI
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3. Kigoma/Ujiji Urban water Suppy a
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Higher learning institutions and Co
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