The National Assembly calls for punitive action against the culprits
A cloud of suspicion is hanging over the National Social Security Fund (NSSF), with the National Assembly recommending to the government to task all officials involved in the embezzlement of public funds and occasioning a loss of billions of shillings to the government.
The Parliamentary Public Accounts Committee (PAC) also recommended that the same punitive action be taken against other officials in ministries, departments and other public entities, where the Controller and Auditor General (CAG) uncovered the mismanagement of public funds.
At NSSF, the committee’s assessment of the CAG report exercise ending June 2017 found out that, members’ contributions amounting to 27.1bn/- were likely to be lost due to the management’s decision to invest poorly.
The CAG report discovered that NSSF had invested in seven projects that were not worth investing and were not healthy to members’ contributions. Those projects include the construction of Apollo Hospital in Dar es Salaam, where a contract was signed in September 2014 between NSSF and Apollo Hospital Enterprises Limited, Singapore.
“Until now the project has spent 4.19bn/-. However, when the CAG visited the project site in February, 2018, he found that the area was used for a Dar es Salaam Rapid Transit (DART) project, meaning that to date there is nothing going on despite the money being spent,” said PAC Chairperson Naghenjwa Kaboyoka, when tabling the 2018 working report for his committee.
According to the PAC Chairperson, other projects that occasioned losses to NSSF include the construction of an embassy in Nairobi (77.4bn/), Mkuranga Power Project ($490), a housing project in Keseke and Bugarika in Mwanza Region (1.89bn/-), a Njiro housing project in Arusha (440m/-), Mwandiga Transport Terminal (1.85bn/-), land purchase in Coast and Dar es Salaam regions (15.8bn/-).
Due to blatant disregard for the public procurement legislation, the Parliamentary Committee recommended to the government to investigate into the matter and ensure all officials involved in the misuse of public funds be brought to justice.
The CAG report also uncovered rot in a Suma JKT project for sale of tractors. “During the audit of Suma JKT I noted that there were long-term uncollected receivables from the sale of tractors, spare parts and related implements amounting 40bn/- given to various farmers on credit. There is a high risk of not recovering this amount,’’ noted CAG Prof Mussa Assad in his 2017/18 audit report.
In the recommendations, the Parliamentary Committee said failing to collect debts was against the contract and the government should initiate investigation to identify what had happened and take appropriate legal action as per the contract.
The Police Force is also another institution in the spotlight. The CAG report found out that 888.5m/- was disbursed to people, who were not police officers as ration allowances.
According to Ms Kaboyoka, a police accounting officer was summoned to appear before her committee and he confirmed that four police officers were suspended after they were suspected of being implicated in the scam.
“Our query as a committee is that why haven’t those officers arraigned since 2016, when the payments were made?’’ she queried.
The Parliamentary Committee was also concerned about dilly-dallying in taking legal action against a police officer, who endorsed 798.78m/- to a vendor, who did not offer service he was paid for.
The CAG also uncovered the rot in a joint project between the Police Force and an investor, Mara World Company, in Oyster Bay amounting to $700.
“The first phase of the project was completed by 100 per cent in October 2018. However, President John Magufuli had ordered that the contract be disbanded,’’ she said.
The committee proposed that all officers involved in the malpractices be held accountable in two months effective from yesterday.
In the financial year ending June 2017, the CAG also noted several issues in the implementation of a Tancoal project between National Development Corporation (NDC) and Intra Energy Tanzania Limited (IETL).
The exploration report noted that the exploration cost of 6.58bn/- booked in financial statements was overstated by 880.71m/-. According to the CAG, this was due to the fact that exploration activities ended in 2012 and thus the related expenditure was also expected to end in the same year.
“Thus, the government could neither receive dividend nor collect tax from the company’s profit. It is recommended that, NDC should enhance supervision in the operation of the joint venture to ensure all financial reports are correct and realistic,’’ noted the CAG.
Tancoal also incurred expenditure amounting 940.34m/-, which was not directly related to mining and other operational activities in accordance with the joint venture agreement.
The Parliamentary Committee was also concerned for donations and corporate social responsibility (CSR) contributions overstatement by 917.62m/-. The CAG also discovered improper payment to Intra Energy Corporation (Australia) as management fees amounting 1.47bn/-