Report on the audit of utilization of funds issued of funds under the catastrophe.

The IMF Executive Board through a Press Release of 10 June 2020, approved debt relief to Tanzania under the Catastrophe Containment and Relief Trust (CCRT), amounting to USD 25.7 million (equivalent to SDR 18,566,777 or TZS 58,800,009,860) from 10 June 2020 to 30 April 2022. The funds were earmarked to fight adverse impacts of the COVID-19 pandemic by improving the public health sector and mitigating the shocks on the balance of payments brought by the pandemic. The IMF Country report to Tanzania No. 20/203, the Fund Press Release and Letter of Intent from Government of URT to the Fund with Ref. No. CMB.445/624/01 dated 27 May 2020 require the Controller and Auditor General to perform post-audit on the CCRT Fund and publish the audit report. In that regard, I structured my audit to include a review of financial transactions, internal controls and operations to the extent considered necessary for the effective performance of the audit to provide assurance on the appropriate utilisation of funds. The following are key audit matters of my report. I confirmed BOT transferred a total of SDR 18,566,777 (USD 25,700,000) equivalent to TZS 60,465,678,582 being the sum of the total facility provided to the government. The noted increment of TZS 1,801,997,721 (from TZS 58,800,009,860 to TZS 60,465,678,582) is a result of depreciation in exchange rate between TZS and strong currencies (SDR and USD). The Government received the funds through Development Revenue Account 9921139901. The Government of the United Republic of Tanzania allocated the facility funds to Health and Tourism Sectors as required in the facility’s conditions. In the Health sector, funds were directed to National Public Health Laboratory (NPHL) to acquire the necessary facilities to enhance the testing of COVID 19 and to establish a center for oxygen production at Benjamin Mkapa Hospital. In the tourism sector funds were directed to provide budget support in terms of salaries, other charges and financing of infrastructure projects to government entities involved directly in the sector which were experiencing a significant loss in revenues due to the pandemic.

I confirmed completeness in transferring and receiving CCRT funds between Treasury, Parent Ministries and Implementing Agencies. I audited the utilization of funds in all Implementing Agencies, for which I reviewed financial transactions, procurement processes and contracts and performed physical verification of assets. The following is the summary of key audit findings and recommendations. Details are reflected in the body of this report. A. Health Sector Lack of contract between MoH and MSD for procured non-catalogue items I noted that items ordered by MoH from MSD for NPHL were non catalogue items. As such, the Ministry was required to have a special contract with MSD to ensure effective execution and supervision of the tender. However, MoH could not provide a specific contract with MSD on the procured items but explained the reliance on the existing general MOU. Recommendation I recommend that the Management of MoH enhance contract management by ensuring the signing of special contracts with MSD whenever specific procurement of non-catalogue items is involved. Weaknesses noted in procurement process of the Contractor for installation, commissioning and training of oxygen medical plant Review of contract No. PA/148/2020-2021/P/26 for the supply, installation, commissioning, and training of oxygen medical plant entered into by Benjamin Mkapa Hospital and Ozcan Kardesler Tip cihazlari Ltd Sti (The Manufacturer), noted that, the management provided two extensions to the contractor without documenting justifiable reason to which extension was requested and granted. This is contrary to Regulation 110(2) of Public Procurement Regulations, 2013. Further, I also noted that respective performance bond and advance payment guarantee were not extended to match the granted time extensions, contrary to the Special Conditions of underlying Contracts.

I recommend that Management ensure in future; (a) Extensions are properly requested by contractors with justification, and Project Managers analyse the mentioned reasons with evidence and correctly determine the time extension to be granted; and (b) Contractors and Suppliers submit extended or new securities to cover the contract extension granted. B. Tourism Sector Inadequate utilisation of development funds As of 17 March 2022, TANAPA and NCAA had unutilised fund balance from development projects of TZS 2,367,536,799 (17%) and TZS 6,124,242,713 (63%) respectively. The challenges were mainly attributed to delays in obtaining approval for reallocation of funds and retendering of tenders. I recommend that Implementing Agencies ensure disbursed funds are utilised for the intended projects and at the right time. Delayed delivery of products and completion of projects I noted the delays in completing construction works in TANAPA, NCAA, and TAWA. Seven projects worth TZS 6,124,242,713.29 in NCAA were not implemented as of 15 March 2022. Construction of NAABI entrance and exit gates was delayed for twenty-seven (27) months in TANAPA. Also, the construction of the Tourism lounge and rest banda by TAWA has been delayed for three and seven months respectively. Further, I noted that TAWA requested GPSA to procure nine (9) vehicles, Toyota Land Cruiser Hard Top-LX at TZS 1,393,819,344.54. Full payment was made on 4 May 2021; however, as of the time of audit on 16 March 2022, four vehicles worth TZS 619,475,264 were yet to be delivered to TAWA. Likewise, I noted that TANAPA deposited TZS 894,539,725 to Tanzania Wildlife Protection Fund (TWPF) account on 30 June 2020 to acquire arms and ammunitions intended to enhance the defence and security of the National Parks. As of 18 March 2022, when the audit was conducted, being twenty-one (21) months since the funds were deposited in the TWPF account, no delivery of arms had been made. Delayed construction and delivery of products in all cases are attributed to the impact of COVID 19 pandemic on suppliers/contractors’ operations.

I recommend that Implementing Agencies liaise with responsible Government institutions to ensure timely delivery of the required products to attain the intended objectives. Challenges noted in the implementation of infrastructural development projects My audit on funds that were disbursed for development projects in the tourism sector mainly to improve tourism infrastructures noted the following weaknesses; inadequate design and specification of projects, implementation of projects without feasibility studies, lack of as-built drawings, inappropriate change management controls and insufficient supervision of projects. The weaknesses were attributed to shortfalls in the management of projects. I recommend that the Management of Implementing Agencies enhance controls to improve the supervision of development projects.

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