Do Audit Reports Effect Financial Discipline, Integrity and Accountability? - August 2011
Proper financial management and accountability over public funds is a central component
of good governance. Public funds are intended to be used effectively and efficiently to
ensure that citizens are receiving the quality services for which public funds have been
allocated. Clearly evidenced by the Controller and Auditor General (CAG)’s annual audit
reports from 1999-2010, a major challenge for Tanzania is currently the poor financial
management of public institutions.
The office of the CAG was established under Article 143, subsection (5), of the
Constitution of the United Republic of Tanzania 1977 (revised 2005) and Section 10 (1)
of the Public Audit Act No. 11 of 2008, to oversee the accounts of the government and
other public bodies, which include the Ministry of Health and Social Welfare (MoHSW).
In the audit reports, the CAG normally presents findings regarding the financial
statements of the entity and provides recommendations to improve the management of
Of importance to note is the fact that the auditing exercise is carried out using public
funds to see whether other public funds are managed well. To serve the intended purpose
of this exercise, the results have to be taken seriously and proper measures by both
executive and parliament have to be taken to reduce the abuse and misuse of public finds.
This report analyzes audit reports for the Ministry of Health and Social Welfare
(MoHSW) from 1999 to 2010 to see whether the auditing by the CAG and Parliamentary
reviews have had effect on the Ministry’s financial management.
There has been an unsteady progress by the MoHSW working on the issues that are
raised by the CAG. For instance, from 2007 to 2009, sums of 10 billion, 4 billion and 0.5
billion shilling were queried, respectively. This positive trend has been thwarted in 2010
due to 21 billion shilling questioned by the CAG.
Thus, we note that the CAG has been raising serious concerns with regard to the misuse
and abuse of public funds. But, unfortunately, his findings have not received adequate
attention by the accounting officers1 (in MoHSW’s case, the Permanent Secretary) and,
as a result, similar queries are recurring annually.
Equally important is the need for the three parliamentary financial oversight committees
and the Committee for Social Services to be strengthened to ensure that all queries which
are raised by the CAG are acted upon. This would allow the previously registered
achievements to be sustained and to rehabilitate the financial performance of the
MoHSW and all other MDAs and local authorities.
Development Partners (DPs) also have a role to play in terms of ensuring proper use of
financial resources since their contribution to the government’s budget is significant. For
example, between 2001 and 2009, Development Partners have channelled approximately USD 523 million (about 670 billion shilling) through the Health Basket Fund to the health sector.2 In the same period (2001 and 2009), the queries directed to the MoHSW alone amount to USD 109 million (142 billion shilling) which is equivalent to more than
1/5 of all donor-financed expenditures.