CAG report uncovers Sh42bn hole in TTU accounts

Dar es Salaam. The Controller and Auditor General (CAG) has revealed serious financial irregularities in the accounts of the Tanzania Teachers Union (TTU) resulting in unauthorised spending and payments totalling Sh42.07 billion.

The CAG report shows that the Union spent the said amount without supporting documents as the funds were not budgeted or authorised, thus contravening the public procurement procedures.

The CAG special audit of TTU follows the request by the Chief Secretary following reports of allegations of embezzlement by the management between 2011 and 2016.

According to the audit findings, Sh11.924 billion was paid without adequate supporting documents, while Sh3.287 billion was paid without authorisation and Sh26.86 billion was paid outside the Union budget. “The CAG found weaknesses in TTU’s internal control, weaknesses in owning its investments and establishing the Teachers Development Company Limited (TDCL) by using forged documents,” reads the report in part.

The report further reveals that Sh10.27 billion was spent contrary to the financial manual of 2011 and that the authenticity of the payments couldn’t be confirmed.

The CAG notes that Sh1.65 billion paid to teachers and members with different needs, however, the money was not accounted for during the period of review due to insufficient documentations.

The audit also revealed that payments amounted to Sh3.288 billion were made without authorisation of the secretary and the TTU treasury.

The report also unearthed that Sh26.86 billion was used irrespective of services acquired during the period of review contrary to demands of the budget and regulations.

“Spending above approved budget indicates lack of financial discipline that creates loopholes on misusing of the union funds,” reads the report in part.

According to the report, TTU was found with weaknesses in ownership of investments and inappropriate management of Mwalimu Commercial Bank (MCB) and Mwalimu House.

The CAG report further said that TTU lacked documents proving it owns the bank. No documents were available to show it received any revenue since the bank’s establishment and that it owned only 12.94 per cent of shares of own company, therefore lacking majority control.

Furthermore, the report revealed that the Mwalimu House was subcontracted to an unregistered company by the Business Registrations and Licensing Agency (Brela), the Teachers Development Company Limited (TDCL) with registration number 45719.

Instead, the company registered by the government’s agency bearing the said number was the Teachers Development (T) Limited.

However, the CAG says in the report that the company never operated since its establishment.

“From my audit, I am satisfied that the TTU management, the board of trustees, and management of TDCL are part and parcel of the fraud of the member’s collections, fraudulent investments of the Union and mis-management of the Union’s assets for the period under review,” reads the report in part.

Based on the above findings the CAG, recommended strengthening of the TTU internal control, disciplinary and legal action should be taken against officers implicated in the irregularities and that financial oversight committee should be established.