Audit: Opposition, CCM are one and the same

CCM Mainland sub-head offices in Dar es Salaam. One of the reforms the party is working on is transparency in the management of its assets. The 2015/16 report reveals bad financial and asset management by political parties. PHOTO I FILE  

What you need to know:

Both the ruling party CCM and opposition establishments have been found wanting in the manner in which they manage their finances and general assets in the latest CAG report. The annual report was released in Parliament a little over a week ago.

Dar es Salaam. Concerned about the lack of tight control of funds within political parties, the Controller and Auditor General (CAG) has tabled a raft of measures that he believes can fill some major loopholes that for long could have been a key source of dirty money for a well-connected few.

Both the ruling party CCM and opposition establishments have been found wanting in the manner in which they manage their finances and general assets in the latest CAG report. The annual report was released in Parliament a little over a week ago.

Prof Mussa Assad, the CAG, revealed that on matters financial, political parties are blatantly defying the Political Parties Act of 1992, which clearly states how they are supposed to manage their finances.

It’s not the first time that the National Audit Office raises concerns about the lack of financial accountability. Last year, the CAG report also highlighted similar loopholes.

Apparently, nothing much has been done to address them, and as the regulatory authority, the Registrar of Political Parties faces criticism for turning a blind eye to the irregularities.

And a good portion of the money that the political parties are being accused of not managing well are public funds – subventions from the government.

Registered parties that participated in the immediate past election and have at least one of their candidates elected, can get subvention from the government, according to the current law.

Sources of funds for political parties can also be member fees, voluntary contributions, income from party investments and donations, as stipulated by the Political Parties Act.

While the 2015/16 audit report did not include financial statements from major opposition political parties Chadema, Civic United Front (CUF) and NCCR Mageuzi due to various reasons, audited accounts of 19 others, including CCM and ACT-Wazalendo, exposed questionable management of revenue and expenditure. Prof Assad noted that the parties were failing to maintain elementary books of accounts, such as trial balances, cash books, individual ledger accounts and general ledgers, which are important documents in the preparation and presentation of financial statements.

The CAG expressed concerns over the lack of competent people in the parties’ finance departments. He noted that staff members were incapable of managing funds and professionally advising management regarding planning, policy and capital investment.

For example, according to Prof Assad, the incompetence of accounts people is revealed in their submission of financial statements with value of land and buildings on the same sheet, contrary to stipulations of the International Accounting Standards (IAS), which recognise land as a property whose value increased gradually.

“Failure to recognise value of land that has appreciating nature is highly understating the party’s accounting books, resulting in the false presentation of financial position,” reads part of the CAG report.

The CAG suggests that some of these problems could be tackled if political parties had accountable secretary generals whose targets are clearly spelt out in employment contracts, as opposed to the current scenario where they function as volunteers.

Among the 19 audited political parties are ACT-Wazalendo, Alliance for Tanzania Farmers Party, Tanzania Democratic Alliance (Tadea), Chama cha Kijamii, Alliance for Tanzania Democratic Change, Democratic Party, Demokrasia Makini, Chama cha Sauti ya Umma (SAU),National League for Democracy and United Democratic Party.

National Reconstruction Party (NRA), United People’s Democratic Party (UPDP)), Party for People’s Redemption (Chaumma) and Union for Multiparty Democracy (UMD) did not submit their annual financial statements, contrary to Section 14 (1) (i) of Political Parties Act of 1992.

Other parties – Demokrasia Makini, Chama cha Kijamii and Alliance for Democratic Change (ADC) – did not maintain bank accounts at all.

CCM branches of Kinondoni, Ilala and Temeke; the women, parents and youth wings; its mouthpiece Uhuru Publication and People’s Media Communications Limited (PMCL) operated without counterfoils – part of a cheque, receipt, ticket, or other document that is torn off and kept as a record by the person or office issuing it.

Without the counterfoils, members can use cheque and receipt books for their personal benefit.

Some parties were also found to have no updated asset registers, a situation that members can easily manipulate to abuse party property.

There have also been concerns that the lack of tight controls within political parties provides fertile ground for corruption.

In the ruling party, one of the measures that President John Magufuli took to reform CCM structures and operations was to plug loopholes that were suspected to be channels of corruption.

Even before he assumed the CCM chairmanship last year, President Magufuli criticised the party over corruption and complacency, promising reforms once he is elected its chairman.

And as he took over the office from his predecessor, former President Jakaya Kikwete, Dr Magufuli decried “rampant corruption” in the party, and alluded to abuse of CCM assets by senior members at the various levels in the structures of the party.

The CCM chairman said he would work to ensure that party assets are not abused by a few individuals. At a ceremony to launch the Dodoma Convention Centre, Mr Kikwete also noted that the party could use its assets to generate revenue and stop its dependency on donors.

For political parties, both the ruling and opposition, the lack of accountability could be by design, some political analysts say.

Mr Humphrey Polepole, CCM national executive secretary of ideology and publicity, told Political Platform Monday that his party had already started working on rectifying the gray areas noted in the CAG report. “The CAG report is a useful resource... CCM leaders are currently visiting regions to address the irregularities, and ensure they do not appear in the next report.”

Mr Parit Sarun, a political science lecturer at Mwalimu Nyerere Memorial University, says there is a culture of self-aggrandizement within the country’s political parties – and that it’s high time they cleansed themselves.

“They should be serious about cleaning up if they are to have the moral authority of supervising local and central government.”

Dr Hamad Salim, a political analyst at the Open University of Tanzania, says the CAG’s revelations are a no-surprise. But he is quick to point out that it is the parties’ best interest to reform their financial management systems to align them with the CAG recommendations.

The OUT political scientist explains that the ruling party, for example, has valuable assets across the country, but because they have not been properly managed, revenue generated could have been benefiting a few individuals within the party.

It will also help institutionalise political parties, he says.

University of Dar es Salaam (UDSM) political analyst Prof Bakari Mohamed says financial impropriety is a trap from which parties are finding it difficult to free themselves.

He blames the situation on politics of patronage. “Most political parties do not have a defined system of leadership.”