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Go for real time audit system to make CAG reports worth it

Saturday April 10 2021
CAG PIC

National carrier has recorded a cumulative loss of Sh153.542 billion in five years even as the State spent Sh1.028 trillion on buying airplanes

By Alex Nelson Malanga

Dar es Salaam. If the country is to contain losses due to poor financial management, analysts yesterday recommended real time audit and reporting, instead of the current system that takes a year - by which time damage had already been done.

Speaking to The Citizen yesterday, the analysts suggested that the management of public institutions should revisit their strategic auditing and reporting systems.

The analysts were reacting to the Controller and Auditor General (CAG) report for the 2019/20 financial year that largely revealed losses and weaknesses of managing development projects and public institutions.

The projects that dominated social media and streets discussions are the Sh153.542 billion Air Tanzania Company Limited (ATCL) recorded as cumulative loss during the past five financial years and the Sh36.9 billion Standard Gauge Railway (SGR) loss due to failure to issue work permits, interest charges and delays in implementing and completing the project.

The list also includes the construction of the Julius Nyerere Hydropower Project (JNHPP) which the CAG criticised for using the outdated 1970 feasibility study.

An economist from the University of Dar es Salaam, Dr Abel Kinyondo, said if the CAG office was to become efficient and help improve governance, there should is no point of waiting for a year to raise those issues because by the time they are raised up, people had already moved on.

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“And, you don’t recover losses by firing someone,” he reminded.

“If you are talking about delays that have been there for some time but you are telling us such important information in a delayed manner, then you have also delayed, that is a problem.”

He further argued that if it (losses/ weaknesses) were pointed out in real time, measures would be taken in real time.

He also said it was high time the country started implementing what the audits were saying.

Based on past experience, the same institutions, same agencies, same ministries have been reported to have committed similar problems year in, year out.

“If the report is coming out, measures need to be put in place not just by firing people, but by putting a mechanism to stop such kinds of rot so that the same is not reported next year,” suggested Dr Kinyondo.

Asked on whether the way the JNHP Project was being handled was economically viable or not, he replied that those questions should have been asked before the start of implementation of the project!

“But now, the only thing we should do is try to ensure that under the existing circumstances the leakages are minimised if not removed at all,” he noted.

The former minister for Energy and Minerals, Prof Sospeter Muhongo, warned that the reliance of hydropower to produce large quantities of electricity would not be sustainable.

“We need to depend on multiple sources of energy. We don’t have to rely on dams, which can become dry anytime,” Prof Muhongo, the rural Musoma lawmaker cautioned in Parliament yesterday.

“Investing in hydropower while expecting to garner profit in return is a misconception because hydropower takes time to start generating profit.”

On the question of ATCL which the CAG report shows its board does not even have a single member who is experienced in aviation, renowned aviation expert and trainer Juma Fimbo suggested that for the national carrier to perform better, there should be no political interference in its decision making.

He expounded that the ATCL management should be empowered for it to do managerial duties and not to be like a foreman.

Mr Fimbo also recommended for the improvement of institutional record by ensuring the board not only consisted of members with aviation background, but also who knew the national carrier in and out.

Furthermore, he added, frequent training to employees should be a priority.

An aviation expert with 46 years of experience, Mr John Njawa, attributed the airline’s loss to underutilisation of their aircraft, saying airplanes meant for long-haul routes were being used for short-haul routes.

“ATCL needs to revisit its strategic business plan,” opined Mr Njawa, ex-Tanzania Civil Aviation Authority (TCAA) safety regulation director.

“The board and management might sit and look at all the things they did wrong and correct the mistakes.”

An aviation expert with a vast experience of nearly 50 years Lawrence Paul called for the government to step in by assisting ATCL financially through cutting down the leasing costs of aircraft for it to breathe.

Since 2015, the government has purchased new eight aircraft consisting of two Boeing 787-8 Dreamliners, two Airbus A220-300 models and four Bombardiers Q400 and leased them to ATCL.

“The aviation industry is in an era which is extremely difficult due to the Covid-19 pandemic. As it is, ATCL needs financial support for it to thrive,” said Mr Paul, the just-retired Tanzania Air Operators Association (Taoa) executive secretary.

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