PIC wants thorough evaluation of state entities

“In order to prevent shifting the financial load to the newly formed organisation, any bad debts should be eliminated or written off from the accounts of the companies or institutions that are merging,” PIC chairman Deus Sangu told the House yesterday.

This comes as per President Samia Suluhu Hassan’s directive to the office of the Treasury Registrar to merge 19 parastatals into seven.

According to the Treasury registrar, Mr Nehemia Mchechu, the merged parastatals will be made public before the end of this financial year. President Hassan’s directive followed a trend of under-performance and inefficiency in some governmental organisations, which continue to be a drain on government expenditures.

To ensure parastatals contribute to the economy, the PIC has recommended that there be amendments to the Treasury Registrar (Powers and Functions) Act (Cap. 370) to specify the procedure and system for all profitable institutions to legally contribute to the central government fund.

“There are institutions that either do not contribute or contribute less than they should to the central government fund due to the absence of a legal framework and system that obligates them.

He said many institutions and organisations have been found to have limited capital due to the lack of an investment fund and the inability to borrow from financial institutions.

“The government should expedite the process of establishing an investment fund to support well-performing organisations facing capital challenges,” he said.

Moreover, the Parliamentary Public Accounts Standing Committee (PAC) analysis also uncovered huge flaws within parastatals leading to misuse of funds, huge losses, and no-value-for-money operations.

Presenting their reports yesterday, PAC chairman Mr Naghenjwa Kaboyoka said the committee also opines that the flawed management of contracts is an area contributing to significant revenue loss for the government and should be carefully examined.

“The committee has made recommendations concerning the adherence to laws, regulations, and essential guidelines to ensure the true value of public funds used by various government institutions and address the misuse of public funds in their operational activities,” he said.

The PAC issued recommendations to institutions such as the Tanzania Revenue Authority (TRA), which recorded a deficit of over Sh.887.3 billion in revenue, to improve tax collections and management systems for key economic activities.

The committee also advised fast-track debt collections owed to public institutions such as the Minerals Commission, which failed to collect Sh30.7 billion by June 2022, while the Ministry of Natural Resources did not collect nearly $599,000 from hunting tourism.

While by the end of last fiscal year, Tanzania Building Agency (TBA) had recorded debt not collected (receivables) valued at Sh82.23 billion, there is also embezzlement of Sh261.35 million at the Fire and Rescue, while state-owned corporation Tanzania Telecommunications Corporation (TTCL) is owing Sh1.8 billion to unknown customers.

According to Mr Kaboyoka, the committee also noticed that some of the social security funds are burdened by debts, in particular from the government, thus affecting the liquidity of the respective funds.

The recommendations of these two parliamentary committees are based on the analysis of the Controller Auditor General (CAG) reports on central government and public organisations for the fiscal year ending June 30, 2022.