18 April 2017

Tanzania: CAG - ALAT Misused 523 Million/ - Investment Fund

The Controller and Auditor General (CAG), Prof Mussa Assad, has uncovered misappropriations of Investment Fund of over 523m/- by the Association of Local Government Authorities of Tanzania (ALAT).

He indicated that in his Central Government annual general report of 2015/16 financial year that ALAT Annual General Meeting (AGM) held in Singida Region between August 28 and 29, 2009 passed a resolution regarding construction of an investment building in Dodoma.

During the meeting, he said, an Investment Draft policy 2009 was tabled and approved by the meeting, where members, were directed to contribute funds totaling 6.5bn/- for the period of 2009/10 to 2011/12 for such investment. "Up to January 29, 2016 a total of 525,717,522/-was collected from various members.

It was noted that ALAT spent a total of 523,929,676/06 between June 16, 2012 to March 22, 2013 without the consent or authority of the Annual General Meeting or Executive Committee," the CAG noted.

According to his report, a total of 76,000,400/- was spent for daily operations of the entity, while a sum of 80m/- was deposited to the fixed deposits account at Banc ABC for one year from January 29, 2016 at an interest rate of 12 percent per annum.

Prof Assad noted further that while 367,929,276/06 was not supported by any evidence regarding its use, he said that the balance that remained in the bank account as of March 11, 2016, was only 1,787,845/94.

"Use of funds out of the intended objectives indicates inadequate financial indiscipline and may attract embezzlements of public funds," the CAG cautioned.

He, therefore, advised the management of ALAT to ensure that investment fund is spent strictly for its intended purpose or else approval from Annual General Meeting or Executive Committee should be sought before use or investing. In addition, he suggested, the management should ensure that expenditure particulars are always kept and made available when needed.

The CAG was of the view also that the authority responsible for investigation should make follow up on existence of the investment fund. The Association of Local Government Authorities of Tanzania (ALAT) is the national local government association, whose role is to promote and sustain the goals and ideals of decentralization.

Such association was established on December 13, 1984, following the re-establishment of the Local Government System which had been abolished in 1972.

The goals of ALAT are to foster and promote smooth Local Government development in Tanzania, to maintain and further the rights, interests and values of Local Government Authorities and to represent the Authorities of Tanzania in the International Union of Local Authorities and other international forums.

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