THE UNITED REPUBLIC OF TANZANIA
NATIONAL AUDIT OFFICE
PERFORMANCE AUDIT ON MANAGEMENT OF PROCUREMENT
OF ICT EQUIPMENT IN PUBLIC SECTOR
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL
OF THE UNITED REPUBLIC OF TANZANIA
March 2013
THE UNITED REPUBLIC OF TANZANIA
NATIONAL AUDIT OFFICE
PERFORMANCE AUDIT ON MANAGEMENT OF PROCUREMENT OF
ICT EQUIPMENT IN PUBLIC SECTOR
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED
REPUBLIC OF TANZANIA
March 2013
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
i
THE UNITED REPUBLIC OF TANZANIA
NATIONAL AUDIT OFFICE
Vision
To be a centre of excellence in public sector auditing
Mission
To provide efficient audit services in order to enhance accountability,
transparency and value for money in the collection and use of public
resources
Our core values
Objectivity
Excellence
Integrity
Peoples Focus
Innovation
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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Table of Contents
List of abbreviations.............................................................v
List of Tables ................................................................... vi
List of Figures .................................................................. vii
Definition of terms............................................................viii
PREFACE ........................................................................ ix
EXECUTIVE SUMMARY .........................................................xi
CHAPTER ONE ................................................................... 1
INTRODUCTION ................................................................. 1
1.1
Background Information ..............................................1
1.2
Indication of the problem.............................................1
1.3
Objective of the Audit.................................................2
1.4
Scope of the audit......................................................2
1.5
Audit design.............................................................3
1.6
Assessment Criteria....................................................3
1.7
Methods of Data Collection...........................................6
1.8
Data validation Process................................................7
1.9
Structure of the Audit Report........................................8
CHAPTER TWO...................................................................9
SYSTEM DESCRIPTION...........................................................9
2.1
Introduction.............................................................9
2.2
Common risks of procurement system.............................10
2.3
Policy, Acts, and regulations related to procurement of
goods....................................................................10
2.4
Different Actors and their roles and responsibilities in
procurement Management...........................................10
2.5
Process Description...................................................17
CHAPTER THREE................................................................22
ASSESMENT OF NEEDS, COST CONTROL AND QUALITY CONTROL.....22
3.1
Introduction............................................................22
3.2
Need Assessment users...............................................22
3.3
Setting of Specifications for ICT equipment......................22
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3.4
Under-utilization of ICT equipment by the PEs..................26
3.5
Cost control for the goods supplied................................27
3.6
Quality control of the supplied ICT equipment..................29
CHAPTER FOUR.................................................................33
MONITORING AND EVALUATION OF PEs PERFORMANCE BY ACCOUNTING
OFFICERS........................................................................33
4.1
Mechanisms for Regular Monitoring of PEs Performance........33
4.2
Monitoring of the distribution of supplied ICT equipment.....34
4.3
Conducting the monitoring of suppliers performance..........35
CHAPTER FIVE..................................................................37
MONITORING AND EVALUATION OF PEFRORMANCE OF PROCUREMENT
SYSTEM BY CENTRALAUTHORITIES...........................................37
5.1
Monitoring the Performance of Procurement System by the
Ministry of Finance....................................................37
5.2
Coordination between MoF and other stakeholders.............40
CHAPTER SIX....................................................................41
CONCLUSIONS...................................................................41
6.1
Establishment of needs and setting of specifications...........41
6.2
Control of costs of ICT equipment among PEs....................41
6.3
Quality control of supplied ICT equipments......................42
6.4
Monitoring and evaluation of PEs performance by Accounting
Officers.................................................................42
6.5
Monitoring and evaluation by the PPD............................43
6.6
Harmonization of roles for various actors.........................43
CHAPTER SEVEN................................................................44
RECOMMENDATIONS............................................................44
7.1
Establishment of needs and specifications........................44
7.2
Control of cost variations over ICT equipments..................45
7.3
Controlling the quality of the items being procured............45
7.4
Monitoring and evaluation of the suppliers’ performance.....45
7.5
Monitoring and evaluation by PPD.................................46
REFERENCE.......................................................................47
APPENDICES......................................................................49
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List of abbreviations
AFROSAI-E
African Organization of English speaking Supreme
Audit Institutions
CAG
Controller and Auditor General
CUIs
Common Use Items and Services
GN
Government Notice
GPSA
Government Procurement Services Agency
ICT
Information and Communication Technology
LPO
Local Purchase Order
M&E
Monitoring and Evaluation
MCST
Ministry of Communication, Science and Technology
MDAs
Ministries, Departments and Agencies
MOIT
Ministry of Industry and Trade
MoF
Ministry of Finance
MoHA
Ministry of Home Affairs
MoHSW
Ministry of Health and Social Welfare
MoW
Ministry of Water
PEs
Procuring Entities
PMU
Procurement Management Unit
PPA
Public Procurement Act
PPD
Public Procurement Policy Division
PPR
Public Procurement Regulation
PPRA
Public Procurement Regulatory Authority
TShs
Tanzanian Shillings
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List of Tables
Page
3.1 Requests for Technical Specifications submitted to the
MCST from PEs .................................................... 23
3.2
3.3
3.4
3.5
3.6
3.7
4.1
4.2
4.3
vi
Variations in Specifications for Laptops .......................
Variations in Specifications for Desktop Computers.........
ICT equipments with different operating system ...........
Price variation for ICT equipments purchased in the same
year ................................................................
Different prices set by the same supplier in different PEs ...
Composition of the appointed inspection committee in
the sampled PEs ..................................................
Issues covered in PEs annual performance reports .........
ICT equipments issued to individuals in bulk ................
Contracts that were delayed by suppliers ....................
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25
26
27
28
31
34
35
36
List of Figures
Page
Figure 1:
Figure 2:
Part of the organisation structure of the Ministry of
Finance that deals with procurement issues ........ 11
The system graph ........................................ 17
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Definition of Terms
1.
ICT equipment
2.
Common use
items
viii
For the Purpose of this Audit ICT equipment
refers to Laptops, desktops, printers
photocopiers and Scanners
These are items which are commonly used
by all procuring entities like stationeries,
furniture’s, photocopy papers, computers,
printers, scanners, etc.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
PREFACE
The Public Audit Act No. 11 of 2008, Section 28 authorizes the Controller
and Auditor General to carry out Performance Audit (Value-for-Money
Audit) for the purposes of establishing the economy, efficiency and
effectiveness of any expenditure or use of resources in the MDAs,
LGAs and Public Authorities and other Bodies which involves enquiring,
examining, investigating and reporting, as deemed necessary under the
circumstances.
I have the honor to submit to His Excellency, the President of the
United Republic of Tanzania, Dr. Jakaya Mrisho Kikwete, and through
him to Parliament, the Performance Audit Report on Management of
Procurement of ICT Equipment in MDAs.
The report contains conclusions and recommendations that directly
concern the Ministry of Finance, the Ministry of Communication, Science
and Technology and the procuring entities.
These ministries have been given the opportunity to scrutinize the factual
contents and comment on the draft report. I wish to acknowledge that
the discussions with the auditees have been very useful and constructive.
My office intends to carry out a follow-up at an appropriate time regarding
actions taken by the auditees in relation to the recommendations in this
report.
In completion of the assignment, the office subjected the report to
the critical reviews of the following experts namely, Mr. Jones Samwel
Mapunda (Procurement Specialist), Mr. Edward B. Makoye (Lecturer
Mzumbe University) and Mr. Roderick Lutembeka (Individual Consultant)),
who came up with useful inputs on improving this report.
This report has been prepared by Ms. Esnath Nicodem, Ms. Levina L.
Kishimba and Ms. Ndyanao Mgweno under the supervision and guidance
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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of Eng. James Pilly and Ms. Wendy Massoy. I would like to thank my staff
for their assistance in the preparation of this report. My thanks should
also be extended to the auditees for their fruitful interactions with my
office.
Ludovick S. L. Utouh
Controller and Auditor General,
Dar es Salaam.
March,2013.
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EXECUTIVE SUMMARY
Introduction
Public procurement has, for a long, been overshadowed with inefficiency
and disregard of fundamental “value for money” considerations. This
has adversely impacted the rate and quality of progress in realizing
the objectives of national development, especially in developing and
transition countries1.
According to the CAG’s report of 2009/2010, 10 MDAs had effected
payments amounting to Tshs. 50.7 billion on procurement of goods and
services that were not within their Annual Procurement Plans. In the same
year, payments amounting to Tshs. 13.9 billion were made in advance to
the suppliers by other 10 MDAs but the goods were not delivered, these
concerns motivated our Office to carry out the performance audit in this
area.
Objective and Scope of the Audit
The objective of the audit was to assess the extent to which the
procurement of goods, specifically on ICT equipment, is monitored
and evaluated by the responsible authorities and whether appropriate
actions were taken to improve the system.
The
audit
focused
on
needs
assessment,
setting
of
specifications, cost and quality control for ICT equipment2
, and monitoring and evaluation by responsible authorities.
The main auditee was Ministry of Finance mainly through its Public
Procurement Policy Division (PPD), which has the overall responsibility of
overseeing public procurement. Other organisations audited were GPSA,
because of their role in public procurement, Ministry of Communication,
Science and Technology as the parent ministry for ICT issues, and four
other ministries, which were selected as a sample of procuring entities.
These were Ministry of Health and Social Welfare, Ministry of Home
Affairs, Ministry of Industry and Trade, and Ministry of Water. The Audit
team used the information covering three financial years, 2009/2010,
2010/2011, and 2011/2012.
1
2
http//www.imctz.com/download/psc_epmps.pdf, cited on 6th October 2012
The ICT equipments that were selected as a focal point in this audit were laptops, printers, scanners and photocopiers.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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Audit Findings
It was found out that establishment of needs by the PEs is not adequately
done as a result PEs purchased more equipment than their actual needs
and ended-up under-utilizing some equipments procured; the Ministry
of Communication, Science and Technology did not develop coordinated
schedule of requirements and specifications for ICT equipments; PEs
did not adhere to price ceiling set by GPSA; PEs were not conducting
inspection of ICT equipments during delivery; PEs’ did not adequately
conduct monitoring of their own performance and the performance of
their suppliers; PPD has failed to prepare the National Procurement
Policy and develop Procurement Standards for Public Bodies within the
planned three years although money allocated for the activity has been
spent; and PPD has never conducted monitoring and evaluation of the
procurement system.
Conclusion
The findings above have led us to conclude that: procurement entities
were not adequately establishing needs and setting specifications for the
purchased ICT equipment; there were significant variations in prices of
ICT equipment which did not always reflect superiority of specifications;
the Ministry of Science has not prepared specifications and schedule
of requirements for use by the procurement entities; the quality of
ICT equipment purchased by the PEs was not adequately controlled;
monitoring of suppliers’ performance was not adequately conducted by
procuring entities; despite being one of their obligations, PPD has not
included monitoring and evaluation of procurement performance among
their priorities for the last three years.
Recommendations
To the Ministry of Finance (regarding the procuring entities):
The Ministry of Finance should ensure that:
1. The PEs properly establish procurement needs by involving the
user departments by considering compatibility with the existing
equipment; and avoiding procurement of equipment beyond the
real needs.
2. The PEs fully utilize the available printers and photocopiers
before planning to purchase additional equipments.
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3. The PEs fully involve experts in the ICT field either from within the
PEs or from the parent ministry (i.e. Ministry of Communication,
Science, and Technology) in setting technical specifications; and
4. Heavy duty printers and photocopiers that PEs have are networked
and shared so that they can be used by more users to fully utilize
their capacities and reduce idle capacity which in the long run
may end up being very costly to PEs.
5. PEs make use of the list of suppliers and recommended price
ceilings provided by GPSA as much as possible in their procurement
undertakings; and
6. Adequate controls are established by the PEs to ensure that the
specifications developed take on board the real needs of the
users to avoid purchasing of unnecessarily expensive equipment.
7. Adequate controls are established to ensure that the Goods
Inspection Committees appointed by the PEs comprise of members
with necessary skills and expertise which match the type of goods
that are being procured; and
8. In all PEs, inspections of the delivered goods are adequately
conducted and reports are prepared and submitted to the
respective authorities to ensure that the purchased items comply
with the desired specifications.
9. All PEs prepare plans for monitoring the suppliers performance
from the contracting stage of the procurement process and during
the implementation phase and identify the resources needed for
the monitoring of the suppliers in place;
10.All PEs adhere to the contract terms when supervising the delivery
of goods; and
11.All PEs periodically prepare and submit reports to PPRA on the
performance of the suppliers in implementing the awarded
contracts. This information should be accessible to other PEs so
as to help them in identifying the suppliers who did not perform
well in their previous assignments and avoid engagements with
non-performing suppliers.
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xiii
To the Ministry of Finance (regarding PPD):
1. The Ministry of Finance should ensure that PPD finalise all the planned
activities. These include:
i.
Preparation of the National Procurement Policy; and
ii.
Developing procurement standards to be used by public bodies
when conducting procurement
2. The Ministry of Finance should also ensure that PPD includes in their
plans and implement the following:
i.
Monitoring and evaluation framework for performance of
procurement system;
ii.
Conducting research and other studies in order to strengthen
procurement and monitor its implementation; and
iii.
Monitoring and evaluation of public procurement institutions.
3. The Ministry of Finance should ensure that PPD utilizes its funds for
implementing the budgeted activities instead of reallocating the
funds to other activities.
To the Ministry of Communication, Science and Technology:
The Ministry of Communication, Science, and Technology should:
1. Update the ICT policy and develop ICT Standards for use by the
PEs; and
2. Prepare schedule of requirements and technical specifications for
various ICT equipments that for use by to all procuring entities to
create uniformity and standardisation.
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CHAPTER ONE
INTRODUCTION
1.1 Background Information
Public procurement has, for a long, been overshadowed with inefficiency
and disregard of fundamental “value for money” considerations. This has
adversely impacted the rate and quality of progress in realizing the objectives
of national development, especially in developing and transition countries3
So far as public procurement has important economic and political
implications, ensuring that the process is economical and efficient is
very crucial. This requires the whole process to be well understood and
properly implemented by all actors (the government, the procuring
entities, and the business community/suppliers) and other stakeholders.
Although Tanzania has taken steps to reform its public procurement
systems huge amounts of resources are wasted.
1.2 Indication of the problem
The
expenditure
of
the
government
of
Tanzania
on
procurement
ranges
between
41%
and
70%4
of its total budget. Currently, the government’s attention, among other
things, has been focused on regulating public procurement. This is due
to the general perception of the wasteful spending by the Ministries,
Departments and Agencies (MDAs) through procurement of works, goods
and services.
Moreover, there are public complaints on overpricing and acquisition of
substandard goods supplied to public bodies . There has been a public
outcry that goods procured in the PEs are of low quality, i.e. they last
for a short period of time as compared to their expected useful life
although their prices are high. Goods have been purchased on the basis
of emergency procurement without justifiable basis for such emergency
procurement. According to the CAG’s report of 2009/2010, 10 MDAs had
effected payments amounting to Tshs. 50.7 billion on procurement of
goods and services that were not within their Annual Procurement Plans.
In the same year, payments amounting to Tshs. 13.9 billion were made
in advance to the suppliers by other 10 MDAs but the goods were not
3
4
http//www.imctz.com/download/psc_epmps.pdf, cited on 6th October 2012
Report of the CAG for the fiscal year 2010/2011
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delivered. These concerns motivated the National Audit Office to carry
out the performance audit in this area.
1.3 Objective of the Audit
The objective of the audit was to assess the extent to which the
procurement process of ICT equipment was monitored and evaluated by
the responsible authorities and whether appropriate actions were taken
to improve the system operation.
Specific Objectives
1. To assess the extent to which the needs assessment, cost,
and quality control for the ICT equipment are properly
implemented
2. To assess the mechanisms for regular monitoring and evaluation
of the PEs and suppliers performance.
3. To assess the extent to which PPD monitors and evaluates the
performance of procurement system and advise on desirable
changes.
1.4 Scope of the audit
The audit looked at how procurement process is managed, by looking
at needs assessment, setting of specifications, quality control for
ICT equipment, and monitoring and evaluation by higher authorities.
The audit focused on the management of the procurement of ICT
equipments mainly laptops, printers (heavy and light duty), scanners
and photocopiers (heavy and light duty).
The main auditee was the Ministry of Finance mainly through its Public
Procurement Policy Division (PPD). Four Ministries were also selected to
illustrate how monitoring of procurement system is done at the level of
PEs. These four ministries were:
• Ministry of Water;
• Ministry of Home Affairs;
• Ministries of Health and Social Welfare;
• Ministry of Industry and Trade;
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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
These four Ministries selected represent
procurement volume of ICT equipment
small volume of procurement. MCST also
four ministries, had an important role to
equipment.
ministries which had large
as well as ministries with
selected in addition to the
play in management of ICT
The Government Procurement Services Agency (GPSA) was selected
because of its role in arranging procurement of common use items and
services (CUIS) by procurement entities through framework agreements
The audit covered three financial years, 2009/2010, 2010/2011, and
2011/2012 because it was enough period to gather information for the
audit.
1.5 Audit design
The audit work was designed by using the questions presented which
were based on monitoring and evaluation at the level of procuring
entities (PEs) and at the level of oversight bodies.
Audit question 1: To what extent are needs assessment analysis,
cost, and quality control of ICT equipment meet
objectives of the PEs?
Audit question 2: Do the PEs have adequate mechanisms for regular
monitoring and evaluation of their own performance
and does it address the underperformance when
appropriate?
Audit question 3: To what extent does the PPD monitor and evaluate
the performance of procuring entities?
A full description of the audit questions and their respective subquestions is provided in Appendix 1.
1.6 Assessment Criteria
Assessments criteria for the audit were as follows:
Audit Question 1: Needs Assessment, Cost Control and Quality
Control for the ICT equipment
Sub-question 1.1
According to Public Procurement Act Section 36(1) of 2004, the user
department of a procuring entity should initiate procurement and
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disposal by tender requirements and forward them to the Procurement
Management Unit.
Public Procurement Regulation (PPR) 60(2) of GN 97, requires the
ministry responsible for matters related to computers and other related
information technology services to prepare detailed and acceptable
schedule of requirements and specifications which shall be made
available to the authority (PPRA) for use by the procuring entities when
procuring such items.
Sub-question 1.2:
• For goods to be procured by the PEs, it is required that the
prices paid by the procuring entity to represent the best value5
. Goods procured are expected to be of satisfactory quality, appropriate
to the public authority requirements, and are compatible with any
other similar goods that were already supplied for compatibility on
usage.
• It is important for the PEs to have mechanisms of controlling costs of
items despite the effect of inflation on prices. PPA 2004, section 45
(c) requires the procuring entity to make use of framework contracts
whenever appropriate to provide efficient and cost effective means
of procuring goods that are used repeatedly over time6.
Sub-question 1.3:
The Accounting Officer, is required appoint Goods Inspection and
Acceptance Committee to inspect the goods to see whether they have
been delivered in accordance with the agreement, and then issue a
certificate when they have been delivered correctly7.
Audit Question 2: Monitoring of entities performance
Sub-question 2.1:
Accounting Officer of the Procuring entity is required to appoint Goods
Inspection and Acceptance Committee with responsibilities of inspecting
the goods , check if the right quantity has been delivered in accordance
with the agreement, and then issue a certificate if goods have been
delivered correctly.8
5
6
7
8
4
PPR 5,GN 97
PPA 2004, section 45 (c ), Procurement Planning.
PPR, GN 97, 2005
PPR(127), GN 97, 2005
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Sub-question 2.2
Public Procurement Regulation (PPR) 122.-(1&2) of GN 97 requires a
procuring entity to obtain reports on the receipt of goods that have
been delivered against contracts and if they are satisfactory, authorize
promptly payment to the supplier. Where receipt of goods is delayed,
or seems likely to be delayed, beyond the time for delivery stated
in the contract, the procuring entity is expected to seek reports and
explanations from the suppliers or their agents and may institute
liquidated damages/charges as may be provided for in the contract.
Sub-Question 2.3
Public Procurement Regulation 121.-(1) A procuring entity is to be
responsible for the effective management of any procurement of goods
and is supposed to monitor the timely delivery of goods and services in
the correct quantities and to the quality specified in each contract; and
take or initiate steps to correct or discipline deviations from observance
of contract condition.
Audit Question 3: Monitoring by oversight bodies
Sub-question 3.1:
The Public Procurement Policy Division (PPD) is required to
monitor and report on the performance of the Public Procurement
Systems in Tanzania and advise on desirable changes;9
and also to monitor, evaluate and review Public procurement systems.10
Sub-question 3.2:
The Public Procurement Policy Division is required to analyze public
procurement issues and challenges, advise, provide guidance, and
follow-up on their implementation.11
9
PPA,2004, 7b
10
URT, the functions and organization structure of the ministry of finance (Finance, June 2011)
11
URT, the functions and organization structure of the ministry of finance (Finance, June 2011)
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
5
Sub-question 3.3:
The Public Procurement Policy Division is required to
coordinate
stakeholders
on
issues
related
to
public
sector
procurement
by
harmonizing
public
procurement
systems in the country and monitor their implementation12
(Finance, June 2011).
1.7 Methods of Data Collection
Data was collected by various methods as explained here under;
Interviews
Interviews were conducted with various officials including:
• Ministry of Finance Officials (Public Procurement Policy Division)
to obtain information on how they manage the procurement
system in the country;
• PMU officials, Accounting Officers, end users, and planning units
for getting various information on monitoring and evaluation on
the performance of procurement systems;
• PPRA Officials for seeking information on various issues regarding
procurement performance, Monitoring and evaluation on
performance of procurement system;
• GPSA officials to obtain information regarding arrangement of
procurement of common use items; and
• Officials from the Ministry of Communication and Technology
because they are required to prepare schedule of requirements
and specifications of ICT equipment as per PPR 60 (2);
Documentary Review
Various documents were reviewed in order to obtain information to
answer the audit questions. These include but not limited:
• Annual procurement Plans of PEs for 2009/2010, 2010/2011,
2011/2012;
12
6
URT, the functions and organization structure of the ministry of finance (Finance, June 2011)
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
• Reports showing requests of users for past three financial years
(2009/2010, 2010/2011, 2011/2012);
• Public Procurement Act 2004 & 2011
• Public Procurement Regulation, PPR GN 97.
• Contracts of suppliers of IT equipment for 2009/2010, 2010/2011,
2011/2012;
• PPRA reports, contracts audit reports, and procurement audit
reports of PEs from PPRA-Division of Compliance and Monitoring;
• Annual procurement reports prepared by selected PEs on monthly
basis that are submitted to PPRA for 2009/2010, 2010/2011,
2011/2012;
• Local purchase orders Tender Evaluation reports from PEs, for
2009/2010, 2010/2011, 2011/2012;
• Lists of inspection and acceptance committee members and their
qualifications/cadre;
• Inspection reports;
• Asset Registers of the sampled Ministries;
• Certificates showing that goods have been inspected prior to
payment;
• Schedule of requirements and specifications from PEs;
• Performance reports from Ministry of Finance M & E reports from
MoF and PPRA for 3 financial years; and
• Medium Term expenditure framework of PPD.
1.8 Data validation Process
The Ministry of Finance, through Public Procurement Policy Division
(PPD), the four selected ministries where data were collected,the
Ministry of Communication, Science and Technology, PPRA, and GPSA
were given an opportunity to go through findings of the audit to verify
the correctness of the facts. They confirmed that the information given
in the findings was correct.
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7
1.9 Structure of the Audit Report
The report has seven chapters. Chapter One gives introduction of the
audit report that includes background information, indication of the
problem, audit objectives, audit questions, audit criteria, and methods
of data collections.
Chapter two provides description of the audit area which includes key
players in the audit and their roles in procurement system. Chapter
Three contains audit findings regarding needs assessment, cost control
and quality control by procuring entities whereas Chapter Four contains
findings on the supplier’s performance and Chapter five contains findings
on Monitoring and evaluations by the PPD.
Chapter Six contains conclusions derived from the findings whereas
chapter seven contains recommendations to the various actors in the
procurement system.
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CHAPTER TWO
SYSTEM DESCRIPTION
2.1 Introduction
The aim of this chapter is to give the highlights of the Management
of procurement system on how Monitoring and evaluation is done by
responsible authorities and Procuring Entities. Issues to be covered in
this chapter include responsible actors in management of procurement,
organization structure, policies, acts and regulations in procurement
process, and process description in the procurement system.
Value for money is the core principle underlying procurement in public
sectors. It consists of economic, efficient, and effective use of resources.
Economy in procurement means acquiring the items at the lowest
evaluated price at right quantity, time, and without compromising the
quality. Efficiency in procurement means selection of procurement
process that is consistent with government policy, producing positive
results without delays, and most appropriate to the procurement
objective.
Effectiveness in procurement means goods procured can make the
maximum possible contributions to the planned outcome of the activity.
This requires proper needs assessment, required specifications, diligently
managing the contract, and proper monitoring of procurement activities.
In this stage, one can relate the level of achievements with the planned
outcomes. It is the measure of the extent to which objectives have been
achieved.
Procurement officials are required to ensure that procurement complies
with all relevant accounting requirements, authorities, regulations,
government policies on procurement and other relevant legislations.
Value for money can be achieved in procurement activities by doing the
following;
• Getting an increased level or quality of service at the same cost.
• Avoiding unnecessary purchases.
• Ensuring that user needs are met and not exceeded.
• Keeping the stocks within the required limit
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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2.2 Common risks of procurement system.
There are common procurement related risks as follows;
• Needs assessment;
• Unnecessary purchasing;
• Goods are purchased in an uneconomic quantities;
• Prices do not represent value for money;
• Supplier not delivering the right level of quality;
• Supplier fail to deliver in time;
• Impropriety and fraud; and
• Lack of accountability and transparency.
2.3 Policy, Acts, and regulations related to procurement
of goods
Public Procurement Act of 2004 has been in use since 2005 after regulation
had been set. However the Public Procurement Regulation of 2005, GN
97 also has been used in public procurements. During the audit, we have
made the reference to PPA (2004) and its regulations (2005), AFROSAI
E guideline on performance audit of public procurement, World Bank
guidelines on procurement and other related guidelines.
2.4 Different Actors and their roles and responsibilities in
procurement Management
2.4.1 Ministry of Finance
Ministry of Finance through PPD is responsible for monitoring of
procurement activities in the government. It has the role of monitoring
and evaluating performance of public procurement institutions, link
with government and stakeholders on issues related to public sector
procurement, and monitors the implementations of public procurement
policies. Also, there are two actors which are directly responsible to
Ministry of Finance namely Public Procurement Regulatory Authority
(PPRA) and Government Procurement Services Agency (GPSA).
The Ministry of Finance has two parts namely Economic Management
and Treasury Services. It is headed by the Permanent Secretary and
Two Deputy Permanent Secretaries. The focus was on that part of the
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organisation structure which is responsible for handling issues related to
public procurement.
The ministry has departments and agencies which deal with procurement
activities in the country. The Ministry is organized as follows:
Permanent Secretary
Deputy permanent
secretary (Public financial
management reform)
Public Procurement
Regulatory Authority
(PPRA)
Government
Procurement Services
Agency (GPSA)
Commissioner
Public procurement policy division (PPD)
Assistant commissioner
Assistant commissioner
(Policy development)
(Capacity development)
Figure 1:
Part of the Organisation Structure of Ministry of Finance
that deals with Procurement issues
According to the organisation structure of the Ministry of Finance 2009,
the ministry through Public Procurement Policy Department (PPD) is
responsible for monitoring and evaluation of performance of government
procurement entities, link with government and stakeholders on issues
related to public sector procurement, and monitor the implementations
of public procurement policies. Main functions of the Division are as
follows:
• Develop a national Procurement Policy;
• Monitor and Implement Public Procurement Policy;
• Advise Central Government, Local Government and Statutory bodies
on issues related to procurement policies;
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11
• Monitor, evaluate, and review public procurement systems; and
• Monitor and evaluate performance of government procurement
entities.
Public Procurement Policy Unit was established in November 2008 and it
was called Public Policy unit. In July 2009, the unit had officially started
with an appointment of Director who was under the budget of stock
verification division. The objective of the unit was to provide service in
the development and review of policy, law, regulations, and guidelines
in procurement and oversee their implementation13. Its major roles
were as follows:
•
To develop, review, follow up, and evaluate the implementation
of Public Procurement Policies, Acts, regulations, guidelines, and
circulars, and to facilitate establishment of procurement cadre;
•
To carry out studies to identify areas required to strengthen
procurement and monitor their implementation;
•
Prepare projection on human resources needs from the procurement
and supplies cadre and supplies staff ;
•
Develop and maintain an update inventory of procurement staff;
•
Liaise with training institution for career development programme
for procurement and supplies cadre;
•
To develop career structure and succession plan for Procurement;
•
To develop and update inventory of procurement cadre; and
•
To develop advisory mechanisms that will assist in establishment and
maintenance of the public procurement policy.
In June, 2011, the new organisation structure was approved again by
the President. At this time, the division was called Public Procurement
Policy Division and had, up to date, two sections; Policy development
section and Capacity development Section. The objective of the division
was to provide expertise and services in the development and review of
policy, law, regulation, and guidelines in procurement and oversee their
implementations. Its functions were defined as follows:
• To develop, monitor, and evaluate and review the implementation of
Public Procurement Policies, acts, regulations, guidelines, standards,
and circulars;
13
12
President’s Office, Public Service Management, The Proposed Functions and Organisation Structure of the Ministry of Finance and Economic Affairs (For PIC Submission), June, 2009, page 54.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
• Monitor, evaluate and review public procurement system;
• To manage and monitor public procurement cadre;
• Study and mainstream public procurement practices;
• Conduct research and other studies on public procurement and
advise;
• Harmonise public procurement systems in the country and monitor
their implementations; and
• Monitor the performance of public procurement institutions.
2.4.2. Public Procurement Regulatory Authority (PPRA)
The Public Procurement Regulatory Authority (PPRA) is a regulatory
body established under the Public Procurement Act CAP 410 of 2004.The
Authority is charged with regulatory functions and vested with oversight
powers and responsibilities on all public procurement activities carried
out by all public bodies in Tanzania. The functions of the Authority are
as follows:
• To monitor and report on the performance of the public procurement
systems in Tanzania and advise on desirable changes;
• Advise the Government, local government, authorities and statutory
bodies on procurement principles and practices;
• To administer and enforce compliance on procurement processes
with the provisions of the act, regulations, and guidelines issued
under procurement act; and
• Monitor and report on the performance of the public procurement
systems in the United Republic of Tanzania and advice on desirable
changes.
The Public Procurement Regulatory Authority (PPRA) conducts
monitoring of compliance of procuring entities. Therefore, it produces
annual performance evaluation reports which shows performance of
procuring entities. In these reports, they conduct procurement audits in
the procuring entities. These audits have 13 key performance indicators
namely:
• Establishment and composition of tender boards;
• Establishment and composition of PMUs;
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13
• Independence of Functions;
• Annual Procurement Plan;
• Compulsory Approvals;
• Advertisement of bid opportunities;
• Publication of awards;
• Time for preparations of bids;
• Methods of procurements
• Use of standard tender documents;
• Procurement records;
• Quality assurance and controls; and
• Contract Implementation.
2.4.3 Government Procurement Services Agency (GPSA)
This is an executive agency of the Ministry of Finance, established under
the Executive Agency Act No. 30 of 1997 through Government Notice No.
235 of 7th December 2007 as amended by Government Notice No. 133
of 13th April 2012. The functions of the Agency include the following:
• to provide adequate quality supplies at competitive prices;
• to provide clearing and forwarding and consultancy services that
ensure value for money;
• to provide safe and secure warehousing and storage facilities;
and
• to arrange for procurement of common use items, services and
works (CUIS) using framework contracts.
2.4.4 Ministry of Communication, Science and Technology
Ministry of Communication, Science, and Technology (MCST) has the
responsibility of monitoring ICT related issues, prepares standards,
guidelines, and circulars on ICT related issues. It has the role of preparing
schedule of requirements for ICT related equipments as per PPR, 2005,
GN 97, section 60(2).
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The ministry has a responsibility of preparing a schedule of requirement
in ICT equipments. The schedule has to be submitted to the authority
(PPRA) and later the authority has to distribute the schedule to the
procuring entities so that they use it whenever they need to procure.
Use of the schedule of requirement will bring consistency, uniformity,
and proper coordination when procuring ICT equipments.
2.4.5 Procuring Entities (PEs)
These public entities procure various items. They are the implementers
of various acts, policies, and regulations that govern procurement
management. For procurement process to take place, procuring entities
have the following responsibilities falling under various actors within
the PEs as explained hereunder:
Procurement Management Unit (PMU)
This is the unit that is responsible for all matters related to procurement.
It has the following functions:
• Manage all procurement activities of the procuring entity except
adjudication and award of the contract;
• Plan the procurement activities of the procuring entity;
• Prepare contract document;
• Maintain an archive or records of the procurement process;
• Prepare monthly reports for the tender board;
• Prepare and submit to the management meeting quarterly reports on
the implementation of the procurement plan and
• Coordinate the procurement and disposal activities of all departments
of the procuring entity.
The User Department
The user department is the department which uses the items
that have been procured. It prepares schedule of requirement
as part of the budget process, and submits to the Procurement
Management Unit for compilation of annual procurement plan14.
It has the following functions:
14
PPA, 2011, Section 39(2)
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• Prepare technical input to statements of requirements to the
procurement Management Unit;
• Propose technical specifications to the Procurement Management
Unit when necessary; and
• Liaise with PMU during budgeting.
Inspection and Acceptance Committee in the Procuring Entities
This committee is appointed by the Accounting Officer. The committee
may even consist of a member from outside the Procuring entity. Major
function of the committee is to make sure that goods that have been
delivered are of desired quality. Once goods delivered have been
inspected, the committee should issue a certificate of acceptance to
the supplier to verify that goods are of the right quantity and quality15
. The committee should consist of members of relevant qualifications for
the said goods. It is advised to have new committee with qualifications
similar to goods being delivered, whenever there is delivery of goods
because goods delivered differ from each other.
Accounting Officer
Accounting Officer of the procuring entity has the major responsibility of
monitoring performance of procuring entity, suppliers, and procurement
system in the entity. The PPR GN 97 of 2005 clause 121, sub section
121(1) states that Accounting Officer has the responsibility for execution
of procurement process in the procuring entity. The Accounting Officer
has the responsibility of monitoring the following:
• The timely delivery of goods and services in the correct quantities
and to the quality specified in each contract;
• The progress and timely completion of works in accordance with the
terms of each contract; and
• Take or initiate steps to correct or discipline deviations from
observance of contract condition.
Other important actors in the procurement cycle include; Tender Board,
Tender Evaluation Team, and Suppliers.The system graph for the actors
explained above can be summarised as follows:
15
16
PPR, GN 97, 2005, Procedures and Inspections of Goods, Section 127, page 121
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MOF (PPD)
. Is responsible to Monitor Procurement systems in the Country
. Through PPD , the Ministry is responsible for Monitoring and Evaluating Performance of Government Procurement entities.
GPSA
MCST
PPRA
Advertise,
Evaluate tender
and provide the
list of suppliers
of common
use items to
the procuring
entities
Prepares
schedule of
requirements for
ICT equipment
and submit it to
PPRA for PEs to
use.
Submits schedule
of requirements
to PEs. Monitor
the compliance
and report on the
performance of
the procurement
in the country.
PROCURING ENTITIES
.
.
.
Procure ICT equipment based on their needs.
They request specifications of ICT equipment from the MCST when they want to procure.
They use list of suppliers listed by GPSA.
Figure 2.
The system graph
2.5 Process Description
Procurement system is managed at various levels. These include
management by oversight bodies (MoF and PPRA) and by procuring
entities. Management by oversight bodies is done through monitoring and
evaluation of Performance of procurement system whereas management
by procuring entities is done via several processes that include monitoring
and evaluation of their performance through establishment of needs,
planning, quality and Cost Control, and of the supplier’s performance.
GPSA as an independent agency has a responsibility of arranging
procurement of common use items on behalf of PEs. These processes
are described below;
a) Monitoring by MoF through the Public Procurement Policy Division
(PPD)
Monitoring of the level of performance of procurement systems in the
country includes:
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17
• Prioritizing the issue of performance during the planning;
• Setting targets as basis of monitoring;
• Collecting and analyzing data for
procurement system; and
reporting on performance of
• Taking corrective actions.
PPD should monitor the procurement activities of the PEs as stipulated
in their roles, analyze public procurement issues and challenges, advise,
provide guidance and follow-up on their implementation also it should
evaluate and review public procurement systems.
The division has a major responsibility of making sure that public
procurement system in the country is practiced properly. It also has a
responsibility of advising Central Government, Local Government and
Statutory bodies on issues related to procurement policies, monitoring
and evaluation, and review of public procurement systems, and
performance of public procurement institutions.
The divisions also supposed to coordinate with other stakeholders such
as PPRA on preparing and supervising various procurement policies to
make sure that procurement entities adhere to them.
Monitoring by the Public Procurement Regulatory Authority (PPRA)
The authority is answerable to the Board of Directors of PPRA but it has to
submit Annual performance Report to the Permanent Secretary (Ministry
of Finance) which is tabled in the Parliament. But the authority monitors
the compliance and report on the performance of the procurement
systems of procuring entities.
Arrangement for Procurement of Common Use Items and Services
(CUIS) by GPSA
Government Procurement services agency (GPSA) as the semi-autonomous
agency has the responsibility of organizing framework agreements with
suppliers who later enter into contract with procuring entities through
call off orders.
GPSA has issued a list of common use items and their prices because it
aims at minimizing procurement cost. It conducts a market research in
order to know the prices of various items existing in the market. It then
evaluates the prices set by suppliers who bid in order to come up with
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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
the common price which will prevail for the whole financial year taking
considerations of price fluctuations and inflation.
The benefits of using framework agreements of common use items and
services (CUIS) are:
• Minimized price differences
between PEs;
of common use items and services
• Protection of PEs against price rise during the period of contract
coverage; and
• Cost reduction in tendering process for the entire public sector.
The procedures for procurement of common use items and services.
i) PEs compile the list of common use items from their approved
budgets and annual procurement plans at the beginning of each
financial year.
ii) PEs submit the list of CUIs to GPSA with a copy to PPRA.
iii) GPSA aggregate all PEs requirements and submit them to PPRA for review and approval and publicize the agreed list of CUIs.
iv) GPSA prepare tender packages, decide on procurement methods to advertise tenders, handle procurement processes until award of framework agreements.
v) After the award, GPSA notifies the PEs the names of firms that have
been awarded framework agreements for different category of
common use items and services and their terms.
vi) Each PE places call off order directly to a supplier/service provider
and sends a copy to GPSA and PPRA.
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b) PEs monitoring of their own performance
Procuring entities have the responsibility of monitoring their own
performance and performance of the suppliers who have entered into
an agreement with them. They have to make sure that items procured
are of required quality and quantity and that there are no obsolete
items or else they have to be disposed off. They also have to see to it
that the supplier delivers goods in time and that the goods are of the
required quality.
Establishment of needs
At this stage the procuring entity assesses the need for the procurement
of goods. It is done by gathering information on the end-users’ needs
in a long- and short-term perspective. Thorough analysis of the needs
of users should be done in order to know the necessity of the needs,
its usage based on the capacity but at the same time they have to be
economical.
Specifications
At this stage, the procuring entity determines type of goods that are
required to meet the needs identified in the needs assessment. This
process will generally result in a description of the goods to be procured.
The required standards and other specifications of the goods, and the
time they are to be delivered have to be defined. The procuring entity
should also conduct a market analysis in order to get information on the
availability of the preferred goods on the market. If there are only a few
potential suppliers of the preferred goods on the market, there is a risk
for a limited competition which may inflate prices. In such situations the
procuring entity may reconsider its requirements in order to broaden
the group of potential suppliers and thereby the competition.
Cost Control
Controlling of costs of items should be done in order to avoid over pricing
of items. Procuring entity should have a more knowledge about current
prices of items in order to have lowest evaluated bidders with reasonable
price. The Government Procurement Services Agency (GPSA), since it is
the agency that evaluates suppliers who` will later be used by procuring
entities, have the responsibility of controlling prices on items. The
Government Procurement Services Agency (GPSA) has responsibilities of
arranging procurement of common use items and services by procurement
entities through framework agreement. The Government Procurement
Services Agencyis also responsible for preparing a list of suppliers and
send to procuring entities for use whenever required.
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Monitoring and Quality Control
When writing the contract, the conditions should reflect the awarded
tender’s price, quality and time frame. It should also clarify expectations,
roles and responsibilities for the management of the contract in order
to prevent any conflict. The supervision should be done as inspection of
work-in-progress by the Goods Inspection and Acceptance Committee16
before payment. Monitoring the performance of the supplier throughout
the contract period is necessary to be able to make well-informed
decisions for future procurements. PEs should also have enough
information about the supplier they want to use based on his previous
performance and recommended by other entities, so that they know the
kind of supplier they want to enter into agreement with. This will avoid
any conflicts that may occur.
Specifications by the Ministry of Communication, science and
Technology (MCST)
The ministry has a responsibility of preparing a schedule of requirement
in ICT equipments. The schedule has to be submitted to the authority
(PPRA) and later the authority has to distribute the schedule to the
procuring entities so that they use it whenever they need to procure.
Use of the schedule of requirement will bring consistency, uniformity,
and proper coordination when procuring ICT equipment.
16
PPR, GN 97, 2005, SECTION 127, Procedures for Inspection of Goods, pg 127.
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21
CHAPTER THREE
ASSESMENT OF NEEDS, COST CONTROL AND QUALITY CONTROL
3.1Introduction
This Chapter presents findings on management of PEs on the assessment
of needs of its users, setting of specifications, cost control and quality
control regarding ICT equipment.
3.2 Need Assessment users
The user department of a procuring entity is supposed to initiate
procurement requirements and propose technical specifications,
and forward them to the Procurement Management Unit for further
processes17. Further, the procuring entities are expected to consider the
existing equipment when assessing the actual needs18.
The interview conducted with the PMU officials from the 4 selected
ministries indicated that user departments were initiating their needs
and forwarding them to the procurement management unit to be
incorporated in the APP. However, review documents revealed that, the
Ministry of Industry and Trade was the only PE among the four PEs where
assesment of needs was based on inputs from user departments. For the
other three ministries MoHSW, MoW and MoHA, The assessment of needs
were not adequately done since users were not involved in the process
and the existing equipment were not considered.
3.3 Setting of Specifications for ICT equipment
According to PPR 60(2), the ministry responsible for matters related
to computers and other related information technology services is
supposed to prepare detailed and acceptable schedule of requirements
and specifications and make them available for use by the procuring
entities when procuring such items.
A review of documents from the Ministry of Communication, Science
and Technology (MCST) and interviews conducted during this audit also
revealed that, MCST has not proactively developed specifications and
schedule of requirements for use by the PEs. Likewise, most PEs have
not requested for the specifications from MCST. Instead, PEs were using
the specifications prepared by their in-house staff from ICT Units in this
17
18
22
PPA, 2004 section 36(1).
Public Procurement Performance audit guideline by AFROSAI-E
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
regard. Table 3.1 indicates that less than 13 percent of the PEs submitted
the requests for specifications to the MCST in 2009/2010. Further, the
percentage of the PEs that submitted the requests declined to less that
2 percent in the next two years. Interviews with the officials from the
selected PEs indicated that the PEs were not aware of this requirement.
The current ICT policy has been in place for ten years since its
establishment in year 2003 and it has never been updated. Because of this,
the policy cannot match with the current technological advancements.
Similarly, it was found that the MCST had never developed the ICT
standards to be used by public bodies.
Absence of ICT standards to be followed by public bodies has made
PEs procure different types of these equipment without due regard to
costs and compatibility of the purchased equipment with the existing
equipment (refer Section 3.3).
Table 3.1: Requests for Technical Specifications submitted to the MCST from PEs
Requests for Technical Specifications submitted to
the MCST from PEs (MDAs and LGAs)
Year
2009/2010
2010/2011
2011/2012
number of PEs
No. of Requests
280
36
390
7
393
7
Percentage of PEs
12.8
1.8
1.7
Source: Documents from the MCST
Out of the four (4) selected PEs, only one ministry (i.e. MoHA) had
requested for specifications from the MCST. The specifications requested
were meant for an ID Card Printer which had special features for use
in processing and printing of identification cards for all officers in the
Prisons Department in mainland Tanzania. GPSA, in 2010/2011, were also
among the entities that requested for technical specifications from the
MCST. These are the only sets of specifications that MCST has managed
to prepare during the three years under review.
Absence of coordinated specifications has made the PEs procure
equipment with different specifications, prices and quality while their
intended usage is similar.
Further, the Public Procurement Regulation (PPR) 5 of 2005 GN 97
requires the goods procured for use by public authorities or for a
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
23
particular project to be compatible with any similar goods that were
already supplied or provided for compatibility on usage.
According to document review and interviews with PEs officials, it was
noted that in most of PEs, the brands which are commonly used are
based on Windows Operating System. However, the records for the year
2011/2012 showed significant variations in the specifications for laptop
that were purchased by the four ministries (refer Table 3.2).
Table 3.2: Variation in Specifications for Laptops
Procuring
Entity
MoW-
MoHA
Equipment
Year
Specifications
RAM
Processor
Memory Screen War(GB) speed (MHz)
(GB)
size
ranty
(ins)
(Years)
Laptop
computer
19/4/2010
4
3.2
512
14
1
Laptop
computer
22/7/2009
2
2
250
14.1
3
Laptop
computer
15/8/2009
2
2.2
80
15
1
Laptop
computer
2011/2012
3
2.5
320
15.6
1
Laptop
computer
2011/2012
3
2.5
320
15.6
1
8/6/2011
4.0
2.4
800
14
1
Laptop
computer
7/12/2012
3
3.1
500
17
1
Laptop
computer
27/12/2012
4
2.5
500
13
1
MoHSW Laptop
computer
Source: PEs files
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Table 3.3: Variation in Specifications for Desktop Computers
Procuring
Entity
MOIT
MOW
MoHA
Equipment
Period of
purchase
Specifications
RAM
(GB)
Processor
speed
(MHz)
Memory
(GB)
Screen
size
(ins)
Warranty
(Years)
Desktop
computer
6/1/2012
4
2.4
640
19
1
Desktop
computer
2/12/2011
2
3
250
19
1
Desktop
computer
5/4/2011
2
3
250
19
1
Desktop
computer
20/6/2009
1
2.8
250
17
3
Desktop
computer
15/9/2009
2
2.8
250
19
3
Desktop
computer
22/8/2009
2
1.8
160
17
2
Desktop
computer
2009/2010
8
2.93
300
17
3
Desktop
computer
2009/2010
2
2.8
160
17
3
Desktop
computer
2011/2012
4
2.33
160
17
1
Desktop
computer
2011/2012
4
2.33
160
17
1
Source: PEs files
In addition, it was found that at the Ministry of Water, all the employees
were using a common brand of laptops and desktops except for one
official who was using Imacs desktop from Apple Computers which uses
Linux Operating System (refer Table 3.4). This equipment is relatively
more expensive and likely to pose some difficulties in maintenance
especially the availability of spare parts and technical19 personnel for
repair work when need arises. In general, this kind of equipment is
likely to be a burden to the government.
19
Note that most IT experts operating in Tanzania have been trained based on Windows Operating System and not LINUX.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
25
Table 3.4: ICT equipment with different operating system
S/N
ICT Equipments
Qty
Price
1
Desktop-Macbook pro
1
4,130,000
Total
Amount
4,130,000
2
Ipad 3, 64 GB, wifi and 4G
2
2,900,000
5,800,000
3
Ipad 3, 64 GB, wifi and 3G
1
2,300,000
2,300,000
4
Ipad 2, 64 GB, wifi and 3G
1
2,183,000
2,183,000
Total amount
used
14,413,000
Source: Data from the sampled PEs
Table 3.4 above also shows three iPads which were purchased although
they were not in the budget and the annual procurement plan. This
was caused by the absence of coordinated specifications, improper
assessment of needs and non involvement of ICT technical personnel
(for this case ICT Unit).
3.4 Under-utilization of ICT equipment by the PEs
An analysis was carried out to establish whether there was a mismatch
between real needs of the PEs and the available capacity of the ICT
equipment for the four selected PEs. Printers and photocopiers were
chosen for this matter where the annual consumption of paper was
estimated and the combined printing and photocopying capacities were
computed. Comparison of the amount of paper used and the combined
rated capacity of the printers and photocopies in the four ministries,
revealed that the ministries were using less than 6 percent of the
capacity of the printers and photocopiers (refer Appendices 2 and 3).
This implies that the PEs has been procuring more equipments than their
actual needs and that the equipment that have been procured cannot
be utilized to their maximum capacities. In addition to this, review of
PEs’ plans, budgets and files revealed that the PEs was still planning to
purchase more printers and photocopiers during the year 2012/2013.
This was caused by weaknesses in needs assessment as explained in
section 3.2 and 3.3.
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3.5 Cost control for the goods supplied
3.5.1 Variations in prices of goods supplied
According to Regulation 5 of the PPR (2005) 20 procuring entities are
required to ensure that the prices paid during procurement represent
the best value. The analysis of information derived from documentary
reviews revealed that there had been significant differences in prices
for items with the same specifications purchased by the PEs in the same
year. The variation in the prices for the same item within the same year
ranged from 4% to 53%.
Table 3.5 shows the differences in prices for some items that were
purchased by the same PEs from different suppliers during the years
under review:
Table 3.5: Prices variation for ICT equipment purchased in the same year.
Year
Procuring
entity
2009/10 MoW
2010/11 MoIT
ICT equipment
Prices (TSh) and Date
Desktop
1,850,000
Computer- on
20/6/2009
DELL
Optiplex
760MT
1,414,893 2 differon
ent sup15/7/2009 pliers
435,107
24
HP Laser- 600,000
Jet Printer
In October.
P2055DN
2009
680,000
2 different suppliers
80,000
13
Desktop
computer
Dell Optiplex, 380
pentium,
3.0 GHz
1,480,000
1,043,000
487,000
30
In April
2011
In June
2011
2 different suppliers
Same
supplie
1,100,000.
11
620,000
41
Photocopi- 9,600,000
er Canon
In April
IR 231 8L
2011
2011/12 MOIT
MoW
20
Supplier Difference Per(TSh)
in Price
cent(TSh)
age
In Feb.
2010
8,500,000
In June
2011
Desktop
1,480,000
2,100,000 Same
supplier
Computer
On
DELL OPTI- In
12/12/2011 16/1/2012
PLEX
Public procurement regulation 5,(2005)GN 97
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
27
Year
Procuring
entity
MoW
MoHSW
ICT equipment
Prices (TSh) and Date
Apple –
Ipad 3,
64GB wifi
+3G.
3,500,000
2,950,000
Printer HP
2055DN
Supplier Difference Per(TSh)
in Price
cent(TSh)
age
550,000
16
23/4/2012
on
3/5/2012
2 Different suppliers
900,000
23/5/2012
750,000
2 differ12/9/2012 ent suppliers
150,000
17
Source: Files from the PEs
Table 3.6 shows the differences in prices for some items that were
purchased by two different PEs from the same supplier during the
years under review:
Table 3.6: Different prices set by same supplier in different PEs
Difference in Price
Supplier
Item
MoW
MOIT
Power Comput- HP laser Jet
ers Ltd
Printer 2025dn
1,000,000
1,534,000
August
2011
December
2011
Power Comput- Projector Epson
ers Ltd
S9
1,694,000
1,770,000
March
2012
December
2012
Power Comput- Scanner HP 5590 500,000
ers Ltd
January
2012
650,000
(TSh)
Percentage
534,000
35
76,000
4
150,000
23
May 2012
Source: Files from the PEs
3.5.2 The role of GPSA in controlling the prices
According to Section 45 (c) of the PPA 2004, the procuring entity is
supposed to make use of framework contracts whenever appropriate to
provide efficient and cost effective means of procuring goods that are
used repeatedly over time21.
21
28
PPA 2004, section 45 (c ), Procurement Planning.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
As a result of the above, in 2009/2010 the Government Procurement
Services Agency (GPSA), started arranging procurement of common
use items through framework agreements, preparing suppliers list and
approval of prices to be used by procuring entities 22.
Review of documents from the selected PEs revealed that PEs do not
adequately adhere to the guidance issued by the GPSA. Despite having
a list of common use items with their respective ceiling prices as set
by GPSA, the PEs opted to other procurement methods, in this case
quotations or other methods was used for purchasing the ICT equipments.
Interviews with officials from the selected PEs indicated that the
decision to use quotation or other methods was based on the fact that
the specifications which were provided in the list provided by GPSA were
outdated, and the prices were very high. However, further scrutiny of
the documents from the selected PEs showed that the PEs purchased the
ICT equipment through quotations and other methods at higher prices
compared to the price ceilings issued by GPSA although the specifications
for the items were the same (refer Appendix 4).
The decision by the PEs not to adhere to price ceilings set by GPSA
increase the burden to the government because the PEs were using
additional resources for duplicating the efforts by taking the suppliers
through another selection process and, at the same time accept prices
that are higher than the approved price.
3.6 Quality control of the supplied ICT equipment
In order to ensure that goods supplied are of good quality, the PEs are
supposed to have specifications in place and ensure that adequate
inspection is conducted during delivery to verify if the supplied goods
comply with the specifications.
22
PPA 2004, section 45 (c) and Regulation 57(2) of PPR 2005
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
29
3.6.1 Adequacy of inspections conducted
When PEs procure goods, it is expected that the prices paid by the
procuring entity to represent the best value23. Goods procured are
expected to be of satisfactory quality, appropriate to the public authority
requirements.
Interviews with officials from the 4 PEs indicated that inspections were
being conducted for all the supplied ICT equipment in all the 4 ministries.
However, review of documents from the MOIT and MoHA did not show
any signs that inspections were being conducted.
On the other hand, review of documents from the MoW showed that the
goods were inspected although the inspection reports did not show the
records of the tests conducted.
Document review at the MoHSW indicated that the inspection teams
were recording quantity and value of the delivered goods with no
comments on the compliance with specifications.
3.6.2 Composition of the Inspection Teams
Procuring entities are required to have inspection and acceptance
committees appointed by Accounting Officer24. This committee is
required to inspect the goods delivered to ascertain the quantity and
compliance with specifications as agreed in the contract.
Inspection and acceptance Committee is supposed to be appointed each
time the goods are expected to be received. The committee is also
expected to comprise people with various expertise, depending on the
nature of goods to be delivered.
According to interviews and document review, PEs have been appointing
members of the inspection and acceptance committees to serve for
specific durations without regard to skills required for particular type of
goods to be delivered. For instance:
• The Accounting Officer for the Ministry of Health and Social Welfare
had appointed inspection and acceptance committee to serve for
five months (9th February-30th June, 2011) 25.
• The Accounting Officer for the Ministry of Industry and Trade had
appointed the inspection and acceptance committee to serve for the
period of three years, starting from 6th June, 201126.
23
24
25
26
30
PPR 5,GN 97
The Accounting Officer is a Government officer appointed in accordance with the provisions of Public Finance Act, 2004 to hold a vote and account for all monies ex
pended from that vote (PPA 3(1)).
Letter with reference number AB.209/437/02 dated 9th February, 2011.
Letter with reference number CGA. 74/218/01 dated 6th June, 2011.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
According to interviewed PEs officials, the Public Procurement
Regulations did not specify the tenure of the appointment of the said
committees. However, according to directives given by the PPRA,
it is required that a procuring entity should have a newly appointed
committee whenever goods are procured since each type of goods is
likely to involve a different set of skills during inspection. According
to PPRA, these directives have been given to the PEs through trainings
as well as during the audits that PPRA conducts. Having permanent
committees without due consideration of skills relevant to the type of
goods procured would lead to ineffective inspections27.
Table 3.7 shows the composition of the inspection and acceptance
committee in the selected PEs with their respective qualifications with
a view to assess their suitability for inspecting of the delivered ICT
equipment. Further details on the qualifications of the teams are given
in Appendix 5.
Table 3.7: Composition of the appointed Inspection committee in
the sampled PEs
Years
2009/2010
2010/2011
27
MOW
Inspection team
varied based on
items being delivered. On delivery
of ICT equipment,
the team had at
least one ICT expert. This was as
per WB requirements.
Inspection team
varied based on
items being delivered. On delivery
of ICT equipment,
the team had at
least one ICT expert. This was as
per WB requirements.
MOIT
No inspection team
existed.
MOHA
No inspection team
existed
MOHSW
No inspection
team existed
The Inspection committee was
formed to
serve for 3
years. No ICT
expert in the
team.
No inspection team
existed
until
Inspection team
was appointed
in the last half
of 2010/2011
consist of 9
members, one
of them being
ICT expert.
PPR(127b)GN 97
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
31
Years
2011/2012
MOW
Inspection team
varied based on
items being delivered. On delivery
of ICT equipment,
the team had at
least one ICT expert. This was as
per WB requirements.
MOIT
There was a
team which
was appointed in
2010/11.
MOHA
Inspection
committee
to serve for
12 months.
No ICT expert in the
team.
MOHSW
The team was
appointed to
serve for 2
years. 2 out of
26 members
were ICT experts
in the committee.
Source: Files from the sampled PEs.
From table 3.7 it can be seen that, in some ministries committees have
been appointed to serve for a specific duration ranging from 1 to 3 years.
This is contrary to PPRA directives which require each delivery to be
handled independently including appointment of inspection committee.
Three out of four PEs have not been appointing new team each time of
delivery.
The above table also shows that some PEs didn’t have ICT experts in
the inspection committees for inspecting ICT equipment. We found this
situation in the Ministry of Industry and Trade and Ministry of Home
Affairs. This is not a good practice because it may cause the PEs to
obtain equipment of poor quality.
32
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
CHAPTER FOUR
MONITORING AND EVALUATION OF PEs PERFORMANCE BY
ACCOUNTING OFFICERS
4.1 Mechanisms for Regular Monitoring of PEs Performance
The Accounting Officer is responsible to make proper execution of
the procurement processes by monitoring the implementation of the
awarded contracts in accordance with the terms and conditions of the
award. In this regard, Accounting Officers are expected to develop
and form mechanisms for regular monitoring and evaluation of their
procuring entities. In order to achieve this, PEs are required to have
adequate plans for monitoring and evaluation of their own performance
regarding procurement.
Review of documents indicated that PEs have plans for monitoring and
evaluating the entities performance in general, and they give little
attention to the performance of the procurement function.
Interviews with officials from the selected PEs indicated that PEs were
using Annual Performance Reports that they submit to PPRA as their self
assessment reports on their performance.
A review of the Annual Performance Reports of the selected PEs revealed
that important performance indicators in procurement such as cost,
quality, and delivery period were not addressed in the reports.
Table 4.1 shows the analysis of the said procurement reports against the
indicators of performance.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
33
Table 4.1: Issues covered in PEs annual performance reports
Name of the
Entity
Ministry of
Health and Social
Welfare
Ministry of Home
Affairs
Ministry of Industry and Trade
Issues reported
Status of contracts
Consideration of issues reported on
factors of performance
Cost
Quality
Delivery period
P a y m e n t None
Contract comstatus
pletion date
Status of conP a y m e n t None
tracts
status
Targets vs Actual None
None
Performance
Contract completion date
None
Source: Performance reports
Based on the analysis of Table 4.1 the annual performance reports which
are prepared by PEs and submitted to PPRA did not adequately cover all
the important aspects of monitoring and evaluation of the PEs procurement
performance. Because of this, PEs cannot adequately assess their performance
since their analysis will be based on limited information.
4.2 Monitoring of the distribution of supplied ICT equipment
Review of documents from the four sampled PEs show the Procured
ICT equipments were not initiated by users .The situation found on
the ground was, that there was atendency of issuing the purchased ICT
equipment in bulk to individuals who were expected to redistribute the
said equipment to other staff. However, in all the sampled PEs audited,
there were no records that show the names of the real users of the
equipment that were supposed to be redistributed. The PEs, through the
PMUs, did not make follow ups to ensure that the equipment reached
the targeted employees. Table 4.2 shows some ICT equipment that
were issued in bulk to some individuals without verifying whether the
equipment reached the intended users. This led to poor management on
allocation of the ICT equipment issued to the staff.
34
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Table 4.2: ICT Equipment Issued to Individuals in Bulk
S/N
1
2
3
Procuring
entity
MOHSW
MOHSW
MOHSW
4
5
6
7
8
9
10
11
MOHSW
MOHSW
MOHSW
MOHSW
MOHA
MOHA
MOHA
MOIT
12
13
14
MOIT
MOIT
MOIT
15
16
17
18
MOIT
MOW
MOW
MOW
ICT equipment
Scanner
Printer laser Jet
Desktop computer
Printer laser Jet
2055D
desktop Computer
Desktop computer
Laptop computer
Desktop Computer
Printer HP
Photocopiers
Desktop computer
Laptop
computer
Dell
Desktop computer
HP Printer p2055d
Laptop
computer
Dell
desktop computer
HP Printer p2055d
Laptop HP Probook
Source: Data from sampled PEs
Quantity
2
50
50
Issued to (as per issue voucher)
PMU
MSD
MSD
19
17
7
7
36
38
4
14
MSD
Data Entry
ICT analyst
ICT analyst
E. Kilo
E. Kilo
RMA
DSME
4
5
2
DSME
PS TO DTM
DTI – PTO
4
4
6
11
DPP-STT
Mr. Nurdin Ndimbe
Principal Technician
Principal Library Assistant
Table 4.2 illustrates the items that were issued in bulk. There was no
evidence that showed the ICT equipment were issued to end users. This
is an indication of control weakness in the management of allocation
of the purchased equipment. Because of this, there is a risk that the
purchased equipment may be misallocated without the knowledge of
the PEs.
4.3 Conducting the monitoring of suppliers performance
PEs are expected to conduct regular reviews of performance of suppliers
with a focus on targets and quality standards on the performance of
contracts. Interviews conducted with PEs officials indicated that PEs had
conducted this monitoring activity and the results are reported in the
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
35
annual performance reports. A review of annual performance reports
did not cover the issue of the supplier’s performance.
It was further noted that PEs had not been fully adhering to the terms
stipulated in the contracts when managing the supply contracts. Some
suppliers were late in delivering ordered goods but Clauses for liquidated
damages were not used as specified in the contracts (refer Table 4.3
and Appendix 6).
Table 4.3: Contracts that were delayed by suppliers
S/N
PE
1
MoW
2
3
MoW
MOIT
Supplier
Agumba Computers
CATS (T) Ltd
Agumba Computers
Source: Files from sampled PEs
Date of Delivery
Actual Delivery
Required
Period
12/1/2010
26/4/2010
12/1/2010
14/10/2010
11/6/ 2010
Nil – contract was
eventually terminated
Interviews with officials from the selected PEs28 indicated that some PEs
have been doing an informal assessment of their suppliers’ performance
through their respective Procurement Management Units (PMUs).
However, the results of these assessments were not documented. It
was further noted that, the only formal and documented assessments
that the PEs were usually conducting were focused on screening the
prospective suppliers during tendering.
It was further revealed that PEs were facing difficulties29 with some
suppliers due to their failure in capturing the performance history
of their prospective suppliers during the selection process. This was
because evaluation of the suppliers was based on the information that
was submitted by the suppliers themselves. PEs could not know about
any incidences of poor performance by these suppliers if the same was
not mentioned by the suppliers in their submissions.
In this audit, it was revealed that some suppliers had underperformed in
their previous engagements and yet they managed to secure contracts
in other PEs. (see Appendix 6).
28
29
36
Accounting Officers of the Ministry of Industry and Trade and the Ministry of Health and Social Welfare.
Poor quality of goods, late delivery, high prices than normal market prices(refer appendix 11 and appendix 9)
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
CHAPTER FIVE
MONITORING AND EVALUATION OF PERFORMANCE OF
PROCUREMENT SYSTEM BY CENTRAL AUTHORITIES
5.1Monitoring the Performance of Procurement System
by the Ministry of Finance
5.1.1 Plans for Monitoring Procurement System
The Ministry of Finance is expected to monitor, evaluate and report on
the performance of the public Procurement Systems30 in the country and
advice on desirable changes.31
The review of Strategic plans of the Ministry indicated that the Ministry
of Finance, through PPD, had plans for policy formulations, development
of procurement standards to be used by public bodies, development of
the Monitoring and evaluation framework for procurement performance
in the country, building capacity of procurement and supplies staff,
and conducting studies and researches on public procurement for
improvement 32.
However, review of implementation reports revealed the activities
that were planned were not adequately implemented. Specifically, the
following weaknesses were revealed:
5.1.2 Formulation of the National procurement Policy by June 2012
Formulation of the National Procurement Policy was planned to be
completed within three years from July 2009 to June 2012. However, PPD
did not finalize preparation of the National Procurement Policy within
the planned three years (refer Appendix 7). So far PPD has managed
to produce a draft policy which was issued in December 2012, and has
been forwarded to different stakeholders for their comments. The total
amount spent on this activity is TSh. 617 million as of June 201233.
30
31
32
33
Procurement system is a set of detailed methods, procedures and routines created to carry out procurement. It includes Acts, regulations, standards, circulars, procedures.
URT, the functions and organization structure of the ministry of finance (Finance, June 2011).
Ministry of Finance, medium term strategic plan 2009/10-2011/12.
Annual implementation reports 2009/10 to 2011/12.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
37
Due to absence of monitoring and evaluation on the performance of
the procurement system, the MoF has not been able to achieve the
following:
• To ensure accountability because it cannot assess whether the
procurement is effectively, appropriately, and efficiently executed.
• To watch the progress of the procurement system against time,
resources and performance schedules and to identify lagging areas
requiring timely attention and action.
• To alert the government about its possible success and failures in
management of the procurement system.
5.1.3 Development of Procurement Standards for Public bodies
According to Interviews conducted with PPD Officials and document
reviews, the procurement standards have not been developed to date.
PPD has been planning for this activity since 2009, yet the activity has
not been implemented even though an amount of Sh. 228.4 million has
already been spent on the issue up to the June 2012. The standards
could not be prepared in the absence of policy, laws and regulations.
However the Public Procurement act and its Regulations have been their
since 2001.
In the same way, PPD did not develop procurement standards to be used
by public bodies in the country when conducting procurement. These
facts are tabulated in Appendix 7.
5.1.4 Establishment of monitoring and evaluation framework for
policy strategy
A review of budget and annual implementation reports showed that,
for three consecutive years, PPD allocated funds for monitoring of the
procurement policy which was none existent, since the policy has not
been put in place so far. The amount budgeted for this specific activity
up to the period of audit was Sh 164.7 million. This amount of money
was reallocated34 in updating the database of procurement and supplies
staff.
Lack of framework for monitoring and evaluation of the performance of
procurement system is likely to obstruct the Ministry of Finance from
providing assistance in strengthening the procurement system through
M&E.
34
38
Second quarter implementation reports of the Public Procurement Policy Division 2011/2012 and the Annual Implementation Report of the Ministry of Finance 2009/ 2010 to 2011/2012.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
5.1.5 Conducting studies and research on Public Procurement
PPD has neither planned nor conducted any study or research for the
improvements of the procurement system since its establishment in
2009.
Interviews with PPD officials and review of performance reports revealed
that, the Division could not accomplish some of their responsibilities
because of budgetary constraints. Other reasons mentioned were:
• Their duties were not specified in the current procurement Act;
• Understaffed;
• PPRA has been doing these duties so there no clear segregation of
who should do what; and
• No enough working tools to accomplish their duties, such as
insufficient motor vehicles, internet connection is poor, and the
office space does not meet their needs.
These reasons cannot be used as justification for not performing their
duties of monitoring procurement performance since:
• The duties of the PPD are specified in the functions and organization
structure of MOF(2009 AND 2011) as well as in the responsibilities
of the head of the PPD;
• If the PPD is understaffed they could think of alternative such
as outsourcing some of the functions while building their own
capacity;
• Resources for carrying out Research and studies were supposed to
be included in their plans and budgets right from the beginning;
• The amount budgeted for, could be used in the planned activity
instead of reallocating them; and
• It is the responsibility of the Ministry of Finance to ensure
harmonization of various functions in the procurement system.
This includes avoidance of overlapping of responsibilities among
various organs dealing with procurement.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
39
5.2 Coordination between MoF and other stakeholders
The Ministry of Finance (MoF) through PPD has a major role in making sure
that there is adequate coordination among procurement stakeholders
in the country. Coordination is expected to assist PPD in identifying
challenges in the procurement system, critical areas in the system and
areas that need improvements, and creating ways for improving the
system.
However, the division has not conducted any procurement research,
forums with stakeholders like PPRA and GPSA geared at harmonizing
the roles played by various bodies. Based on interviews with officials in
procuring entities, the division is not known for its role to coordinate and
develop standards of procurement system to be implemented by public
bodies. It is rather known for the role in regulating and maintaining the
procurement cadre.
Lack of coordination among procurement stakeholders has prevented
sharing of ideas and creating opportunities for learning and improving.
40
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
CHAPTER SIX
CONCLUSIONS
The findings in the previous chapters made us draw various conclusions
based on procurement management in Tanzania.
6.1 Establishment of needs and setting of specifications
The MOIT was the only PE among the four selected PEs which showed
that analysis of needs was being conducted. The remaining three
PEs, MoHA, MoW and MoHSW, did not adequately and professionally
establish the needs for procurement of such items although users had
influence on the items being procured. As a result, the PEs purchased
more equipment than they actually needed ending eventually in underutilizing the purchased equipment. Most of the time, the PEs procured
equipment with bigger capacities and therefore, more costly than what
was actually required.
The ministry responsible, MCST, had not established specifications for
various ICT goods. It had not prepared standards or guidelines for guiding
the PEs when they wanted to purchase such equipment. On the other
hand, most PEs did not take any initiative to request for specifications
from the MCST.
In addition, the Ministry of Communication, Science, and Technology
had neither updated the ICT policy nor developed ICT Standards for use
by the PEs
Lack of standards and coordinated specifications, coupled with an
outdated ICT policy, has lead to each of the PEs to have their own sets
of specifications although the intended uses of the equipment are the
same. In some instances, the PEs have introduced ICT equipment which
are not easy to maintain because they are rare and spare parts are not
easily available and are relatively expensive.
6.2 Control of costs of ICT equipment among PEs
There are significant price variations for ICT equipment despite their
similarities. Same item has been procured by one or different PEs at
different prices. This shows that the prices of such goods are controlled
by suppliers and not the procuring entities.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
41
The Government Procurement Service Agency (GPSA), in trying to
control excessive price variations, had come up with a list of suppliers
and price ceiling for various common use items. However, some PEs
approached the same suppliers who are on the list prepared by GPSA for
new quotations without following the proposed price ceiling.
The government is incurring additional tender administrative costs
because the PEs duplicate the selection process instead of adhering to
the guidance regarding suppliers and approved price ceilings issued by
GPSA.
6.3 Quality control of supplied ICT equipments
The PEs Inspection Committees did not adequately conduct the
inspections of the delivered ICT equipment. They did not also produce
reports on the quality of the received equipment.
The goods inspection committees selected by the Accounting Officers
were not always adequate for the assignment since in some incidences
the teams did not involve ICT experts.
Lack of control and coordination in setting specifications by the Ministry
of Communication, Science and Technology has resulted into purchase
of unnecessarily expensive ICT equipment, while low price alternatives
which would have equally sufficed for the intended purposes were
available.
6.4 Monitoring and evaluation of PEs performance by
Accounting Officers
The PEs’ plans for monitoring and evaluation do not address the
performance of the procurement functions within the PEs. Important
performance indicators in procurement such as cost, quality and delivery
time were not addressed.
Distribution of the purchased ICT equipment was poorly managed since
the goods were distributed in large quantities to individuals who were
supposed to re-distribute the same to the intended users, but the PEs
did not verify if this had been done.
The PEs do not report on the performance of the suppliers in implementing
the awarded contracts. Due to this shortfall, some suppliers who had
not performed well in some previous assignments were able to win other
contracts with other PEs.
42
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
The PEs do not adhere to the contracts when supervising the delivery of
goods, clauses for liquidated damages are not applied for the delayed
delivery of goods.
6.5 Monitoring and evaluation by the PPD
Despite being one of their obligations, PPD have not included monitoring
and evaluation of procurement performance among their priorities for
the last three years. Lack of monitoring and evaluation denies the
government an opportunity to learn from experience so as to foster
improvement in the public procurement practices. PPD has failed to
finalize preparation of the national procurement policy within the
planned three years.
PPD has also failed to set right priorities in their plans based on practical
experiences. For three consecutive years, PPD has reallocated the
funds that were set aside for monitoring and evaluation framework for
performance of procurement system, because of this, the intended
activity could not start.
In the same way, PPD failed to develop procurement standards to be
used by public bodies when conducting procurement although reports
indicated that money was spent for the same activity.
PPD allocated funds for activities that could not be implemented
under the circumstances and ended-up reallocating the funds to other
activities.
PPD did not include in their plans activities which are important for
improvement of the procurement system. This included: conducting
research and other studies in order to strengthen procurement and
monitor its implementation; and monitor and evaluation of public
procurement institutions.
6.6 Harmonization of roles for various actors
PPD has failed to harmonize the roles of various institutions in the
procurement management system. This led to duplication of duties
among various actors in public procurement management.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
43
CHAPTER SEVEN
RECOMMENDATIONS
The audit findings and conclusions point out weaknesses in planning
and implementation of monitoring and evaluation of the procurement
system both by the PEs and the Oversight Bodies. Other weaknesses
were found on the establishment of needs, cost control and quality
control by procuring entities.
This chapter therefore, contains recommendations to the Ministry of
Finance (MoF), Ministry of Communication, Science and Technology
(MCST) and the Procuring Entities (PEs) regarding the weaknesses
pointed out in the previous three chapters.
Some of the recommendations regarding the actions of the procurement
entities have been directed to the MoF because of its pivotal role in the
management of public procurement. It is expected that the MoF will
act on most these recommendations through the Public Procurement
Policy Division (PPD), Government Procurement Services Agency (GPSA)
and PPRA. The Audit Office believes that these recommendations need
to be considered if the procurement of ICT equipment is to be better
managed ensuring that Value-for-Money is achieved in the use of public
resources.
7.1 Establishment of needs and specifications
The Ministry of Finance should ensure that:
1. The PEs properly assess procurement needs by involving the
user departments by considering compatibility with the existing
equipment, and avoid procurement of equipment beyond the real
needs.
2. The PEs utilize the available printers and photocopiers fully
before planning to purchase additional equipments.
3. The PEs fully involve experts in the ICT either from within the
PEs or from the parent ministry (i.e. Ministry of Communication,
Science, and Technology) in setting technical specifications; and
4. Heavy duty printers and photocopiers that PEs have are networked
and shared so that they can be used by more users to fully utilize
their capacities and reduce idle capacity which in the long run
may end up being very costly to PEs.
44
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
The Ministry of Communication, Science, and Technology should:
5. Update the ICT policy and develop ICT Standards for use by the
PEs; and
6. Provide schedule of requirements and technical specifications for
various ICT equipments that will be used by all procuring entities
to achieve uniformity;
7.2 Control of cost variations over ICT equipments
The Ministry of Finance should ensure that:
1. The PEs make use of the list of suppliers and recommended
price ceilings provided by GPSA, as much as possible, in their
procurement undertakings; and
2. Adequate controls are established by the PEs to ensure that the
specifications developed take on board the real needs of the users
to avoid purchasing expensive equipment unnecessarily.
7.3 Controlling the quality of the items being procured
The Ministry of Finance should ensure that:
1. Adequate controls are established to ensure that the Goods
Inspection Committees appointed by the PEs comprise members
with necessary skills and expertise which match the type of goods
that are being procured; and
2. In all PEs, inspections of the delivered goods are adequately
conducted and reports are prepared and submitted to the
respective authorities to ensure that the purchased items comply
with the desired specifications.
7.4 Monitoring and evaluation of the suppliers’ performance
Procuring entities need to ensure that they conduct monitoring and
evaluation of the performance of their respective procurement systems,
including assessment of supplier’s performance. In particular, the
Ministry of Finance should ensure that all PEs:
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
45
1. Prepare plans for monitoring the suppliers performance from
the contracting stage of the procurement process and during the
implementation phase and identify the resources needed for the
monitoring of the suppliers in place;
2. Adhere to the contract terms when supervising the delivery of
goods; and
3. Periodically prepare and submit reports to PPRA on the
performance of the suppliers in implementing the awarded
contracts. This information should be accessible to other PEs so
as to help them in identifying the suppliers who did not perform
well in their previous assignments and avoid engagements with
non-performing suppliers.
7.5 Monitoring and evaluation by PPD
1. The Ministry of Finance should ensure that PPD finalise all the planned
activities. These include:
i.
Preparation of the National Procurement Policy; and
ii.
Establishing procurement standards to be used by public
bodies when conducting procurement
2. The Ministry of Finance should also ensure that PPD includes in their
plans and implement the following:
i.
Monitoring and evaluation framework for performance of
procurement system;
ii.
Conducting research and other studies in order to strengthen
procurement and monitor its implementation; and
iii.
Monitoring and evaluation of public procurement institutions.
3. The Ministry of Finance should ensure that PPD utilizes its funds for
implementing the budgeted activities instead of reallocating the
funds to other activities.
46
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
REFERENCE
1.
AFROSAI-E Public Procurement Performance Audit Guideline.
2.
Annual Performance Evaluation Report for Financial Year
2009/2010, PPRA.
3.
Annual Performance Evaluation Report for Financial Year
2010/2011, PPRA.
4.
Annual Performance Evaluation Report for Financial Year
2012/2012, PPRA.
5.
Annual Report 2009/10; Ministry of Finance and Economic
Affairs.
6.
Functions and organization Structure of the Ministry of Finance
and Economic Affairs, President’s Office-Public Service
Management, June 2009.
7.
Functions and organization Structure of the Ministry of Finance
and Economic Affairs (Approved by the President on 3rd June,
2011), President’s Office-Public Service Management, June
2011.
8.
GPSA Executive Agencies Act (CAP 245), Order 2012,
Government Notice No. 133, Published on 13/4/2012.
9.
GPSA Medium Term Strategic Plan 2010/11 – 2012/13.
10.
http://www.slideshare.net/srengasamy/project-monitoringevaluation-s-presentation, cited on 01/12/2012.
11.
Letter with reference number AB.209/437/02 dated 9th
February, 2011.
12.
Letter with reference number CGA. 74/218/01 dated 6th
June, 2011.
13.
Ministry of Communication Science and Technology, Medium
Term Strategic Plan, 2009/10-2011/12.
14.
Ministry of Finance Medium Term strategic plan 2009/10 –
2011/12.
15.
Public Procurement Act, 2004.
16.
Public Procurement Regulation, GN 97 of 2005.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
47
48
17.
Report of the CAG for the fiscal year 2010/2011.
18.
PPRA, Assessment of Country Procurement System.
19.
PPRA presentation, Accountability Conference, 29th May,
2012.
20.
Public Procurement Performance Audit Guideline under Needs
assessment, Page 7.
21.
PPRA Medium Term Strategic Plan 2009/10 – 2013/14.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
APPENDICES
Appendix 1: Audit questions and Sub Questions
Appendix 2: Actual Usage of the Equipment
Appendix 3: Analysis of Capacity of Printers and Photocopies
Available in Procuring Entities
Appendix 4: Table for price comparison between GPSA and PEs
for the first half of 2012/2013
Appendix 5: Showing composition of Inspection and Acceptance
Committee and the qualifications based on ICT
equipments procured and delivered.
Appendix 6: Poor Performance of Suppliers
Appendix 7: PPD Planned Activities Against Implementations
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
49
Appendix 1:Audit questions and Sub-questions
This report provides results obtained from the following three audit
questions:
Audit questions 1: To what extent are needs assessment analysis,
cost, and quality control of ICT equipment are adequately done?
Sub-questions
1.1 Does the PEs adequately specify their requirements for ICT equipment?
1.2 Does the PEs adequately control major price and quantity variations on
the ICT equipment supplied?
1.3 Does the PEs adequately control quality of ICT equipment supplied?
Audit Question 2: Does the PE have adequate mechanisms for regular
monitoring and evaluation of their performance and address the
underperformance when appropriate?
Sub-questions
2.1 Are there mechanisms for regular monitoring and evaluation of the entities’ performance in
relation to price, quality, delivery, agreed budget,
and other contract provisions?
2.2 Are there plans and actions to establish whether or not the supplier’s
performance is satisfactory?
2.3 Do contracts/call of orders/ framework agreements have regular reviews, targets, and quality standards in order to objectively assess supplier’s performance?
Audit Question 3: To what extent does the PPD monitor and evaluate
the performance of procuring entities
Sub audit questions
3.1 Does the PPD have plans for monitoring procurement systems?
3.2 Has the PPD identified key issues related to performance of the PEs during monitoring?
3.3 Does PPD coordinate with other stakeholders on issues related to procurement?
50
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Appendix 2:Actual Usage of the Equipment
PE
ICT Equipment
MoW Canon normal
Photocopier
ir2318L.
Capacity
300 sheet universal paper
cassette, Up to 15 ppm copy
time.
Printer P2050d HP Up to 2000 pages per month,
Laser Jet
i.e. 66 pages per day.
Canon heavy duty
Photocopier ir
2020.
Current Usage
Secretary-Permanent Secretary
Office,
3 people
Standard: Copy, Print (UFR II), Secretary to PS, is
Scan, Up to 15 ppm, Color:
defective due to
8.9 Seconds, multiple copies
lack of service.
up to 1-999.
Printer P2050d HP Up to 2000 pages per month,
Laser Jet.
i.e. 66 pages per day.
Assistant DPP, but
not used. The
office has two
people.
HP Laser Jet
P4015x
Color laser jet and B&W,
21ppm, 600 by 600 dpi, recommended monthly volume
750 to 2000 pages, 3 trays,
automatic two sided printing,
Ethernet, wireless,
Assistant DPP, 2
people.
HP laser Jet
Printer P2015d
21ppm 600 by 600 dpi, recommended monthly volume
750 to 2000 pages, 3 trays,
automatic two sided printing,
MS windows 2000, xp professional, Ethernet, wireless,
Used by 2 people.
Office of Asst DPP.
Monochrome for A3, laser
technology, 32MB ram, Applicable OS MS windows 98/
ME/XP/Vista, scan once print
many, 300 sheet universal
paper cassette, one year warranty.
Directorate of Trade &
Marketing(DTM)
Monochrome for A3, laser
technology, 32MB ram, Applicable OS MS windows 98/
ME/XP/Vista, scan once print
many, 300 sheet universal
paper cassette, one year warranty.
PS-Directorate of
Trade & Marketing
(DTM)
MOIT Canon photocopier JR 2318L
(bought on April,
2011)
Canon photocopier JR 2318L
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
51
PE
ICT Equipment
MOIT HP LASERJET
PRINTER P2025DN
Current Usage
Up to 2000 pages per month,
i.e. 66 pages per day.
Used by 4 trade
officers,
Canon photocopier JR 2318L
(bought on April,
2011)
Copy speed 20cpm, paper
size A3 max, max duty cycle
120,000 copiers pm, i.e.4000
copies per day.
PS-Directorate of
Trade & Marketing
(DTM)
Photocopy Machine- Canon IR
3225N
standard dual-RAM, 512 MB
RAM + 256MB RAM (1GB RAM
+ 768MB RAM maximum),
Wireless LAN connectivity
option, print, scan, fax, copy,
USB media access, B&W and
Color, 600 x 600 dpi, 2 trays,
staple capacity, TFT touchscreen, 25 pages per minute.
Room 102-Permanent Secretary
Black and white up to 27 papers per minute, 128MB ram,
prints up to 15,000 pages
per month i.e. 500 pages per
day, fast Ethernet embedded print, usb 2.0 compatible
port.
4 Planning officers
to DPP office.
MHSW Desktop printer,
HP 2055dn (June
2011)
52
Capacity
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Appendix 3: Analysis of Capacity of Printers and Photocopies Available
in Procuring Entities
Ministry of Industry and Trade
Qty
Capacity
per Year
Period of
Usage by
Ministry
Number of
years
HP Printer LaserJet
CP2025
6
90,000
2010/2011
2
1,080,000
HP Printer COLOR laserjet
Cp2025
2
90,000
2010/2011
2
360,000
HP Printer laserjet P2055d
37
600,000
2010/2011
2
44,400,000
HP Printer laserjet 2055
22
600,000
2010/2011
2
26,400,000
HP Printer laserjet 4015D
1
138,600
2010/2011
2
277,200
Canon normal Photocopier
ir2318L.
2
1,440,000 2010/2011
2
5,760,000
Photocopy Machine- Canon
IR 3225N
1
2,160,000 2010/2011
2
4,320,000
Type
Total paper consumption
for printers and photocopiers
Paper Consuption up to
June 2012
82,597,200
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
53
Ministry of Health and Social Welfare
Type
Qty
Capacity
per Year
Period of
Usage by
Ministry
NumPaper Conber of suption up to
years
June 2012
PHOCOCOPY MACHINE
CANON D 420
4
2,649,600
2007/2008
3
31,795,200
PHOCOCOPY MACHINE
CANON, HEAVY DUTY IR
2018
2
2,073,600
2007/2008
3
12,441,600
PHOCOCOPY MACHINE
CANON IR 2018
3
2,073,600
2007/2008
3
18,662,400
PHOTOCOPIER KM 2550
KYOCERA ECOSVS F5118M
FP
4
2,976,000
2007/2008
3
35,712,000
HP PRINTER INKJET 2600
1
850,600
2007/2008
3
2,551,800
HP PRINTER LJ 4050
4
780,000
2007/08
3
9,360,000
HP PRINTER LJ 2015
14
598,400
2007/08
3
25,132,800
HP PRINTER LJ P2055N
22
260,000
2007/08
3
17,160,000
HP PRINTER LJ COLOR
SPHERE
1
420,400
2007/08
3
1,261,200
HP PRINTER LJ 1300
7
120,000
2007/08
3
2,520,000
HP PRINTER LJ 1600,
COLOR & B/W
1
240,000
2007/08
3
720,000
HP PRINTER LJ H/DUTY
4700
1
1,400,000
2007/08
3
4,200,000
HP PRINTER LJ 4100N
2
120,000
2008/2009
3
720,000
HP PRINTER LJ 2015
13
180,000
2008/09
3
7,020,000
HP PRINTER LJ P2055N
17
600,000
2009/2010
3
30,600,000
HP PRINTER LJ COLOR
2600N
3
806,400
2009/10
3
7,257,600
HP PRINTER LJ P2055N
7
600,000
2010/2011
2
8,400,000
HP PRINTER LJ P2055N
1
600,000
2011/2012
1
600,000
HP 400 COLOR PRINTER, M
451 SERIES
7
480,000
2011/2012
1
3,360,000
TOTAL
54
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
219,474,600
Ministry of Water
Paper
Consuption
up to June
2012
Qty
Capacity
per Year
Period of
Usage by
Ministry
Number
of years
HP PRINTER H/DUTY
TYPE COLOR LJ-CP 4525
6
1,440,000
2009/10
3
25,920,000
HP PRINTER LJ P2055N
22
600,000
2009/10
3
39,600,000
Type
0
FSD PRINTER BROTHER
–HL 3040CN
1
360,000
2009/10
3
1,080,000
0
HP COLOR PRINTER
CP4025
1
1,200,000 2010/2011
2
2,400,000
HP PRINTER H/DUTY
TYPE COLOR LJ-CP 4525
1
1,440,000 2011/2012
1
1,440,000
HP PRINTER LJ P2055N
1
600,000 2011/2012
1
600,000
PHOTOCOPY MACHINEIMAGE CLASS D 1180
1
675,000
3
2,025,000
PHOTOCOPY MACHINE
CANON MF7460
1
742,500 2011/2012
2
1,485,000
H/DUTY PHOTOCOPIER
CANON IR 2018
2
2,073,600 2010/2011
3
12,441,600
2009/10
86,991,600
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
55
Ministry of Home Affairs Photocopiers
Paper Consumption
capacity
Financial
Year
Paper
Consumption up to
2011/2012
Type
Qty
PHOTOCOPY MACHINE, KYOCERA
KM 4050
2
1,800,000 COPIES
PER MONTH
2011/2012
3,600,000
photocopier
CANON, D 1350
1
1,512,000 COPIES
PER YEAR
2011/2012
1,512,000
CANON PHOTOCOPIER IMAGE
RUNNER 2520
1
Copy, prints, and
scans as well. It
copies/ prints/scan
864,000 per year
2011/2012
864,000
CANON PHOTOCOPIER, Model:
iR 2020
2
Copy, prints, and
scans as well. It
copies/ prints/scan
864,000 per year
2011/2012
1,728,000
CANON PHOTOCOPIER, Model:
iR 2022
1
792,000 copies on
average per year
2011/2012
792,000
PHOTOCOPIER
SHARP AR-53200
1
480,000 papers per
year
2011/2012
480,000
PHOTOCOPY
MACHINE, SHARP
- 5127, Multifunction
1
1,800,000 COPIES
PER MONTH
2011/2012
1,800,000
PHOTOCOPY MACHINE, KYOCERA
KM 4050
1
1,800,000 COPIES
PER MONTH
2011/2012
1,800,000
TOTAL
56
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
12,576,000
Printers
Type
Quantiy
Average Paper Consumption Capacity
Financial
Year
Paper
Consumption up to
2011/2012
HP LaserJet
P2015
28
180,000 PAPER PRINT
CAPACITY PER YEAR
2011/2012
5,040,000
PRINTER, KYOCERA, FS 2020D
2
630,000 PRINTS PER
YEAR
2011/2012
1,260,000
KODAK 140,
Small
1
151,000 PRINTS PER
YEAR
2011/2012
151,000
HP, LASERJET
P1005
1
302,400 PRINTS PER
YEAR
2011/2012
302,000
PRINTER - KYOCERA, PS 1920
7
151,000 PRINTS PER
YEAR
2011/2012
1,057,000
HP LASERJET
1320
3
302,400 PRINTS PER
YEAR
2011/2012
907,200
BROTHER MFC
7220, FAX,
PRINT, COPY
1
432,000 PRINTS/COPIES
PER YEAR
2011/2012
432,000
Maximum yearly volume
is 600,000 pages.
2011/2012
1,200,000
HP LASERJET P2055d
2
PRINTER, HP
P2014
1
120,000 PAPER PRINTS
PER YEAR
2011/2012
120,000
PRINTER, Epson
FS - 4000DN
2
324,000 PER YEAR
2011/2012
648,000
TOTAL
11,117,200
Total paper consumption capacity for printers and photocopiers for MoHA for
3 years is 23,693,200.
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
57
Paper Consumption in PEs
Period
2009/10
2010/11
2011/12
TOTAL
Paper Consumption per Ministry
MOHSW
MOHA
MOW
1,025,000
433,000,000 1,114,000
556,000
358,250,000 1,372,500
716,500
543,500,000 1,248,500
2,297,500
1,334,750 3,735,000
MOIT
1,067,500
1,235,500
1275500
3,578,500
Capacity of Printers and Photocopiers Against Amount of Paper Used from July
2009 to June 2012
Procuring Entities
Ministry of Health and
Social Welfare
Industry Trade and Marketing
Ministry of Home Affairs
Ministry of Water
58
Combined Paper
Consumption Capacity of Printers and
photocopiers machines
% usage
Amount of
of Printpaper used
ers
219,474,600
2,297,500 1.40%
82,597,200
3,578,500 4.33%
1,334,750 5.63%
3,735,000 4.29%
23,693,200
86,991,600
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Appendix 4: Table for price comparison between GPSA and PEs for
the first half of 2012/2013
Year
PE
I C T Specification
Equipm e n t
Procured
Price
Unit
per Price from Market PricGPSA
es of Items
2012/13
MoW
Scanner
HP 5590
L635-12F/core
i3-370M, 2.4
GHz/4GB/320GBGB,
dvd rw, webcam,
wifi, one year warranty
1,070,000/-
811,400/-
869,400/-
MoHA
Scanner
HP scan
Jet 5590
Flatbed, ADF, UP TO
2400 dpi, daily duty
cycle up to 500
pages per day, 1
ethernet;1 hi-speed
usb 2 connectivity
std, 1 year warranty.
650,000/-
811,400/-
869,400/-/
Desktop
computer
HP Elite
6200MT,
2,450,000/- 2,053,800/-
2,101,050/-
Photocopier ir
2318
2,549,998.88 3,823,200/-
3,531,600/-
Photocopier ir
2530
14,410,000/- 7,788,000/-
9,156,000/-
MOIT
Dell
Latitude
laptop
computer
MT 990, OS window
7, inter duo processor, P8600, 15.6
inch high definition,
4GB DDR2, 250GB
HD, webcam.
2,600,000 2,440,200/-
2,334,500/-
MoHSW
Dell
Latitude
E 6220
Laptop
computer
OS window 7,
inter duo processor,
P8600, 15.6 inch
high definition, 4GB
DDR2, 250GB HD,
webcam, 1 year
warranty.
3,500,000/- 2,826,600/-
3,034,850/-
Scanner
HP 5590
990,000
811,400/-
869,400/-
Printer
HP 2055D
990,000
502,300/- 749,857.50/-
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
59
Appendix 5:Showing composition of Inspection and Acceptance
Committee and the qualifications based on ICT equipment
procured and delivered.
PE
Background qualification
Period
(MoW)-Inspection and
Acceptance
Committee
was appointed each time
the
goods
are
delivered.
ICT, ICT, PMU, DWR
19/4/2010
ICT, PMU, DCWSS, DCWSS
15/8/2009
ICT, ICT, PMU, DWR
2/11/2009
ICT-MISU, PMU, DCWSS, DCWSS
15/7/2009
MISU-ICT, PMU, DCWSS, DCWSS
22/8/2009
ICT, HYDROLOGIST, ICT, PMU
27/10/2009
ICT, PMU
22/8/2009
ICT, PMU, DCWSS, DCWSS
15/8/2009
ICT, PMU, DCWSS, DCWSS
15/8/2009
MoHA – Inspection
team
was
appointed to
serve a certain period
of time
Administrative Officer
7/9/2011-6/9/2012
Administrative Officer
7/9/2011-6/9/2012
Legal officer
7/9/2011-6/9/2012
Administrative Officer
7/9/2011-6/9/2012
(MOIT)
Human Resources Officer
6//2011 – 5/6/2014
Inspection
team
was
appointed to
serve a certain period
of time
Accountant
6//2011 – 5/6/2014
Computer Systems Analyst
6//2011 – 5/6/2014
Internal Auditor II
6//2011 – 5/6/2014
External Aid Coordinator
6//2011 – 5/6/2014
60
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
(MoHSW)
Senior administrative officer
29/11/2012
2 social welfare officers
29/11/2012
Principal admin officer
29/11/2012
Public health secretary
29/11/2012
Public health officer
29/11/2012
Legal officer
29/11/2012
Information officer
29/11/2012
Architect
29/11/2012
Principal statistician
29/11/2012
Administrative officer-HQ
29/11/2012
Administrative officer-CMO (2)
29/11/2012
Pharmacist
29/11/2012
Accountants-4
29/11/2012
Medical doctors-2
29/11/2012
Nurses-2
29/11/2012
2Computer system analyst
29/11/2012
Source: Information from the sampled PEs
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
61
Appendix 6:Poor Performance of Suppliers
M/S Agumba Technologies signed a contract35 to supply computers and
other office equipment on October 2009 to deliver the goods twelve
weeks after the signing of the contract, Agumba did not deliver the
goods and PEs wrote a letter36 on 23rd February to remind them on the
issue, Agumba replied on the same issue with a letter reference number
AG/CONTRACT/VOL.V1/59/2010 stating that they won’t be able to
deliver until April 2010. Auditors were not able to see the delivery note
to verify the delivery of the said equipment.
The same supplier was contracted by Ministry of Industry and trade
on 14 April 2010 to procure ICT equipment. This shows that there was
inadequate evaluation and screening of suppliers by PE. PEs have not
been adequately evaluating the previous performance of Suppliers with
references from other PEs.
35
36
62
Contract No ME -011/2007-08/G/06 Signed between M/S Agumba Computers Ltd and the Ministry of Water.
Letter with reference number CAB.68/544/04.
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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
63
1 . D e velop
a
National
Procurement Policy;
RESPONSIBITIES
Public Procurement
Policy
and
strategy
developed and
implemented
by June, 2012.
The
budgeted
amount was Tsh
3,210,681,700/=
A m o u n t
spent was Tsh
3,570,853,000
/=
Public
Procurement
Policy
Committee
was
established
and two meeting for Public
Procurement
Policy formulation
were
conducted.
Tsh.
3,054,473,389
3,617,303,000/-
Amount budgeted was;
Amount spent
Review
of
Procurement
Policy and Establishment of
Advisory Committee
Pr o c u r e m e n t
Policy and Strategy developed
and implemented by June 2012
2010/2011
2010/2011
2009/2010
2009/2010
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
Appendix 7:PPD Planned Activities Against Implementations
Tsh
158,277,500
Pr o c u r e m e n t
Policy
and
strategy
developed
and
implemented
by june 2012
2011/2012
Planned
activity and
Budgeted
Nine
committee
meetings
were
conducted, actual expenditure
was
147,858,105/=
2011/12
Actual implementation and
budget
Draft policy was issued in December
2012, a nd it was
forwarded to different stakeholders for comments
The total amount
spent
on
this
activity
was
6,773,184,494/=
Result to date
64
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
2.Review
procurement policies, regulations,
circulars
and other
related
directives
with
a
view of
updating
the
same; RESPONSIBITIES
125,050,000/-
Pr o c u r e m e n t
standards
for
Public
bodies
developed
by
June, 2012.
112,656,732/-
In implementing this target
one stakeholders
meeting
was conducted.
88,870,000
budgeted
Pr o c u r e m e n t
Standards for
Public bodies
developed by
June 2012.
2011/12
Actual implementation and
budget
64
The amount spent
to date was e Tsh
228,377,484/=
In this activity
the procurement
standards
were
not developed to
date.
According
to interviews with
PPD the amount
were used to review procurement
acts, but there
were no evidence
to support the said
activity, and the
actual usage of the
amount were not
evidenced by auditors.
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Quarterly
stakeholders
meeting was
in process.
2011/2012
Planned
activity and
Budgeted
Conducted
activity not mentioned in the performance report
but the expen65,866,890
diture was Tshs.
was was used
57,190,000/- 49,853,862.48/
was budgeted
Pr o c u r e m e n t
Standards
for
Public bodies developed by June
2012.
2010/2011
2010/2011
2009/2010
2009/2010
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
65
3.To build
capacity
of
procurement and
supplies
staff.
RESPONSIBITIES
No
activity which were
conducted
concerning the
capacity building
Pr o c u r e m e n t
cadre
established by June
2012
198,670,000/-
Amount
geted
2011/12
Actual implementation and
budget
The
amount
spent to date was
Tsh.316,727,445/=
Result to date
65
.TOR’s for development of the
procurement units
structure in the
public sector were
developed
.TOR to engage a
consultant to develop a training
need assessment
were developed
This activity is not
yet undertaken by
the
Ministry,the
verified
activity
Amount spent was which were done
196,234,245.91/- was
Training
needs
assessment study
for procurement
supply staff in
the Government
bud- sector was in Process
Pr o c u r e m e n t
cadre established by June
2012
2011/2012
Planned
activity and
Budgeted
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Training needs
assessment
study for procurement
supply staff in
Amount budget- the GovernAmount budgeted was
ment sector
ed
amount spent
was in Process
135,500,000/was
22,890,000
A m o u n t
16,307,000/spent
was
104,186,200/-
Develop
and
manage procurement and supplies cadre by
June 2012
2010/2011
2010/2011
2009/2010
2009/2010
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
66
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
4.Monitor
and implementation of
Public
Procurement Policies. RESPONSIBITIES
104,800,000/
data base for
Public
Procurement and
Supplies Staff
have been developed
and
maintained.
A m o u n t
Amount budget- spent
was
ed was
98,530,420/-
Monitoring
and evaluation
framework for
procurement
policy and strategy established
by June 2012.
There is no Monitoring and evaluation f framework in
place up to date,
Result to date
Amount
was
66
The amount spent
spent up to the period
of audit was Tsh
164,710.831/
37,049,340/-
Reviewing
and
updating
database information
related to procurement issues.
2011/12
Actual implementation and
budget
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
Reviewing and
updating database information related to
procurement
issues.
2011/2012
Planned
activity and
Budgeted
Monitoring
and evaluation
frame work for
procurement
policy
strategy and capacity building by
Amount spent June 2012.
Amount budget- was
ed was
Amount bud29,131,071/- geted was
36,898,000/39,120,000/-
Monitoring and
evaluation frame
work for procurement policy
strategy and capacity building
by June 2012.
2010/2011
2010/2011
2009/2010
2009/2010
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
67
NOT DONE
5.develop NOT DONE
advisory
mechan i s m s
that will
assist in
the
establishment and
maintenance of
public
procurement policy; NOT DONE
2010/2011
2009/2010
2009/2010
NOT DONE
2011/2012
Planned
activity and
Budgeted
NOT DONE
2011/12
Actual implementation and
budget
67
In 2010 a committee for the policy
development was
established ,
There is no advisory mechanism in
place up to date,
the reason is that
the absence of a
policy
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
2010/2011
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
RESPONSIBITIES
68
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
To coordi- NOT DONE
nate the
development of
procurem e n t
system
standards
that shall
be implemented
by public
bodies
NOT DONE
2010/2011
2009/2010
2009/2010
NOT DONE
2011/2012
Planned
activity and
Budgeted
NOT DONE
2011/12
Actual implementation and
budget
68
This activity was
not given priority by the Ministry
as it was not even
budgeted for.
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
2010/2011
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
RESPONSIBITIES
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
69
7.conduct
research
and other
studies
on public
procurement and
advise,
NOT DONE
6 . c a r r y NOT DONE
out studies
to
identify
areas required to
strengthen
procurement
and monitor their
implementation
NOT DONE
2010/2011
2009/2010
2009/2010
NOT DONE
2011/2012
Planned
activity and
Budgeted
NOT DONE
2011/12
Actual implementation and
budget
69
This activity has
not been given priority as it has never been budgeted
for nor planned
in the ministerial
plans
This activity has
not been given priority as it has never been budgeted
for nor planned
in the ministerial
plans
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
2010/2011
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
RESPONSIBITIES
70
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
NOT DONE
9.harNOT DONE
monize
public
procurement
systems
in the
country
and monitor their
implementation;
10.moni- NOT DONE
tor
and
evaluate
performance
of public
procurem e n t
institutions.
NOT DONE
NOT DONE
2010/2011
2009/2010
2009/2010
NOT DONE
NOT DONE
2011/2012
Planned
activity and
Budgeted
NOT DONE
NOT DONE
2011/12
Actual implementation and
budget
70
This activity has
not been given priority as it has never been budgeted
for nor planned
in the ministerial
plans
This activity has
not been given priority as it has never been budgeted
for nor planned
in the ministerial
plans
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
NOT DONE
2010/2011
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
RESPONSIBITIES
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
71
NOT DONE
11.devel- NOT DONE
op capacity struct u r e ,
human
resources
and succession
plans for
procurement and
supplies
Staff
NOT DONE
2010/2011
2009/2010
2009/2010
NOT DONE
2011/2012
Planned
activity and
Budgeted
NOT DONE
2011/12
Actual implementation and
budget
71
This activity has
not been given priority as it has never been budgeted
for nor planned
in the ministerial
plans
Result to date
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
NOT DONE
2010/2011
Planned activity Actual impleand Budgeted
mentation
and budget
Planned activity Actual impleand Budgeted
mentation
and budget
RESPONSIBITIES
Controler & Auditor General
Samora Avenue / Ohio Street
P.O.Box 9080,
Dar Es Salaam
Tanzania
Telephone: +255 22 2115157/8
Fax: +255 22 2117527
E-mail: ocag@nao.go.tz
Website: http://www.nao.go.tz