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
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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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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 A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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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 iv
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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
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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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24 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
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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.
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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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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 A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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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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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 A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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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
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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
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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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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
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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 10
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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; A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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• 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; A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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• 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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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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) A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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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 A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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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• 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 18
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. 20
A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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. A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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CHAPTER THREE ASSESMENT OF NEEDS, COST CONTROL AND QUALITY CONTROL 3.1 Introduction 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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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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
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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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A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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
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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
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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
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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
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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.
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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.
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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.
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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
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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
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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 5.1 Monitoring 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
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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
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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.
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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.
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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
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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
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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.
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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
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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:
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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.
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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
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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.
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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
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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?
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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
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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)
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Capacity
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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
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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. A REPORT OF THE CONTROLLER AND AUDITOR GENERAL OF THE UNITED REPUBLIC OF TANZANIA
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:
[email protected] Website: http://www.nao.go.tz
