VOTE 52
MANAGEMENT RESPONSES AND ACTION PLANS TO IMPLEMET THE CONTROLLER AND AUDITOR GENERAL’S AUDIT REPORT FOR THE FINANCIAL YEAR 2010/11
PARA / Auditor observations and recommendation / Management response / Intended Remedial Action / Time Frame2.1 / PREVIOUS YEAR S’AUDIT FINDINGS
2.2.11.1 2007/08 / Improperly vouched and unvoiced expenditure Tshs. 17,205,400
Recommendations
Management should strengthen the Internal Control over documentation and track the missing documents / The outstanding balance relates to interns doctor`s allowance, The Ministry has certified for audit that all interns sent to the Selian, CEDHA, Bugando and RMO Dodoma have completed their internship and employed by the Government.
So far the relevant documents have already submitted and verified. / (i)Centralize the accounting function and make all Accountants report to the Chief Accountant and improved the flow of documents
(ii)Construction of special office for the storage of all accounting and
procurement documents
(iii) To continue shift old documents to the new storeroom.
To circulate circular to inform all recipients of payment to acknowledge all payments paid to them. / June 2012
2.2.6.1
2008/09 / Arrears of revenue Tshs. 7,175,500
Recommendations
Management should improve collection of training fees and the amount shouldbe collected and evidence of collection should be submitted for audit verification / Most of the students who proved to come from very poor families were waived to pay fees during their training period on condition that the amount outstanding will be deducted from their salaries once they are employed.
Currently, the said arrears have been recovered and submitted to auditor for verification. / (i) The outstanding amount will be deducted from their salaries once they are employed
(ii)To insists students to pay their training fees on time. / N/A
2.2.10
2008/09 / IT environment
Recommendations
Management in collaboration with other government institutions should make sure that IT Strategic and its committee are in place as to cope with changes in technology and sharing experience with other nations. / The Ministry of Health and Social (MOHSW) recognize that ICT has a strong potential to reduce cost, increase access, improve data flow and sharing information, as well as expand services parallel to promoting quality health care. The ICT Steering Committee of 25 members was formed, which comprise key players in the health sector. Among other roles of this committee is to ensure e-Health Strategic plan is developed and is operational. The process of formulating e-Health strategic plan started since January 2009 and several stakeholders’ meeting and workshops have been conducted to get their inputs and opinions. Hence the ICT Steering committee is in place and operational at MOHSW.
So far the first draft of e-Health strategic plan is in place. But we should agree the fact that formulation of ICT strategic document is a long process and very dynamic task. Because ICT is a cross cutting issue and it involves many key actors. Therefore the draft document before being approved is passing through several hands; such as Ministry of Communication, Science and Technology, e-Government organ, Tanzania Communication Regulatory Authority, COSTECH, SWAPs; to mentioned a few. However, we expect this document to be finalized and endorsed by June 2011 and ready for implementation from July 2011.
Moreover, for several years many initiatives regarding on utilization of IT systems in health sector have been implemented; and more are still coming. IT systems which are operational include;District Health Information systems (DHIS), Integrated Financial Management System (IFMS), Surveillance data system, m-health, electronic medical records and laboratory systems in hospital. While new IT systems which are about to take off include; telemedicine, e-learning, filling system, car tracking system, human resource management etc.
Therefore not having now in place the strategic plan document does mean the Ministry is doing nothing regarding on the utilization of ICT resources. But we acknowledge that, so far we don’t have yet a common instrument (Strategy document) to be used in harmonizing various ICT systems to avoid duplication of efforts, reduce time and cost. To overcome these challenges the ICT steering committee and other stakeholders are working hard to ensure the strategic plan is in place as soon as possible. Final draft has already submitted to auditor for verification. / To finalize the e- Health in Tanzania-
National strategy. / December 2012
2.2.11.2
2008/09 / Salaries paid to retired, deceased and absconded employees Tshs.77,707,817 / (i)For those who died, Ministry filed loss report ref. no. CAB.238/457/2 in respect of deceased personnel. Ministry waiting for parliamentary approves to adjust the books.
(ii)For the retired and absconded employees, Deduction of the related sum has started to be realized from pensioner’s funds. PSPF and NSSF confirmed to deduct the amount from the defaulters. So far confirmed figure amount to Shs, 2.5 million. The remaining amount will continue to be deducted each time their retirement benefits are paid. / (i) Promptly delete all retired staff after confirm their retirement.
(ii) The management will strengthen the internal control system and ensure close follow up on the repayment of the remaining balance. / June 2013
2.2.18
2008/09 / Risk management
Recommendations
The Ministry should speed up the process of establishing risk management policy, plan and register / Management has already identified risk areas through questionnaires and management workshop. Consultant has been engaged in each major area of risk to come up with a policy and a plan on risk management.
TOR for preparation and initial implementation of the ministry of Health and Social Welfare risk management frame work has been submitted to Audit for verification.
The risks register will then be developed. / To speed up the process. / June 2012
2.2.11.1
2009/10 / Funds transferred to the Health Sector Development Project without approval from Treasury Shs. 3,083,400,000
Recommendation
Management should seek retrospective approval from the Treasury. / The Ministry has requested for retrospective approval from MOF as recommended by CAG through letter ref no. BC.209/608/01/55 dated 16/5/11 and the treasury replied through letter no. EB/AG/159/04/Vol.II/49 dated 9/9/11. The treasury advice is to communicate with the PPRA to see whether procurement regulations were duly followed. PPRA has already provided advice through letter No. PPRA/ME/007/’’C’’/56 dated 03rd November, 2011. All references have been submitted to the Audit Department. / In future the management will apply for reallocation before executing payments / N/A
2.2.11.2 / Unsupported Medical treatment bills Shs. 32,579,904
Recommendation
Management is required to account for the paid amounts. In addition, Management should strengthen the records management to ensure the availability of documents for supporting payments when requested. / It is true that at the closure of the financial year, there was a balance of Shs. 32,579,904 in the special account for patient treated abroad. At that time patients who were approved to go for treatment were not yet completed VISA and Passport procedures. However after finalizing all procedures, they went for treatment abroad. A list and documents related to the amount in question has been verified by Auditor / (i) Ministry to ensure that approval is granted only to those patients who are in a position to travel abroad.
(ii) Patients who are granted permission to go for treatment abroad will be informed early, so that they can finalize all travelling procedures earlier. / June 2012
2.2.11.3 / Improperly – Vouched expenditure Shs. 3,391,200
Recommendations
Supporting documents should be submitted for audit. / Supporting documents of Tsh 3,391,200 have already been submitted to auditor for audit verification. / To continue shift old documents to the new storeroom as a result to have enough space for recently documents / By June 2012
2.2.11.4 / Expenditure charged to wrong account codes Shs. 3,894,809,820
Recommendation
The management should obtain retrospective approval from Ministry of Finance and Economic Affairs. / -Letter has been sent to MOF seeking retrospective approval on using different expenditure codes to pay for accumulated medical suppliers debts at MSD
Ministry receives funds on 29th June, 2010 and we were supposed to re-allocate to avoid un utilized of funds. However application for reallocation within vote was made to MOF. / In future the management will apply for reallocation before executing payments. / N/A
2.2.11.5 / Questionable Transfers Shs. 1,968,475,931
RecommendationManagement should strengthen internal control over public funds to ensure that the public expenditures are properly controlled.
-Full accountability of the funds with detailed analysis and the construction contracts should be submitted for audit scrutiny. / Retrospective approval regarding transfer of funds to NIMR has been requested from the Treasury via letter Ref. No. CA.4/500/01C/35 dated 3/5/11 and the MOF replied through letter Ref. No. EB/AG/159/04/Vol.II/47. The Ministry has instructed NIMR to submit expenditure statement showing fully accountability of the transferred amount. NIMR has submitted the report and is available for audit verification. / In future the management will apply for reallocation before executing payments / By June 2012
2.2.12.2 / Salaries paid to retired, deceased and absconded employees Tsh. 83,768,890
Recommendation
The Ministry in collaboration with the Treasury and President Office public Service should ensure that information from various stations for retirement, death and dismissal is properly dealt with by promptly deleting the individual names from the payroll. The wrongly paid salaries should be recovered from the respective individual’s terminal benefits otherwise legal actions should be taken to recover the respective amounts from the beneficiaries. / The Ministry has improved payroll management by training administration staff in Lawson (payroll soft ware) to enable them to timely update the Vote 52 payroll databases on newly employees retired resigned and promotion.
Letter ref. no. HEA/30/15/29 dated 10TH November, 2010 has been sent to PSPF and Treasury to deduct the same from the respective officer’s retirement benefits. / (i)The management will strengthen the internal control system on Payroll management.
(ii) Close follow up on the repayment of the remaining balance. / June 2013
2.2.0 / CURRENT YEAR S’AUDIT FINDINGS
2.2.4 / Assessment of internal control system
The Internal Control System in the Ministry of health and Social Welfare is general good. There is adequate segregation of duties in terms of authorization of transactions, record keeping system, reconciliation of bank accounts are being camed out by Central Paying System in the Treasury, the paid cheques kept in safe place and signed by two official and Ministry maintain fixed asset register. However, the following weakness was observed during the audit:-
- The Internal audit report inrespect to Ministry were not availed to the audit.
- The National Audit Office is not being informed in advance in respect of Audit Committee meetings Contrary to Public Finances Regulation Number 32(3).
- The Ministry purchases fixed assets but were not recorded into fixed assets register.
- There is weak control of the payment vouchers and supporting documents as are not kept properly and in strong custody.
The Ministry management should continue in strengthening Internal Control System. / The Ministry has done the following concerning the audit observation in internal control system
- All internal audit reports have been submitted to Auditors for audit purpose. These include quarterly and annual internal audit reports.
- Assets have been registered and submitted for audit purpose.
- All payment vouchers and supporting documents have been submitted for verification.
- The ministry has prepared a calendar for the Audit Committee meetings for this year 2011/2012 which has been distributed to all members. A copy of the calendar had been availed to the National Audit Office.
2.2.5.1 / Arrears of Revenue Shs.5, 505,000
Audit of the financial statements and the supporting schedules noted that an amount of Shs.5, 505,000 was reflected as arrears of revenue in respect of un-collected training fees as at 30th June, 2011
Recommendation
Management should improve collection of training fees and the amount collected be properly accounted for. / The ministry has improved collection of training fees by introducing training management system in training institutions and membership information system in all our professional council to easily track member who is in arrears in the annual fees.
now, the said arrears have been recovered and submitted to auditor for verification / To strengthen revenue collection management system. / By June 2012
2.2.6.2 / Non Submission of Contract Files
The Public Audit Act No. 11 of 2008 sect 15(2) requires the Accounting officer to ensure that the controller and Auditor General has access at all reasonable times to the documents of the audited relating to his functions and responsibilities. Also Para 43 of Public Audit Regulation of 2009 which state that, the Controller and Auditor General shall have unrestricted power to access and retain information from any person, authority or body when in his opinion such information is necessary for the performance of his function. Contrary to the above quoted legislations management failed to submit contract agreement and Evaluation documents of the under mentioned contracts although requested for audit purposes.
Recommendation
The management should comply with the Public Audit Act No. 11 of 2008 and Public Audit Regulation of 2009 by submitting the Contract documents file for Audit review. / The remaining contract agreement have now been submitted for audit verification / To adhere to the Public Audit Act No. 11 of 2008 sect 15(2) and Para 43 of Public Audit Regulation of 2009. / By June 2012
2.2.6.3 / Missing contract agreement on Rehabilitation of Ministry Headquarter Shs.43, 790,199
A sum of Shs.43,790,199 was paid as addendum to M/S Mzenzi Contractors vide contract number ME/007/2009/10/HQ/10/283 for plumbing and Engineering installation in Ministry of Health headquarter office However, the following irregularities were noted:-
- There was no contract agreement between the Ministry and the National Housing Co-operation on the rehabilitation of the building.
- Completion of rehabilitation of the building was not confirmed
Management should confirm that proper procurements procedures onrehabilitation of Ministry Headquarters worth Shs.43,790,199 werefollowed by submitting contract agreement to auditors for scrutiny / The Contract between MoHSW and NHC has a clause that allows the Ministry to undergo minor works. Procedures in rehabilitating the MoHSW was adhere to the part.
Ministry is waiting for the Management of the NHC to certify the work and after that, to deduct the same from the rent. The Contract has been submitted and verified by Auditor. / (i) Ministry to ensure that all documents are well kept pending audit process.
(ii) Ministry to ensure that NHC speed up the certification process. / June 2013
2.7.1 / Unconfirmed Cheques Collection Shs. 704,255,562
Recommendation
Management should ensure that the established internal controls are effective and head of cash office frequently reconcile cash office records and take appropriate actions to improve cash management. / The Head of Cash office has instituted controls over cheques by insuring all cheques are issued to right persons and a dispatch book is duly signed. It was unfortunate that when the audit was conducted the dispatch book was yet to be signed. All cheques register book were signed and submitted to Auditors for verification / Maintain properly issue and sign the cheques’ dispatches.
2.8.2 / Cash and Cash equivalent balances not properly presented Shs.737,668,008
Statement of Cash flows of the Ministry of Health and Social Welfare as at 30th June, 2011 reported Shs. 733,658,627 and Shs. 4,009,381 cash balances to be surrounded to Holding account and Paymaster General respectively.
Recommendation
This ministry has communicated with Treasury to work on the Auditor recommendations to present cash and cash equivalents in the notes of descriptive notes. / Management has noted the Auditor’s recommendations. Treasury agreed that the template will change in the coming 2011/2012 Financial Statement. / The Management will ensure that the implementation is done according to the CAG proposal. / June 2012
2.8.3 / Cash balance In the deposit register understated by Shs.33,578,115
Recommendation
The Management should explain the difference noted above and make adjustment accordingly. / The Ministry has noted that the under stated amount in the Deposit Register was due to the item for Stale cheques. The necessary adjustment has made to deposit account and verified by auditors. / To ensure that Deposit register is reconciled every day. / June 2012
2.8.4 / Closing stock understated by Shs. 158,572,717
Recommendation
The Management should comply with International Public Sectors Accounting Standard and invite Auditors to attend the stock taking exercise at year end. / The stock taking report have been submitted to Auditors evidenced by name, date and signature of preparer and witness of the stock taking exercise as recommended by Auditors. / The Ministry to ensure that Auditors are invited to witness stocktaking during the stocktaking exercises. / June 2012
2.8.5 / Nugatory Expenditure Shs.31,900,906
During the year under audit the statement of losses of Public Money, Stores and claim abandoned for the year ended 30th June, 2011 disclosed nugatory expenditure for Shs.31,900,906 where by the Government did not receive any value from that expenditure.
Recommendation
Management should ensure that statutory contributions and deduction are paid on time so as to avoid unnecessary penalties. Management should also take action against the official who caused nugatory expenditure of Shs.31, 900,906. / The penalty for late submission of PSPF contributions resulted from delaying in effecting staff promotion in the ministry’s payroll..
However the reported loss has been registered and the loss report form has been prepared and submitted to the Treasury. We are waiting for final resolution by the Parliament to write off from our books. / (ii) Staff has been asked to ensure that they file their employment status immediately whenever changes appear, in order to help the management to act promptly.
(i) The ministry has improved its system by ensuring that payroll is adjusted immediately when staff is promoted, transferred, or new employees in engaged. / June 2012