House team reacts to donor ‘refund’ demand

Donors’ demand that the money they gave in aid of the Local Governments Reform Project be returned to them shows how serious the issue of public funds mismanagement in the district councils is, the chairman of the Local Governments Accounts Committee, Rajab Mbarouk Mohammed has said.

Speaking to The Citizen in an interview yesterday Mr Mohammed (Ole-CUF) said embezzlement in local governments has reached a critical stage and serious steps must be taken to check wanton pilferage of public funds.

And the main problem, he notes, is that there is no political will to deal with the problem, despite the controller and auditor general (CAG) reports indicating that billions of shillings are lost every year due to misappropriation.

“Everyone complains about rampant theft of funds in local governments. The President is complaining about it, the Prime Minister is complaining, the minister responsible is complaining about it. This is the main problem and our efforts to pressure the government to take stern disciplinary measures against known culprits have been in vain,” Mr Mohammed noted.

He added: “I understand donors’ concerns… we share them; it is high time something was done. Why is it that no development project is implemented in local governments without problems?”

His reaction comes only days after six donor countries demanded that the government gives back more than Sh600 million stolen by officials under the Local Government Reform Programme (LGRP) Phase II. 

Sweden, Finland, the Netherlands, Ireland, Japan and Germany have jointly written to the ministry of Finance asking for the refund.In total, these countries donated 16 million euros (nearly Sh35bn) from 2009 to 2012 to fund the roll-out of the second phase of the five-year programme, which has a budget of Sh66.6 billion.

They say the money was pilfered by corrupt government officials charged with implementing LGRP II through paying themselves per diems and funding the purchase of expensive vehicles. Mr Mohammed yesterday said the problem with donor funds started with the LGRP I, when countries funding the programme withheld further aid because of misuse of vehicles.

“Donors gave 60 vehicles for an internal audit project under LGRP I, but these were misused and did not serve the purpose and donors stopped giving any more vehicles as they had planned. In all, about 160 vehicles were in the pipeline,” Mr Mohammed noted.

The Parliamentary Committee plans to table a report in the next sitting scheduled for December on the financial management of local governments in the country.

“In our report in Parliament next month, we will address donor concerns. We are aware that in the first quarter of the financial year 2013/14, only 30 per cent of the promised aid has been released. This is serious,” Mr Mohammed said.

In addition to demanding their money back, donors have also launched their own investigations.

“Payments to the support programme have been suspended and the programme will be terminated once the last investigations are completed in 2014,” Finland’s head of the Unit for Eastern and Western Africa, Ms Helena Airaksinen, said in a statement posted on the country’s website at the weekend.

Ms Airaksinen added: “We don’t approve any misuse of funds, therefore the issue will be investigated thoroughly. However, the people who suffer the most are ordinary Tanzanians who need the basic services provided by municipalities.”  

She described the case as “very regrettable” but went on to say that it proves that monitoring works. According to the Finnish official, donors will commission one more special audit that concentrates on operations in 2012–2013 and will audit the large purchases made.

The Swedish Deputy Head of Mission Maria van Berlekom said the use of donor funds for the LGRP II was frozen early this year.

While she did not reveal how much her country was demanding, she said Swedish support covered the period up to June 2013.

Ms Berlekom, who heads the Development Cooperation Division at the embassy, said the donor countries would file individual letters of demand after a response from the government.
Source: The Citizen, reported from Dar es Salaam, Tanzania
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