THE UNITED REPUBLIC OF TANZANIA MINISTRY OF FINANCE PUBLIC FINANCIAL MANAGEMENT REFORM PROGRAMME (PFMRP PHASE IV)

Transcription

1 THE UNITED REPUBLIC OF TANZANIA MINISTRY OF FINANCE PUBLIC FINANCIAL MANAGEMENT REFORM PROGRAMME (PFMRP PHASE IV) ANNUAL PROGRESS REPORT FOR FY 2013/14 (PERIOD: JULY 2013 JUNE 2014) CONTACT: Permanent Secretary Ministry of Finance P.O. Box 9111 Dar es Salaam October, 2014 i

2 LIST OF ABBREVIATION AG CAG DSA FY ICT IPSAs LAAC LGAs JSC KRA MCA T MCC MDAs M&E MIS MKUKUTA MoF MTEF PAC PEFA PFMRP PMU PO-PC PO- PSM Attorney General Controller and Auditor General Debt Sustainability Analysis Financial Year Information & Communication Technology International Public Sector Accounting Standards Local Authority Accounts Committee Local Government Authorities Joint Steering Committee Key Result Area Millennium Challenge Account - Tanzania Millennium Challenge Cooperation Ministries, Departments and Agencies Monitoring and Evaluation Management Information System Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Tanzania Ministry of Finance Medium Term Framework Public Accounts Committee Public Framework for Assessment Public Financial Management Reform Program Procurement Management Unit President s Office Planning Commission President s Office Public Service Management ii

3 RSs SMTB TRA TRMIS TWG Regional Secretariat s Secretary for Ministerial Tender Board Tanzania Revenue Authority Treasury Registrar Management Information System Technical Working Group iii

4 Contents LIST OF ABBREVIATION...ii Contents...iv EXECUTIVE SUMMARY...vi CHAPTER ONE...1 INTRODUCTION Introduction...1 Report Layout...4 PROGRESS ON IMPLEMENTATION OF PLANNED ACTIVITIES FOR...5 ANNUAL IN FY 2013/ Highlights on Targets/Outputs and Implementation Status of Milestones as per M&E Result Framework... 5 Table 1: Cumulative Milestone Status for FY 2013/ KRA aachievements KRA 1: Revenue Management: KRA 2: ing and planning KRA 3: Execution, Accountability and Transparency KRA 4: Control and Oversight KRA 5: Change Management, Programme Monitoring and Communication...16 CHAPTER THREE...19 BUDGET EXECUTION Funds Disbursement and Release...19 iv

5 Table 3.1: Basket Funds Disbursement by Development Partners for July 2013-June Actual and Commitment...21 CHAPTER FOUR...25 CHALLENGES AND RECOMMENDATIONS...25 Annex Annex v

6 EXECUTIVE SUMMARY This report covers the period of the FY 2013/14 in the second year of PFMRP Phase IV implementation which was launched in June PFMRP Phase IV complements efforts to realize national policy objectives stated in Tanzania Development Vision 2025, Five Year Development Plan (FYDP) 2011/ /16 and MKUKUTA/MKUZA II by ensuring achievement of the following: (i) Economic growth and poverty reduction achieved through policy-based budget management and resource mobilization and allocation, improved fiscal discipline and sustainable budget balance; (ii) Service delivery improvement through the introduction of result-based management, program based budgets, accountability and performance audits; (iii) Good governance through improved transparency, accountability and efficient controls. PFMRP IV is designed to be an enabler towards enhancing revenue mobilization; improving planning and budgeting; ensuring transparency, accountability, efficiency and effectiveness in the use of resources and implementation will be through five Key Results Areas which are: Revenue management; and Planning; execution, Transparency and Accountability; Control and Oversight; and Change management, Program Monitoring and Communication. Table 1.1 gives a summary of KRA overview. The approved budget for FY 2013/14 is Tshs. 46,398,324,415 of which Tshs. 2,730,783,800 is Project fund, Tshs. 22,557,295,000 is Government fund and Tshs. 21,110,245,615 is Basket Fund. During the period actual expenditure and commitment amounted to Tshs. 34, 954,050,115/= being 120% of the total funds released. Actual expenditure and commitment by source was GoT Tshs. 17,066,528,000/= being 259% 1 of the released funds; Project Tshs. 2,616,895,000/= (100%) and Basket Funds Tshs. 15,270,627,115/= being 77% of the released funds. 1 Over and Commitment include commitment of GoT for construction NAO Headquarters in Dodoma three years ago and the full amount is yet to be released vi

7 In relation to procurement, by 30th June, 2014 total procurement amounted to Tshs. 12,753,580,000 equivalent to 49% of the total planned procurements had been at different stages of implementation. Postponed procurement activities amounted to Tshs. 1,225,000,000 related to ICT mapping, as such procurement proceedings could not be initiated because Action Plan for recommendations of the ICT mapping had not been developed. Procurement activities worth Tshs. 9,860,000,000 had their contract signed but their completion of which will be effected in 2014/15. Detailed information is displayed under Annex 3. The programme recorded fairly satisfactory progress whereby 50 milestones were achieved and 72 milestones were on track. In 2013 Joint Supervision Mission, 11 milestones were discussed and agreed as burning/quick wins milestones. Out of 11 burning/quick wins milestones, 2 were completely achieved, 5 on track and 4 planned to be implemented in FY 2014/15. A number of achievements were realized including presentation of A bill to enact Tax Administration Act for the purpose of establishing a common tax procedure among different taxes collected by Tanzania revenue authority (TRA) to Parliament for the first reading in June 2014, A review of the current system of tax exemptions was conducted in order to amend the value-added Tax (VAT) regime to be in line with international best practices. The bill for amendment was presented to Parliament for the first reading in June 2014; the study on LGA s own source revenue conducted and action plan developed, the study on ICT mapping was conducted and action plan developed to implement recommendations. Other achievements include collection, compilation and analysis of data for the trends of the direct project fund portfolio disbursed via exchequer system has been done, Chart of Accounts modified to accommodate program based budgeting and Asset Management (tracking) software installed, tested and users are trained on use of software. One of the most notable activities which was undertaken and completed during the period was the PEFA Study for the Central Government. The report revealed ssignificant improvement in PFM Systems since the 2010 PEFA assessment with a major influence of PFMRP. Out of 31 PIs, 12 ratings showed improvement, 5 were in the process of improving, 9 PIs had not changed and 2 had fallen. Weaknesses revealed in the PEFA study resulted into reviewing of the PFM M & E framework. A number of activities have been included in the budget for 2014/15 to address the above weaknesses. vii

8 CHAPTER ONE INTRODUCTION 1.0 Introduction PFMRP Phase IV which was launched two years ago in June 2012 aims at complementing efforts to achieve national policy objectives stated in Tanzania Development Vision 2025, Five Year Development Plan (FYDP) 2011/ /16 and MKUKUTA/MKUZA II by ensuring achievement of the following: a) Economic growth and poverty reduction achieved through policy-based budget management and resource mobilization and allocation, improved fiscal discipline and sustainable budget balance; b) Service delivery improvement through the introduction of result-based management, program based budgets, accountability and performance audits; c) Good governance through improved transparency, accountability and efficient controls. PFMRP IV is designed to be an enabler towards enhancing revenue mobilization, improving planning and budgeting; ensuring transparency; accountability; efficiency and effectiveness in the use of resources and implementation will be through five Key Results Areas which are: Revenue management; and Planning; execution, Transparency and Accountability; Control and Oversight; and Change management, Program Monitoring and Communication. Table 1.1 gives a summary of KRA overview. The Public Financial Management Reform Program is implemented in line with the on-going reforms in the Public Sector which aim at improved performance, efficiency and effectiveness in service delivery for sustainable economic growth. In doing so, PFMRP IV shall be: i. Comprehensive to include the various key reform activities in the PFM systems as well as the cross-cutting issues related to capacity building, improving infrastructure for service delivery, and reviewing the institutional policy and regulatory frameworks; 1

9 ii. Captured in a well-defined Monitoring and Evaluation framework, sequenced to manage priorities and ensure a more accurate cash forecasting and achievement of results; iii. Linked and inter-dependent with clear demarcation of responsibilities and accountability; iv. Better standardized and automated systems to ensure attainment of desired results in financial recording and reporting; v. Well managed, with effective institutional arrangement to support implementation of the programme; vi. Focused, aiming at supporting agencies and initiatives which are likely to have a great cross cutting impact on the PFM system. Table 1.1 KRA and components overview Key Result Area (KRA) Major Component, Department and KRA- TWG KRA 1: Revenue Management Leader: CPAD Focus: improving revenue forecasting and resources mobilization and 1. CPAD MoF reviewing & streamlining existing revenue policies, laws and regulations. 2. TR - MoF The intervention aims at developing appropriate model for revenue 3. PMO-RALG forecasting to improve cash flow forecasting to spending units. Also the KRA will continue to improve external resource management, review 4. External Finance - MoF retention schemes and enhance capacity for managing public investments. 5. MDAs KRA 2:Planning and ing Leader: BC Focus: improving macro-fiscal policy, planning, MTEF credibility, enhancing budget classification by adopting GFS 2001 and CoFoG standards, facilitate program based budgeting, broadening the scope of the chart of accounts, enhancing monitoring, reporting and accountability and review of the Medium Term Strategic Planning & ing Manual (MTSPBM) to enable the national development planning and budgeting system to articulate national policy priority targets with the desired institutional results. 1. CB MoF 2. CPAD MoF 3. PMO-RALG 2

10 KRA 3: Execution, Transparency and Accountability Leader: ACCGEN Focus: achieving greater predictability of resources to spending units; strengthening capacity on procurement, cash and debt management; and improving the scope and quality of financial recording and reporting KRA 4: Control and Oversight Leader: IAG Focus: strengthening capacity on audit functions (internal and external) as well as oversight function of the Parliament. The interventions involves providing technical guidance and capacity building to MDAs and LGAs in the areas of internal audit and to facilitate timely independent external examination of financial and performance auditing and report to the public 1. PPRA 2. PPPD 3. ACCGEN - MoF 4. CPAD - MoF 5. DGAM - MoF 1. IAG - MoF 2. NAO (and Parliament PACs) 3. TR KRA 5:Change Management Programme Monitoring and Communication Leader: DPD Focus: cross cutting issues including capacity building on change management, Monitoring and Evaluation, stakeholders communication, coordination and leadership for efficient and effective programme implementation. 1. DFMIS - MoF 2. GCU - MoF 3. DPD MoF 4. PMO RALG 5. ACGEN - MoF 6. DAHRM - MoF 7. Zanzibar 3

11 Report Layout This report is an annual report for FY 2013/14 implementation which dwells on progress made during its second year of implementation. It comprises of four chapters: Chapter one provides background information and introduction; Chapter two covers progress on implementation of the planned activities for a year (July 2013 June 2014); Chapter three reports the budget execution while Chapter four highlights on challenges and recommendations for next period of implementation. Annex 1 give detailed assessment of milestone status as at the end of June, 2014 based on M&E Framework for ; annex 2 gives a detailed of financial status per component as of June 2014 and Annex 3 provides Procurement Progress for the period in reference. 4

12 CHAPTER TWO PROGRESS ON IMPLEMENTATION OF PLANNED ACTIVITIES FOR ANNUAL IN FY 2013/14 It was during the period under review when the 2013 PEFA study was concluded. The study revealed weaknesses in some areas of PFM which needed to be addressed. The Joint Supervision held in September, 2013 took stock of the weaknesses and recommended for review of the milestones in the PFMRP IV strategy to incorporate new areas to address the weaknesses pointed out in the PEFA report. There is good progress to some milestones; the report highlights some milestones which needed to be reviewed. 2.1 Highlights on Targets/Outputs and Implementation Status of Milestones as per M&E Result Framework 157 milestones implementation have been assessed in this report. The milestones number has increased compared to the one s assessed in the mid-year report due to the fact that, in this annual report the burning issues/quick wins milestones discussed in September 2013 Joint Supervision Mission were considered for assessment. Some of the burning milestones have been implemented and achieved as per recommendation and some are set to be achieved in the next FY 2014/15. The table of the burning issues / quick wins milestones is attached on the report for quick reference. As displayed in Table 1 below indicating the overall cumulative statuses as at 30th June, 2014, there are milestones which have been achieved, others are on track, few are delayed and pending on their implementation and very few are at risk. The assessment shows that 50 milestones have been achieved (31.8%), 72 milestones are on track (45.9%), 14 milestones (8.9%) are pending, 14 (12.8%) milestones had been delayed for various reasons and 1 (0.6%) milestone was at risk on their implementation. To mention a few, milestones achieved include presentation of A bill to enact Tax Administration Act for the purpose of establishing a common tax procedure among 5

13 different taxes collected by Tanzania revenue authority (TRA) to Parliament for the first reading in June 2014, A review of the current system of tax exemptions was conducted in order to amend the value-added Tax (VAT) regime to be in line with international best practices. The bill for amendment was presented to Parliament for the first reading in June 2014; the study on LGA s own source revenue conducted and action plan developed, the study on ICT mapping was conducted and action plan developed to implement recommendations. Other achievements include collection, compilation and analysis of data for the trends of the direct project fund portfolio disbursed via exchequer system has been done, Chart of Accounts modified to accommodate program based budgeting and Asset Management (tracking) software installed, tested and users are trained on use of software. On track was recorded in more milestones which show that their implementation is aligned to the planned intervention set. The implementation of some milestones are set to be done in FY 2014/15, therefore their status is pending. Status of implementation of milestones per KRA as at 30 th June, 2014 is displayed in Table 1 below and the detailed information on each milestone is outlined in Annex 1. Table 1: Cumulative Milestone Status for FY 2013/14 KRA Achieved On Track Pending Delayed At Risk Total KRA KRA KRA KRA KRA TOTAL Percentage KRA aachievements KRA 1: Revenue Management: Objective: Strengthened systems, processes and procedures for improving the operational capability of the revenue collection by June

14 Output 1.2: The Government improves efficiency in domestic revenue mobilization both at the policy and the administration levels by updating legal instruments towards international best practices. Achievements include: 1) A bill to enact Tax Administration Act for the purpose of establishing a common tax procedure among different taxes collected by Tanzania revenue authority (TRA) was presented to Parliament for the first reading in June ) A review of the current system of tax exemptions was conducted in order to amend the value-added Tax (VAT) regime to be in line with international best practices. The bill for amendment was presented to Parliament for the first reading in June ) Analysis of the trends of the direct project fund portfolio disbursed via exchequer system published. Implementation Status of Milestones as Per M&E Result Framework As of June 2014, the implementation status on the milestones was recorded as follows: 6 milestones equivalent to (28.6%) were achieved, 6 milestones are on track of their implementation (28.6%), delayed on 6 milestones (28.6%) and 3 milestones (14.2%) are pending respectively. Above depicts schematic presentation of KRA 1 status as at June,

15 Component Name Sources of Fund Approved KEY RESULT AREA 1 Fund Released Total Commitment and % of expenditure against fund released % of expenditure against budget POLICY ANALYSIS DEPARTMENT GoT 100,000,000 53,700,000 52,700,000 98% 53% BF 228,000, ,000,000-0% 0% Project 56,597, % TOTAL FOR COMPONENT 384,597, ,700,000 52,700,000 19% 14% MINISTRY OF NATURAL RESOURCES BF 162,250, ,250, ,560, % 100% AND TOURISM TOTAL FOR COMPONENT 162,250, ,250, ,560, % 100% GoT 100,000, % EXTERNAL BF 379,060, ,060, ,398,980 80% 80% FINANCE Project 25,000,000 0% TOTAL FOR COMPONENT 504,060, ,060, ,398,980 80% 60% PMO-RALG GoT BF 600,930, ,930, ,430,000 72% 72% TOTAL FOR COMPONENT 600,930, ,930, ,430,000 72% 72% TOTAL KRA 1 1,651,837,600 1,423,940, ,089,950 67% 58% 2.2 KRA 2: ing and planning Objective: Strengthened capacity of planning and budget management, including results and program based budgeting, within MoF, MDAs and LGAs by June Output 2.1: Strengthened capacity of MDAs, RSs and LGAs in implementing program based budgeting by June Achievements include: Chart of accounts has been modified to accommodate PBB. PBB template developed and MoF organized a working session end of August 2013 with 8 pilot Ministries (Ministries of Finance, Water, Works, Transports, Education, Health, Community Development and Agriculture). The assignment to MDAs was to convert FY 13/14 budget into PBB format. Also, another session with the pilot Ministries was conducted in the fourth quarter and helped the sector ministries in validating their PBB templates 8

16 Output 2.2: Increased effective utilization of Planning and budgeting tools by 2016; achievements include: MTSPBM has been reviewed and the draft document has been produced The PER process has been strongly revitalized since June The PER Champion Group has had regular meetings on the on-going 5 studies and an annual dissemination workshop is planned for beginning of October Output 2.3: Strengthened capacity of LGAs for MTEF preparation by Achievements include The process of collecting, scrutinizing and submitting all LGAs own source budget information to National guideline Committee has successful been done. Implementation Status of Milestones as Per M&E Result Framework 23 milestones were assessed in KRA 2. Out of all milestones assessed, 4 (17.4%) milestones were achieved, 7 (30.4%) milestones being on track, 4 (17.4%) milestones are delayed and 8 (34.8%) milestones are pending. 9

17 Component Name Sources of Fund Approved KEY RESULT AREA 2 Fund Released Total Commitment and % of expenditure against fund released % of expenditure against budget GOVERNMENT GoT BUDGET 1,500,000, ,390, ,378,000 DIVISION BF 470,400, ,400, ,440,000 TOTAL FOR COMPONENT 1,970,400,000 1,019,790, ,818,000 GoT PMO-RALG BF 44,000,000 44,000,000 44,000,000 TOTAL FOR COMPONENT 44,000,000 44,000,000 44,000,000 TOTAL KRA 2 2,014,400,000 1,063,790, ,818,000 24% 9% 37% 37% 30% 16% 100% 100% 100% 100% 33% 17% 2.3 KRA 3: Execution, Accountability and Transparency Objective: Improved utilization of public resources in a more effective, efficient and transparent manner by June 2016 Output 3.1 Strengthened public sector procurement by June. Achievements include: New public procurement regulations prepared, signed and gazetted National Public Procurement Policy finalized. With the achievements observed in some milestones, the good progress was also observed in some milestones being on track of their implementations as shown below: Proposed Procurement Management Unit Structures submitted to PO-PSM for review. It is a strategy to develop PMU structures in Public Sector. Training Needs Assessment for Procurement Staff in LGA completed, the TNA for procurement staff in MDAs will be conducted in FY 2014/15. Output 3.2: Strengthened capacity of MDAs, RSs and LGAs in Cash management by Achievements include: 346 staff from MDAs trained on cash Management. Payment arrears reports are prepared monthly and presented to Commissioner for budget. 10

18 Output 3.3: Strengthened public debt management capacity by 2015 Achievements include: 1) The World Bank debt management report has been shared and it is available in the Ministry of Finance website 2) The National Debt Strategy reviewed and National Debt Management Policy was drafted (including contingent liability ceiling). 3) The Government Loans, Guarantee and Grants Act No. 30 of 1974 was reviewed, The Government Loans, Guarantee and Grants Act, No.30 Cap. 134 (R.E 2004) reviewed and the Medium Term Debt Strategy reviewed as well. 3.4: Improved integrity and content of government financial statements and the migration from IPSAS cash to IPSAS accrual accounting for all government accounts is progressing in accordance with plans. Achievements include: 250 staff from MDAs and Embassies was trained in IPSAS accrual. The 5 year road map is in place and often upgraded to be fully compliant to IPSAS. Currently the template of financial statement of MDAs and RS has been completed. The rest of entities will be taken on board as per the road map Output 3.5: Improved accountability in management of Government Assets for supporting migration to IPSAS Accrual. Achievements include: 1) Assets Tracking Software acquired, installed, tested and placed in operation 2) 70 users from HQ and regional offices trained on the use of the Asset Tracking Software. 3) A contract for valuation of assets for financial year 2013/2014 awarded and its execution to be carried over to financial year 2014/

19 Implementation Status of Milestones as Per M&E Result Framework Out of 34 assessed milestones in KRA 3, achievements were realized in 13 (38.3%) milestones, satisfactory progress (on track) was recorded in 19 (55.9%) milestones, 1 milestone ( 2.9%)delayed in implementation and 1 (2.9%) milestone is at risk. Figure 3: Below depicts the schematic presentation for KRA 3 status as at June, 2014 Component Name Sources of Fund Approved KEY RESULT AREA 3 Fund Released 12 Total Commitment and % of expenditure against fund released % of expenditure against budget ACCOUNTANT GoT 400,000, % GENERAL DEPARTMENT BF 1,396,700,000 1,396,700,000 1,355,208,550 97% 97% TOTAL FOR COMPONENT 1,796,700,000 1,396,700,000 1,355,208,550 97% 75% GOVERNEMNT GoT 500,000, ,000, ,000, % 24% ASSET MANAGEMENT BF 2,010,000,000 2,010,000,000 1,351,191,516 67% 67% DIVISION TOTAL FOR COMPONENT 2,510,000,000 2,130,000,000 1,471,191,516 69% 59% PUBLIC GoT 100,000,000 30,000,000-0% 0% PROCUREMENT POLICY BF 776,000, ,000, ,334,594 52% 52% DIVISION TOTAL FOR COMPONENT 876,000, ,000, ,334,594 51% 46% POLICY GoT ANALYSIS BF 800,000, %

20 DEPARTMENT TOTAL FOR COMPONENT 800,000, % TOTAL KRA 3 5,982,700,000 4,332,700,000 3,233,734,660 75% 54% 2.4 KRA 4: Control and Oversight Objective: Improved adherence and enforcing of MDAs and LGAs to financial internal controls, rules, laws, regulations and audit recommendations by June 2016 Output 4.1: Increased coverage and quality of the internal audit functions by Achievements include: 1) Operation Plan for 5 year approved and disseminated to all Internal Audit Units. 2) The QAIP manual was prepared, draft produced and disseminated 3) Manuals for LGAs and MDAs have been reviewed by consultants (August 2012) to ensure consistency with the International Practice Framework (IPPF), Training has been provided on IPPF and inception report was produced for guidelines on quality assurance. Output 4.2: Strengthened External audit functions by Achievements include 1) More than 5 performance audits p.a. are being carried out using internal coaching, providing a base to build on. 2) 47 auditors from Shinyanga, Simiyu, Mwanza, Kagera and Kigoma were trained on the system of tracking outstanding matters raised in CAG reports 3) Creation of data base for tracking outstanding audit recommendations is ongoing. Data has been collected analysis including preparations of software requirements is ongoing 4) 100 Auditors trained on the application of two (2) Team Mate additional modules Output 4.3: Improved transparency on audit report (Central, Local and Parastatals levels) to strengthen scrutiny and accountability). Achievements include: The Citizen Audit Reports were produced, 5000 copies printed and distributed. So far follow up regarding reactions of the reports to the citizens in 4 regions (Dodoma, Singida, Shinyanga and Mwanza) have been conducted and the remaining 3 regions (Morogoro, Mtwara and Iringa) ongoing 13

21 Output 4.4: Improved Performance of Parastatals by June Achievements include: 1) Sensitization meetings were conducted with stakeholders from Public Institutions and Statutory corporations on March, 2014 to bring awareness on performance contracts 2) Four Board Chairpersons signed performance contracts with TR (Gaming Board Tanzania; Tanzania Port Authority; Tanzania Communication Regulatory Authority and Tanzania Insurance Regulatory Authority). 3) 19Financial Regulations, 7 Staff Regulations, 19 Schemes of Service, 8 Voluntary Agreements, 9 Strategic Plans, 36 Quarterly Reports and 113 Audited Financial Reports reviewed by TR office. 4) A Training Needs Assessment conducted and an action plan developed Output 4.5: Strengthened Capacity of oversight functions of Parliamentary Accounts Committees by Achievements include: 3 Parliamentary oversight Committees (PAC, LAAC) and Finance & Economic Committee were trained on understanding of CAG reports and interrogation skills. Three committees (PAC, LAAC and budget committee) conducted site visits. Output 4.6: Improved public procurement performance by PEs by Achievements include: 1) Procurement audits have been conducted to 52 PEs and the exercise is ongoing for other 50 PEs. 2) PPA, 2011 has been disseminated to 82 Board of Directors, 44 Accounting officers, 42 other staff from Public Entities and to 261 staff from 43 MDAs and 9 LGAs. 3) 44 Procurement Implementation tools revised (standard bidding documents and revised procurement guidelines) and published in PPRA website. 4) PMIS fully functional in 364 PEs with 733 registered users Implementation Status of Milestones as Per M&E Result Framework In KRA 4, the implementation status for 40 milestones was assessed. Achievement was recorded in 9 milestones equivalent to 22.5%, which include finalization of National procurement policy draft, the preparation and issuing of public procurement regulations. Satisfactory progress (on 14

22 track) was recorded in 22 (55%) milestones, 3 (7.5%) milestones are pending and 6 milestones equivalent to (15%) are delayed. Component Name Sources of Fund Approved KEY RESULT AREA 4 Fund Released Total Commitment and % of expenditure against fund released % of expenditure against budget INTERNAL GoT 750,000, ,000, ,000, % 14% AUDITOR GENERAL BF 1,589,000,000 1,589,000,000 1,315,905,000 83% 83% DIVISION TOTAL FOR COMPONENT 2,339,000,000 1,694,000,000 1,420,905,000 84% 61% NATIONAL GoT 15,250,000,000 4,334,375,000 15,250,000, % 2 100% AUDIT OFFICE BF 2,422,000,000 2,422,000,000 2,422,000, % 100% TOTAL FOR COMPONENT 17,672,000,000 6,756,375,000 17,672,000, % 100% GoT 950,000, ,500, ,500, % 21% PPRA BF 1,117,188,000 1,117,188,000 1,117,188, % 100% Project 2,616,895,000 2,616,895,000 2,616,895, % 100% TOTAL FOR COMPONENT 4,684,083,000 3,931,583,000 3,931,583, % 84% TREASURY GoT 600,000, ,000, ,000, % 100% REGISTRAR BF 1,028,800,000 1,028,800, ,800,000 71% 71% TOTAL FOR COMPONENT 1,628,800,000 1,628,800,000 1,328,800,000 82% 82% TOTAL KRA 4 26,323,883,000 14,010,758,000 24,353,288, % 93% 2 The commitment shown is for the construction of Dodoma office building which is designated to be NAOT Head quarters. The construction contract was signed some three years ago with the value of Tshs. 15bn. The constructors have finished their work and the building is expected to be handed over in September, 2014 so far the committed amount need to be paid and the Government is yet to release the full amount 15

23 2.5 KRA 5: Change Management, Programme Monitoring and Communication Objective: Improved management practices with increased accountability and leadership to better manage performance of PFMRP. Output 5.1: Coordinate Integration, interfacing and rationalization of Government financial systems. Achievements include: Stakeholders meeting was conducted to discuss issues arising from mapping exercise and a draft action plan was prepared 133 LGAs assessed on the effectiveness of the operation of IFMS-Epicor 9.05 Output 5.2: Utilization of EPICOR modules increased from seven to ten. Achievements include: EPICOR system has been upgraded from version to 9.05 with 10 modules installed of which 6 are activated 40 ACGEN staff trained on the 6 activated modules as well as on customized programmes for IFMS Output 5.3: All software development and module upgrades are coordinated with the overarching plans for ICT integration. Achievements include: The rehabilitation of server has completed. The next phase is installation of Data Center for data warehouse, the strategy to control the growth of standalone financial software is developed Output 5.4: Improved communication and public access to key fiscal information to stakeholders by Achievements include: 1) The National budget was published on the MoF Website. The information about Citizen was disseminated through various exhibition participated by the Ministry such as Public Service week and SabaSaba exhibition. 2) MoF Communication Strategy is in place, it is awaiting Permanent Secretary Treasury s signature to be officially in use 16

24 3) MoF website structure developed for changing the style of the website content and layout. Output 5.5: Coordination and Standardization of PFM Training achieved. Achievements include: The training mapping exercise is completed and the final report is in place. Capacity building plan was developed and shared with implementing components and also 30 MoF registry Staff were trained on computerized records management. Output 5.7: PFM activities are effectively planned and implemented. Achievements include: 34 Component Managers and PFMRP focal person trained on change management and Strategic Planning in South Africa Implementation Status of Milestones as Per M&E Result Framework In KRA 5, 39 milestones assessed. 18 milestones are achieved (46.2%), 18 milestones recorded on track (46.2%) and 3 milestones (7.6%) are delayed on their implementation. 17

25 Component Name Sources of Fund Approved KEY RESULT AREA 5 Fund Released Total Commitment and % of expenditure against fund released % of expenditure against budget ACCOUNTANT GoT % GENERAL DEPARTMENT BF 2,665,047,615 2,265,045,615 2,038,669,408 90% 76% TOTAL FOR COMPONENT 2,665,047,615 2,265,045,615 2,038,669,408 90% 76% FINANCIAL GoT 750,000, ,000, ,000, % 31% INFORMATION MANAGEMENT BF 1,744,000,000 1,744,000, ,040,740 44% 44% SYSTEM TOTAL FOR COMPONENT 2,494,000,000 1,974,000, ,040,740 50% 40% PMO-RALG GoT BF 1,080,070, ,270, ,270, % 73% TOTAL FOR COMPONENT 1,080,070, ,270, ,270, % 73% ADMNISTARTION GoT 200,000, ,000, ,000, % 70% DEPARTMENT BF 207,000, ,000,000 10,000,000 5% 5% TOTAL FOR COMPONENT 407,000, ,000, ,000,000 43% 37% GOVERNEMNT GoT 300,000,000 64,900,000 64,900, % 22% COMMUNICATION UNIT BF 323,500, ,500, ,051,314 79% 79% TOTAL FOR COMPONENT 623,500, ,400, ,951,314 83% 52% PLANNING DEPARTMENT GoT 1,057,295, ,050, ,050, % 17% BF 1,566,300,000 1,566,300,000 1,152,330,697 74% 74% Project 32,291, % TOTAL FOR COMPONENT 2,655,886,200 1,742,350,000 1,328,380,697 76% 50% ZANZIBAR BF 500,000, ,000, ,807,347 90% 90% TOTAL FOR COMPONENT 500,000, ,000, ,807,347 90% 90% TOTAL KRA 5 10,425,503,815 8,003,065,615 6,063,119,506 76% 58% 18

26 CHAPTER THREE BUDGET EXECUTION 3.1 Funds Disbursement and Release The approved budget for FY 2013/14 was Tshs. 46,398,324,415 of which Tshs. 2,730,783,800 is Project fund, Tshs. 22,557,295,000 is Government fund and Tshs. 21,110,245,615 is Basket Fund. Source of Basket Fund and the status on disbursement is shown in table 3.1 below. Table 3.1: Basket Funds Disbursement by Development Partners for July 2013-June 2014 DP DANIDA KFW DPs Local Currency DKK 11,876,870 DPs Commitment Actual Disbursement Difference Amount in (US ) Amount in (Tshs ) Date Amount USD Amount in Tshs Amount USD Amount in Tshs 2,064,200 3,302,720, ,896,844 3,041,608, , ,111,678 EUR 600, ,180 1,243,488, ,863 1,263,818,917 (10,683) (20,330,917) Canada CAD 2,024,903 1,975,900 3,161,440, ,927,897 3,075,987,846 48,003 85,452,154 DFID GBP 2,661,463 4,023,600 6,437,760, ,097,702 4,968,188, Ireland ,677,351 2,710,217,719 (751,453) (1,240,645,887) EUR 1,000,000 1,295,300 2,072,480, ,318,300 2,113,783,049 (23,000) (41,303,049) Sub Total 10,136,180 16,217,888,000 10,705,957 17,173,604,021 (569,777) (955,716,021) 3.2 Fund flows The available Basket Fund in the holding account was Tshs. 23,984,480,267/= of which Tshs. 1,661,787,834/= was opening balance, Tshs. 5,149,065,406/= was unspent balance returned by components and Tshs. 17,173,604,021/= was disbursement by DPs. The amount released to components was Tshs. 19,910,245,615/= as detailed in table 3.2 below. 19

27 PFMRP BASKET FUND HOLDING ACCOUNT No Table 3.2 Movement in Holding Account with the Bank of Tanzania from 1 July, 2013 to 30 June, 2014 Date Description Amount in USD Amount in Tshs (a) Opening Balance 1,042,082 1,661,787,834 Add Inflows Returned Unspent Balances Vote 21 ( & External Finance) 341, ,460, Zanzibar 303, ,674, Vote , ,377, Vote 50 1,241,685 2,011,145, Vote 21 (CPAD) 81, ,108, Vote 23 11,202 18,060, Vote , ,553, Vote , ,708,831 (b) Unspent Balance Total 3,186,069 5,149,088,412 DP Release Royal Danish 1,896,844 3,041,608, KFW 787,863 1,263,818, DFID 3,097,702 4,968,188, Ireland 1,318,300 2,113,783, CIDA 1,927,897 3,075,987, DFID 1,677,351 2,710,217,719 (c) DP Release Total 10,705,957 17,173,604,021 Funds Available (a+b+c) 14,934,108 23,984,480,267 Less Outflows ` Accountant General 546, ,025, PMO-RALG 220, ,920, Component under MoF Vote 50,7,21 2,008,144 3,220,308, National Audit Office 490, ,075, Ministry of Natural Resources 56,426 90,000, Component under MoF Vote 50,7,21 2,194,386 3,508,693, Accountant General 669,334 1,070,225, PMO-RALG 129, ,120, National Audit Office 1,022,700 1,635,925,000 20

28 Component under MoF Vote 50,7,21 2,093,675 3,349,071, Ministry of Natural Resources 44,923 72,250, Component under Vote 50 - Zanzibar 62, ,000, PMO-RALG 126, ,120, Ministry of Finance-Vote ,660 1,539,876, Component under MoF Vote 7 8,273 13,500, Ministry of Finance-Vote , ,800, Accountant General 1,045,223 1,714,497, PMO-RALG 584, ,840,000 Amount Transferred to Exchequer 12,373,417 19,910,245,615 Balance in The Holding Account as at 30 June,2014 2,560,691 4,203,285,617 Note: Holding Account Balance have been translated at Tshs 1, per US $ at 30 June Actual and Commitment During the period actual expenditure and commitment amounted to Tshs. 34, 954,050,115/= being 120% of the total funds released. Actual expenditure and commitment by source was GoT Tshs. 17,066,528,000/= being 259% 3 of the released funds; Project Tshs. 2,616,895,000/= (100%) and Basket Funds Tshs. 15,270,627,115/= being 77% of the released funds. Table 3.3 below summarizes the overall funds release against actual expenditure for July 2013 to June 2014 while table 3.4 shows the summary breakdown by component recipients. Table 3.3: PFMRP IV Summary of Fund Release and Actual and Commitment SOURCE OF FUNDS GOT BF PROJECT GRAND TOTAL for July 2013-June 2014 APPROVED BUDGET CUMMULATIVE RELEASE CUMMULATIVE EXPENDITURE AND COMMITMENT % ON RELEASE 22,557,295,000 6,600,915,000 17,066,528, % 4 21,110,245,615 19,910,245,615 15,270,627,115 77% 2,730,783,800 2,616,895,000 2,616,895, % 46,398,324,415 29,128,055,615 34,954,050,115 3 The over expenditure and commitments is caused by NAO see Note 1& 2 above 120% 4 The over expenditure and commitments is caused by NAO see Note 1& 2 above 21

29 Table 3.4: PFMRP IV Fund Release against and Commitment by component for FY 2013/14 Component Name Sources of Fund Approved Fund Released to date Commitments to Date 22 Total Commitment and Fund Balance Balance % of expenditure against budget GoT 100,000,000 53,700,000 52,700,000-52,700,000 1,000,000 46,300,000 53% POLICY ANALYSIS DEPARTMENT BF 1,028,000, ,000, ,000, ,000,000 0% Project 56,597, ,597,600 0% TOTAL FOR COMPONENT 281,700, ,000,000 1,184,597,600 52,700,000 52,700, ,897,600 4% MINISTRY OF NATURAL RESOURCES AND BF 162,250, ,250, ,560, ,560, , % TOURISM TOTAL FOR COMPONENT 162,250, , ,250, ,560, ,560, % EXTERNAL FINANCE GoT 100,000, ,000,000 0% BF 379,060, ,060, ,398, ,398,980 74,661,020-80% Project 25,000, ,000,000 TOTAL FOR COMPONENT 379,060,000-74,661, ,060, ,398, ,398, ,000,000 60% PMO-RALG GoT BF 1,725,000,000 1,725,000, ,430, ,270,000 1,265,700, ,300,000-73% TOTAL FOR COMPONENT 1,725,000, ,300,000 1,725,000, ,430, ,270,000 1,265,700,000-73% GOVERNMENT GoT 1,500,000, ,390, ,378, ,378, ,012, ,610,000 9% BUDGET BF 470,400, ,400, ,440, ,440, ,960,000-37% DIVISION Project TOTAL FOR COMPONENT 1,970,400,000 1,019,790, ,818, ,818, ,972, ,610,000 16% ACCOUNTANT GoT 400,000, ,000,000 0% GENERAL BF 4,061,747,615 3,661,747,615 3,393,877,958-3,393,877, ,869, ,000,000 84% DEPARTMENT Project TOTAL FOR COMPONENT 4,461,747,615 3,661,747,615 3,393,877,958-3,393,877, ,869, ,000,000 76% GoT 950,000, ,500,000 7,000, ,500, ,500, ,500,000 21% PPRA BF 1,117,188,000 1,117,188, ,752, ,435,825 1,117,188, % Project 2,616,895,000 2,616,895, ,891,447 2,036,003,553 2,616,895, % TOTAL FOR COMPONENT 4,684,083,000 3,931,583,000 1,067,643,622 2,863,939,378 3,931,583, ,500,000 84%

30 GOVERNEMNT ASSET MANAGEMENT DIVISION GoT 500,000, ,000, ,000, ,000, ,000,000 24% BF 2,010,000,000 2,010,000, ,386, ,804,911 1,351,191, ,808,484-67% Project TOTAL FOR COMPONENT 2,510,000,000 2,130,000, ,386, ,804,911 1,471,191, ,808, ,000,000 59% PUBLIC GoT 100,000,000 30,000, ,000,000 70,000,000 0% PROCUREMENT BF 776,000, ,000, ,334, ,334, ,665,406-52% POLICY DIVISION Project TOTAL FOR COMPONENT 876,000, ,000, ,334, ,334, ,665,406 70,000,000 46% INTERNAL AUDITOR GENERAL DIVISION TOTAL FOR COMPONENT NATIONAL AUDIT OFFICE GoT 750,000, ,000, ,000, ,000, ,000,000 14% BF 1,589,000,000 1,589,000,000 1,315,905,000-1,315,905, ,095,000-83% Project ,339,000,000 1,694,000,000 1,420,905,000-1,420,905, ,095, ,000,000 GoT 15,250,000,000 4,334,375,000 4,334,375,000 10,915,625,000 15,250,000,000 (10,915,625,000) 5 10,915,625, % BF 2,422,000,000 2,422,000,000 1,343,710,000 1,078,290,000 2,422,000, % Project TOTAL FOR COMPONENT 17,672,000,000 6,756,375,000 5,678,085,000 11,993,915,000 17,672,000,000 (10,915,625,000) 10,915,625, % GoT 70,000,000 70,000,000 70,000,000-70,000, % TREASURY BF 1,028,800,000 1,028,800, ,800,000 REGISTRAR - 728,800, ,000,000-71% Project TOTAL FOR COMPONENT 1,628,800,000 1,628,800,000 1,328,800,000-1,328,800, ,000,000-82% FINANCIAL GoT 750,000, ,000, ,255,179 7,744, ,000, ,000,000 31% INFORMATION BF 1,744,000,000 1,744,000, ,102, ,938, ,040, ,959,260-44% MANAGEMENT SYSTEM Project TOTAL FOR COMPONENT 2,494,000,000 1,974,000, ,357, ,683, ,040, ,959, ,000,000 40% 61% 5 The commitment shown is for the construction of Dodoma office building which is designated to be NAOT Head quarters. The construction contract was signed some three years ago with the value of TShs. 15bn. The constructors have finished their work and the building is expected to be handed over in September, 2014 so far the committed amount need to be paid and the Government is yet to release the full amount 23

31 GoT 200,000, ,000, ,000, ,000,000-60,000,000 70% ADMNISTARTION BF 207,000, ,000,000 10,000,000-10,000, ,000,000-5% DEPARTMENT Project TOTAL FOR COMPONENT 407,000, ,000, ,000, ,000, ,000,000 60,000,000 37% GOVERNEMNT GoT 300,000,000 64,900,000 64,900,000-64,900, ,100,000 22% COMMUNICATION BF 323,500, ,500, ,051, ,051,314 66,448,686-79% - UNIT Project TOTAL FOR COMPONENT 623,500, ,400, ,951, ,951,314 66,448, ,100,000 52% GoT 1,057,295, ,050, ,050, ,050, ,245,000 17% PLANNING BF 1,566,300,000 1,566,300,000 1,152,330,697 1,152,330, ,969,303-74% - DEPARTMENT Project 32,291, ,291,200 TOTAL FOR COMPONENT 2,655,886,200 1,742,350,000 1,328,380,697-1,328,380, ,969, ,536,200 50% ZANZIBAR BF 500,000, ,000, ,807, ,000, ,807,347 51,192,653-90% TOTAL FOR COMPONENT 500,000, ,000, ,807, ,000, ,807,347 51,192,653-90% GoT 22,557,295,000 6,600,915,000 5,952,658,179 11,113,869,821 17,066,528,000 (10,465,613,000) 15,956,380,000 76% TOTAL BY BF 21,110,245,615 19,910,245,615 11,912,887,789 3,357,739,326 15,270,627,115 4,639,618,500 1,200,000,000 72% SOURCE Project 2,730,783,800 2,616,895, ,891,447 2,036,003,553 2,616,895, ,888,800 96% TOTAL FOR PROGRAM 46,398,324,415 29,128,055,615 18,446,437,415 16,507,612,700 34,954,050,115 (5,825,994,500) 17,270,268,800 75% 24

32 CHAPTER FOUR CHALLENGES AND RECOMMENDATIONS During the period in reference, program implementation encountered challenges including: Initiation of the procurement process started very late. The implementing components did not prepare draft ToRs and technical specifications in time, hence contributing to low use of funds. Delay in enacting of various PFM legislations due to interference of other national priorities e.g. change of parliament session due to constitutional review. Inadequate local funds to support the implementation of the program. RECOMMENDATIONS TOR s should be prepared earlier and submitted timely to ensure the intended procurement activity is done on timely manner Programme implementation should consider some changes which occur on national priorities and components should consider the same when planning for implementation. 25

33 PFMRP ANNUAL REPORT FOR FY 2013/14 Annex 1 PFMRP IV M&E RESULT FRAMEWORK STATUS AS AT 30 TH JUNE 2014 CODE: MILE STONE DESCRIPTIONS STATUS (State whether Achieved, On track, Delayed Pending, At Risk) COMMENTS ON THE STATUS RESPONSIBLE COMPONENT KRA 1: Revenue Management Output 1.1: Improved quality of forecasting of fiscal aggregates for three years on a rolling basis Strengthen the capacity building of PAD in revenue forecasting Pending 5 staff trained on revenue forecasting. Capacity Development Plan developed, need to be shared. The Contingent liability report will be ready in September 2014 and action plan developed A team of trainers in revenue forecasting developed by June 2014 (The milestone to be reviewed in line with recommendation from the study) Delayed A two weeks training to 15 staff on macroeconomic diagnostic was conducted in December PAD PAD Output 1.2:The Government improves efficiency in domestic revenue 26 mobilization both at the policy and the administration levels by updating legal instruments towards international best practices The study on Non Tax Revenue (NTR) - Integration and Harmonization of Revenue Collection Systems completed On track Draft report of the study has been circulated to stakeholders (8 ministries) for comments and inputs. Stakeholders workshop held in Dec 2013 and PAD

34 by November comments shared with the consultant. The final report will be discussed and action plan developed by October Action plan to implement the recommendations from review of non-tax collection developed by June 2015 Delayed Draft action plan will be ready in December 2014 and its implementation will be incorporated in FY 2015/16. PAD (Draft action plan to implement the recommendations from review of non-tax collection in place by December 2014) Costed action plan incorporated in FY 2015/16 for implementation Pending This milestone is pending until milestone is implemented PAD Submission of a bill to Parliament to enact Tax Administration Act for the purpose of establishing a common tax procedure among different taxes collected by Tanzania revenue authority (TRA) by February Review laws, rules and regulations for local government revenue system to improve LGA own sources in line with best practice by June, Take policy action to improve revenue mobilization from natural resource Achieved On track On track 27 Tax Administration Act was presented to Parliament for the first reading in June 2014 There is an initial draft of revision of the legislation of Local Government Finance related Acts. Cap 289 and 290 as was directed by BRN. The original plan was to review the whole LGA finance Act by considering ever charging circumstances to ensure easy revenue administration and maximize collections whereby key areas have been identified. This will be completed before end of October, ) Review of antiquitic entrance fee completed 2) Review of Forest loyalty charges for forest PAD PMO-RALG MNRT

35 sectors by June, Computerized revenue collection to at least 50% from MNRT by June 2016 product has been done and new charges are in use 3) Review of photographic tourism regulation was in final stage 4) Collection of tourism development levy started (TRA collected on behalf) On track Computerization of the major sources of Revenue in Wildlife Division which are Tourism Hunting and Photographic Tourism has been completed. They contribute about 98% of the total revenue collection of the division Computerization of the main sources of the revenue in Tourism Division which is TALA license has been completed and contributes about 65% of total revenue collection by the Tourism Division. MNRT Review the current system of tax exemptions with the value-added Tax (VAT) regime and amend the VAT Act with a view to be in line with international best practices by November 2014 Achieved Output 1.3: Strengthened capacity of local government authorities to collect revenue by 2015 VAT Act was reviewed and submitted to the Parliament. It did not pass because more consultations with stakeholders needed. All exemptions are published in quarterly basis in MOF and TRA websites. PAD Completed assessment and evaluation of revenue potential for major sources of revenue to all LGAs by June 2014 Achieved The action plan will be discussed in PMO-RALG management meeting scheduled before the end of September. PMO-RALG 28

36 1.3.2 Local Authorities Tax administration teaching and practice modules established and TOT completed for all finance management staff at the regional levels by June PMO - RALG staff and Finance Management Officers at RS are trained in tax revenue plans and budgets to spearhead LGAs tax reviews and reforms, June Four (4) revenue accountants, 3 Council management team members and 1 FMO from each LGA and RS are trained on own source revenue management in every two years. Delayed Achieved On track The implementation of the milestone was postponed. It is awaiting PFM Technical Assistants who will be placed in regions to support the implementation of planned activities. 25 PMO-RALG and 25 RS Finance Management Officers were trained on: 1) Introduction to revenue planning 2) Revenue situation analysis, vision and mission, objectives and targets 3) Revenue forecasting 4) Overview of revenue budgeting in Public Sector 5) LGA revenue budget preparation process 6) MTEF budgeting 7) Preparation of LGA Tax revenue Plans and s 8) LGA revenue budget implementation, monitoring and control 9) Scrutinizing LGA plans and budgets It will be implemented in FY 2014/15 under milestone PMO-RALG PMO-RALG PMO-RALG 29