The role of CAG in public financial management

The role of CAG in public financial management

By Sincere Prosper Ngowi

Among the many best points of dialogue in Tanzania from April 8, 2021 is the report by the Controller and Auditor Basic (CAG) which was submitted earlier than Parliament and therefore made public. Audit studies by CAG are amongst key paperwork on prudent public monetary administration. The CAG usually points his report for a given fiscal 12 months ending on 30th of June.

Constitutionally, the studies should be offered to the President earlier than each March 30. They usually include extraordinarily necessary points patterning to public funds each revenues and expenditure.

Public funds

Public funds in Tanzania are raised from varied inner and exterior sources.

Inner sources embrace tax and non-tax revenues. Taxes are of assorted classes.


They embrace however usually are not restricted to value-added tax (VAT), pay as you earn private earnings tax (Paye), company earnings tax (CIT), abilities growth levy (SDL), and so forth.

On the Native Authorities Authorities (LGAs) stage, public funds embrace revenues from property tax, charges, cess and fines. Different sources of public funds embrace loans and help.

Loans should be repaid by taxpayers’ cash and help cash is donor international locations’ taxpayers’ cash. All these are funds raised from the general public for funding public items and companies.

Public items and companies embrace financial infrastructure equivalent to roads, ports, airports and railways. These are laborious infrastructure. Financial infrastructure embrace tender infrastructure as nicely together with the Web.

Public items and companies embrace water, schooling, well being, safety, and so forth.

Partly these funds are managed and accounted for by way of varied authorized, coverage and regulatory frameworks in addition to establishments.

One such establishment is the Nationwide Audit Workplace (Naot) the place the present CAG is Charles Kichere (pictured).

On CAG’s studies

CAG studies are outcomes of large and at occasions in-depth audit of public funds, methods, legal guidelines, laws and practices associated to public funds.

The audits intention at discovering out the extent to which laid down legal guidelines, laws and procedures on public monetary administration are adopted. The CAG additionally audits inner methods in public establishments overlaying Ministries, Departments and Businesses (MDAs).

He additionally audits political events as they’re beneficiaries of public funds collected by way of taxation. His annual studies present public finance administration (PFM) points for a given 12 months in addition to for points found in previous years that had been but to be reported on. It additionally informs on compliance with earlier suggestions given by CAG and the Public Accounts Committee (PAC) of the Parliament.

Chosen 2021 points

The CAG has been issuing a number of studies of great significance within the PFM area. The report issued on April 8, 2021 has quite a lot of problems with concern in PFM. These points are discovered within the central authorities, native authorities and parastatals. On income aspect they embrace problems with misplaced public funds for varied causes together with procurement associated ones; collected however not submitted funds; uncollected taxes; penalties, fines and curiosity costs that may very well be prevented; loss-making parastatals and far more alongside these strains.

On the expenditure aspect points embrace expenditures that would not have worth for cash, overpayment for some public items and companies; funds for public items and companies with out supply of the identical; expenditure on accomplished however not working tasks; expenditures with out following laid down procedures for public funds together with however not restricted to adhering to budgets, procurement processes, issuing and receiving of acceptable receipt and far more alongside these strains.

Different points relate to non-submission and insufficient submission of economic and different studies to be audited by the CAG in addition to governance points. On the latter, points embrace lack of and insufficient board memberships together with poor composition of boards and too many board conferences for some establishments. These are simply a number of the points within the 99-page abstract of the report.

CAG Report Dialogue

CAG’s studies are usually mentioned in varied locations together with within the Parliament. This is essential for transparency and accountability within the context of PFM.

The discussions inside and out of doors the Parliament is meant to be goal and critically constructive scrutiny that goals at fixing what’s damaged in PFM as reported by the CAG. Tax payers, donors and lenders of public funds have curiosity in figuring out how their funds are used. That is the essence of accountability. Good discussions and appearing on suggestions by the CAG is a optimistic rating within the prudent PFM area.


Ngowi is Affiliate Professor of Economics, Researcher and Advisor at Mzumbe College, and Principal of Mzumbe College (Dar es Salaam Campus).

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