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THE UNITED REPUBLIC OF TANZANIA
MINISTRY OF FINANCE
PUBLIC FINANCIAL MANAGEMENT REFORM
PROGRAMME STRATEGY PHASE IV
2012/13 - 2016/17
VOLUME I
JUNE, 2012
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Table of Contents
Table of Contents ...............................................................................................2
ABBREVIATIONS AND ACRONYMS .................................................................4
EXECUTIVE SUMMARY ......................................................................................8
CHAPTER ONE .................................................................................................. 13
1.0 INTRODUCTION ........................................................................................ 13
1.1 Background ...........................................................................................................13
1.2 Purpose of the PFMRP IV ...................................................................................16
1.3 Main actors ...........................................................................................................16
1.4 Implementation Period .......................................................................................17
1.5 Financing of the Programme .............................................................................17
CHAPTER TWO .................................................................................................. 18
2.0 SITUATIONAL ANALYSIS ..................................................................... 18
2.1 Overview of current PFM ....................................................................................18
2.2 PFM Reforms ........................................................................................................19
2.2.1 Revenue Management and Tax Administration .............................................. 19
2.2.2 Planning and Budgeting ...................................................................................... 20
2.2.3 Budget Execution, Accountability and Transparency ..................................... 21
2.2.4 Budget Control and Oversight ........................................................................... 23
2.2.5 Change Management, Programme Monitoring and Communication ........... 24
2.3 Other Core Reforms in Tanzania .......................................................................25
2.4 Strengths identified in the Tanzania PFM systems .........................................27
2.5 Challenges identified in the Tanzania PFM systems .......................................28
CHAPTER THREE .............................................................................................. 30
3.0 PERSPECTIVES OF PFMRP IV .............................................................. 30
3.2 Goal ........................................................................................................................30
3.3 Main Objectives ....................................................................................................30
3.4 The PFM reform Key Result Areas ....................................................................30
3.5 Intermediate Results ...........................................................................................33
3.6 Key Drivers ...........................................................................................................34
3.6.1 Enabling Realisation of Tanzania Development Vision 2025 ........................ 34
3.6.2 Facilitating Implementation of the Five Years National ................................. 34
Development Plan ............................................................................................................ 34
3.6.3 Facilitating Implementation of MKUKUTA/MKUZA II ..................................... 35
3.6.4 Taxpayers Demands for Better Services .......................................................... 35
3.6.5 Enhancing Good Governance ............................................................................. 35
3.6.6 Effective and Efficient PFM System ................................................................... 36
3.6.7 Addressing PFM Challenges ............................................................................... 36
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3.7 Anticipated Success Factors ...............................................................................37
3.7.1 Capacity Building ................................................................................................. 37
3.7.2 Enabling Legal Framework ................................................................................. 37
3.7.3 Effective Communication, Coordination and Dissemination .......................... 37
3.7.4 Commitment of Top Leadership and Key Stakeholders ................................. 38
3.7.5 Effective and Functional M&E System .............................................................. 38
3.8 Interventions of PFMRP IV .................................................................................38
3.8.1 KRA 1: Revenue Management ........................................................................... 38
3.8.2 KRA 2: Planning and Budgeting ........................................................................ 39
3.8.3 KRA 3: Budget execution, accountability and transparency ......................... 40
3.8.4 KRA 4: Budget control and oversight ............................................................... 41
3.8.5 KRA 5: Change Management, Programme Monitoring and Communication43
CHAPTER FOUR ................................................................................................ 46
4.0 INSTITUTIONAL ARRANGEMENTS ..................................................... 46
4.1 Internal Programme Implementation Arrangements .....................................46
4.2 Programme Governance Arrangements ...........................................................46
4.3 Joint Steering Committee (JSC) ........................................................................49
4.4 Programme Management Committee (PMC) ...................................................49
4.5 Technical Working Group (TWG) ......................................................................49
4.6 Programme Management ...................................................................................49
4.7 PFMRP and other core reforms..........................................................................50
CHAPTER FIVE .................................................................................................. 51
RESULT FRAMEWORK ..................................................................................... 51
5.1 INTRODUCTION ........................................................................................................51
5.2 The Development Objective ....................................................................................51
5.3 Link between PFMRP IV with other National Frameworks .................................51
5.4 Result Chain..........................................................................................................52
5.5 The Result Framework Matrix ............................................................................52
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ABBREVIATIONS AND ACRONYMS
ACGEN Accountant General
AFROSAI African Organization of Supreme Audit Institutions
AMP Aid Management Platform
BoT Bank of Tanzania
CAG Controller and Auditor General
CB Commissioner for Budget
COA Chart of Accounts
CoFoG Classification of Functions of Government
CPAD Commissioner for Policy Analysis Department
CS Chief Secretary
CS-DRMS Commonwealth Secretariat-Debt Recording Management System
DAC Development Assistance Committee
DFID Department for International Development
DFMIS Director of Financial Management Information Systems
DIA Department of Internal Audit
DPs Development Partners
DPD Director of Planning Division
East-AFRITAC Eastern Africa Technical Assistance Centre
EFT Electronic Funds Transfer
EU European Union
FEC Finance and Economic Committee
GBS General Budget Support
GDP Gross Domestic Product
GFS Government Financial Statistics
GoT Government of Tanzania
HIPCs Highly Indebted Poor Countries
ICT Information and Communications Technology
IDA International Development Association
IEC Information, Education and Communication
IFMS Integrated Financial Management System
IMF International Monetary Fund
IMTC Inter-Ministerial Technical Committee
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IMF/FAD International Monetary Fund/Fiscal Affairs Department
IPSAS International Public Sector Accounting Standards
IRBM Integrated Results Based Management
JAST Joint Assistance Strategy for Tanzania
JSC Joint Steering Committee
JSM Joint Supervision Mission
KRA Key Results Areas
LGAs Local Government Authorities
LAAC Local Authorities Accounts Committee
LGRP Local Government Reform Programme
LSRP Legal Sector Reform Programme
MACMOD Macroeconomic Modelling Tool
MDAs Ministries, Departments and Agencies
MDGs Millennium Development Goals
M&E Monitoring and Evaluation
MoF Ministry of Finance
MTEF Medium Term Expenditure Framework
MTFF Medium Term Fiscal Framework
MTSPBM Medium Term Strategic Planning and Budgeting Manual
NAO National Audit Office
OECD Organization for Economic Cooperation and Development
PAC
PAOB
Public Accounts Committee
Public Authorities and Other Bodies
PC Planning Commission
PBB Program-Based Budgeting
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PFMRP Public Financial Management Reform Program
PEs Procuring Entities
PER Public Expenditure Review
PLANREP Planning and Reporting system
PMIS Procurement Management Information System
PMO-RALG Prime Minister’s Office, Regional Administration and Local
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Government
PO-PSM President Office -Public Service Management
PPAA Public Procurement Appeal Authority
PPP Public Private Partnership
PPRA Public Procurement Regulatory Agency
PPD Procurement Policy Division
PSPTB Procurement and Supplies Professionals and Technicians Board
RBBS Results-Based Budgeting System
RCU Reform Coordination Unit
RSs Regional Secretariats
SAI Supreme Audit Institution
SBAS Strategic Budget Allocation System
SP Strategic Plan
TA Technical Assistance
TISS Tanzania Inter-Bank Settlement System
TR Treasury Registrar
TRA Tanzania Revenue Authority
TRIMS Treasury Registrar Investment Management System
WB World Bank
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EXECUTIVE SUMMARY
The Strategic Plan for reform of Public Financial Management, Phase IV, is the result of
a period of diagnostic analysis and consultations within Government and Development
Partners. The need for deepening reforms of the public finance management is
emphasized in MKUKUTA/MKUZA II and Vision 2025, as key elements for PFMRP to
achieve:
Fiscal sustainability and balance in the public economy;
Restructuring and reallocations for growth and poverty alleviation; and
Improved public sector performance, efficiency and effectiveness in public
administration leading to improved service delivery and development results for
Tanzanians.
A number of underlying reforms have been initiated, for example, those related to an
improved budget process along with simplified procedures, automated spending
commitment controls, financial reporting and other finance systems, legal reforms of
financial management, ethics, procurement, introduction of modern audit methods and
techniques. Some institutional reforms have been undertaken to promote good
governance and fight against corruption. These initiatives have resulted in some
improvements, as measured by international benchmarks and diagnostic reviews.
However, there are indications that the reforms undertaken had not fully reached the
desired end results. External diagnosis coupled with the problem analysis carried out
through specific audits, reviews, workshops and consultations to design Phase IV
indicate that many challenges still remain. In essence, the PFM system is still
inadequate; a number of improvements are needed before it becomes an effective and
efficient management tool for improved public service delivery.
Efforts to mobilize public financial resources have encountered challenges relating to tax
collection; accounting and reporting of non-tax revenues. There are still challenges to
comprehend fully the costing of priorities into the Government budget allocations and
the implementation and credibility of the recurrent and development budgets across key
sectors.
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The quality, accuracy and timeliness of financial reports and accounting are generally
good, but require improvement. As EPICOR was rolled out to Ministries, Departments
and Agencies (MDAs) and are being rolled out to all Local Government Authorities
(LGAs) it faces serious challenges related to ICT infrastructure and interfacing with
other systems.
Efforts have been made to improve cash management. The present cash based
commitment system, which ensures commitment control on macro level, puts some
challenges to cash management as its side effect can distort execution of the budget
especially when cash is not available on a timely manner. Over the coming reform
period the Government will start the migration from Cash basis of accounting to Accrual
accounting. This will further improve the integrity and content of the Governments
financial statements. The migration towards program based budgeting will increase the
credibility of the budget to ensure that priorities are properly costed and attained. In
addition, a centralization of the management of public debt will reduce the borrowing
costs. Reforms in procurement are well underway and compliance rates have gone up
and efforts will continue to ensure improvement and sustainability. In addition, support
will be given to the Procurement Policy Division with the aim of ensuring value for
money in public procurement. There is opportunity to further enhance the quality of
financial internal controls following the establishment of Internal Audit Department in
the MoF, to further improve the timeliness and quality of audit reports and to ensure
that audit recommendations are implemented.
The Government is determined to step up reforms of the Public Finance Management
system. The analysis of the current needs and lessons learned has led to the
conclusion that the PFM reform shall be:
Comprehensive, including all those various key reforms and activities in the PFM
system as well as the cross-cutting issues related to capacity building, service
conditions, and the institutional policy legal and regulatory frameworks;
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Captured in a well defined Monitoring and Evaluation framework Sequenced, to
manage priorities to ensure a more accurate cash forecasting and achievement of
results;
Linked and inter-dependent with clear demarcation of responsibilities and
accountability
Better standardized and automated systems to ensure attainment of desired results
in financial recording and reporting;
Well managed, with effective institutional arrangement to support implementation of
the programme
Focused, aiming at supporting agencies and initiatives which are likely to have a
great cross cutting impact on the PFM system.
This strategy is in line with the Five Year Development Plan (FYDP 2011/12-2015/16),
MKUKUTA/MKUZA II and the Vision 2025 and aims for achieving the following:
Economic growth and poverty reduction achieved through policy-based budget
management and resource mobilization and allocation, improved fiscal discipline and
sustainable budget balance;
Service delivery improvement through the introduction of results-based
management, program based budgets, accountability and performance audits;
Good governance through improved transparency, accountability and efficient
controls.
The new phase is an enabler towards enhancing revenue mobilization, planning and
budgeting, transparency, accountability, efficiency and effectiveness in the use of
resources and implementation will be through 5 Key Result Areas (KRAs) of the PFM
system; 1) Revenue management, 2) Budget and Planning, 3) Budget execution,
Transparency and Accountability, 4) Budget control and Oversight, 5) Change
management, Programme monitoring and Communication.
The identified KRA structure shall ensure that all the different aspects and dependencies
of PFM reform are contained and managed during the program implementation. In
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essence, it concurs with the best model for the Public Financial Management system,
which is also reflected in the common assessment framework for PFM-PEFA. In
addition, it includes cross-cutting institutional issues such as IFMS, Information,
Education and Communication (IEC), Change management, Information Communication
Technology (ICT) and capacity building and training.
The reform program is led by a PFM Joint Steering Committee chaired by Permanent
Secretary – Treasury, MoF with members from wider PFM stakeholder group and with
representatives from the development partners.
The estimated total cost of PFMRP Phase IV amounts to Tshs 175 billion1 over a five
year period for the direct development activities including funds to allow the
Government of Zanzibar to conduct the necessary studies that could lead to the
preparation of a full-fledged Zanzibar Public Financial Management Reform project
(ZPFMRP), through Basket, Project and Government funds. This translates into roughly
Tshs. 35 billions per annum. The Government will commit the equivalent of Tshs 75
billion2 within the MTEF for the next five-year period.
This strategic plan will be accompanied by the following documents that serve to
facilitate the program implementation:
Results Performance Monitoring Framework, which specify Outputs, Performance
indicators, baselines, targets and milestones.
The PFM Reform Program Five Year Work Plan and Budget (2011/12-2015/16) that
details activities planned against the milestones. The plan contains the total
estimated budget for implementation of the program and an annual work plan will
be prepared (Volume II)
An Operations Manuals, that lead component leaders and provide a description of
the main policy and rules, specific roles and responsibilities, institutional
arrangements, and procedures and formats for procurement and financial
1 Subject to review depending on availability of funds and pace of implementation
2 Subject to review depending on availability of funds, exchange rate and pace of implementation
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management and monitoring and evaluation for program implementation (Volume
III)
A Memorandum of Understanding (MOU) between GoT and Development Partners
which is a signed document outlining shared commitment in implementation of the
programme.
Flexibility and keeping the PFM program relevancy while maintaining a strategic focus at
all times is a challenge that continuously need to be kept on the dialogue agenda. It is
also expected that Development Partners will continue to play a constructive role in the
engagement with the Government. A mid-term review will evaluate progress and
challenges.
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CHAPTER ONE
1.0 INTRODUCTION
1.1 Background
Tanzania has established a solid macroeconomic record over the past decade, with key
macroeconomic indicators improving further particularly between 2006 and 2010 amid
the global downturn. Real GDP growth averaged 7 percent, attributed mainly to
impressive performance in agriculture, transportation, infrastructure, communications,
manufacturing and real estate sectors. Among others, inflation lowered to single digits,
revenue mobilization increased markedly, and overall fiscal deficits and public debt
levels were kept at sustainable levels. In spite of an overly stable macroeconomic
framework, the Government of the United Republic of Tanzania (GoT) has gone through
economic and financial challenges which necessitated structural reform interventions
including strengthening public financial management.
Despite the aforesaid development, challenges remain and these include the need to
expand economic infrastructure and create a more enabling and competitive
environment for achieving sustained and broad based growth. A more efficient
allocation of resources is crucial for the Government of Tanzania. In this context,
reforms in public finance management are intended to contribute more meaningfully
and geared towards better coordination of reforms that will improve public financial
management and hence a high level public service delivery. PFMRP IV strategic plan
represents a paradigm shift from previous plans in that it is driven by an integrated
results based management and monitoring framework. More efficient and effective
budget management is recognized as one of the best ways in which the Government
can contribute to realization of broad-based economic growth and development of a
vibrant private sector.
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Government has implemented PFM reforms over the past two decades with significant
successes. Commendable are the enactment of Public Audit Act No. 11 of 2008 to
enhance operational independence of the National Audit Office; the enactment of Public
Finance Act No. 6 of 2001 and its amendment in 2010 and Public Procurement Act
No.21 of 2004 as amended in 2011 to enhance transparency and accountability; timely
submission of CAG annual audit reports; establishment of the independent Department
of Internal Auditor General; adoption of the Government Financial Statistics (GFS) codes
2001 and Classification of Functions of Government (CoFoG); introduction and
expansion of financial management systems to automate various key PFM processes
including IFMS, LAWSON, CS-DRMS, SBAS; use of EPICOR by all sub-treasuries MDAs
and 86 LGAs; strengthening the capacity of Parliamentary Accounts Committees to
execute the oversight function; identifying and closing down dormant bank accounts to
improve cash management; and provision of capacity building to staff involved in public
financial management.
In spite of the contribution of these reforms to improved PFM, a number of challenges
and concerns were observed during the implementation of PFMRP III that contributed
to programme underperformance. In fact, PFMRP in itself has evolved in different
phases as presented in Box 1 below. PFMRP IV is meant to sustain achievements made
and address the observed challenges in the previous phases and further strengthen the
public financial management systems and facilitate provision of high level of public
service delivery.
The need to strengthen and re-organize Tanzania’s PFM systems has been echoed in a
variety of documents and has attracted support from various stakeholders. The
documents include, among others:
i) the 2009 Tanzania Public Expenditure and Financial Accountability (PEFA) review
identified certain areas of weakness, including credibility and classification of the
budget; multi-year perspective in fiscal planning, expenditure policy, and budgeting;
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transparency of inter-governmental fiscal
relations; consolidation of fiscal position
and the medium term debt management
strategy, and oversight over local
governments. Other areas are;
procurement and contract management;
in-year fiscal reporting; and the internal
audit function and follow up of audit
recommendations.
ii) The Public Expenditure Reviews (PERs)
and a Public Investment Management
(PIM) diagnosis report by the World
Bank point to the need to re-evaluate
public expenditure management
institutions to enable the Government to
fulfill a changing role, one more focused
with efficiency and effectiveness in
service delivery and supporting an
engaging competitive private sector.
These reports also highlight that budget
reform needs to be developed in tandem
with other public sector reforms.
iii) The IFMS/EPICOR Audit Report commissioned by the office of the Controller and
Auditor General (CAG) recommends critical areas for strengthening the institutional
capabilities and harmonization of IFMS systems and tools across MDAs and LGAs.
iv) A recent IMF review of Tanzania’s Public Financial Management underlines that
MDAs strategic plans are not always framed within an assessment of the likely
available medium – term financing. It is acknowledged that considerable emphasis is
put on aligning expenditure allocations with government’s strategic policies and
priorities focusing on activity –based budgeting process. Addressing these issues will
Box 1: Evolving of PFMRP
Tanzania’s PFMRP evolved in the following phases:
PFMRP I: 1998 - 2004
This Phase implemented from 1998-2004 had
an objective of controlling expenditure,
introducing aggregate fiscal discipline and
contributing to stable macro-economic
growth. PFMRP I focused on minimizing
resource leakage, strengthening financial
control and enhancing accountability by
reforming budget process and introducing an
Integrated Financial Management System
(IFMS).
PFMRP II: 2004- 2008
The objective of Phase II was to progressively
modernize the processes, procedures and systems
involved in PFM through the implementation and
use of ‘best practice’ tools, techniques and
methodologies to improve revenue forecasting and
resource allocation for strategic priorities.
PFMRP III: 2008- 2011
The objective of Phase III was to ensure greater
predictability and availability of medium term
resources to executing agencies. The thrust was
about getting the tools, techniques, methodologies
and systems that were introduced in the previous
phase to work efficiently and effectively in an
integrated manner.
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require that greater emphasis is given to the initial strategic phase of budget
preparation with a stronger program level focus thereby enhancing the effectiveness
of the overall expenditure and having positive impacting on service delivery. The
Government has embarked on program based strategic planning and budgeting
processes which will facilitate linkage to MKUKUTA/MKUZA and the Five Year
Development Planning.
Following recommendations from the above reports, the Government has embarked on
a comprehensive and integrated PFM reform program to address major challenges by
developing PFMRP IV strategy.
1.2 Purpose of the PFMRP IV
The PFMRP IV aims at strengthening and improving public financial management
systems in a more coordinated manner in order to meet the current fiscal policy
challenges. Formulation and implementation of Phase IV will enable reforms in the
areas of revenue management, planning and budget management, budget execution
transparency and accountability, budget control and oversight and program
management, monitoring and communication including change management. Hence,
the reform agenda is programmed so as to attain a more effective and efficient budget
formulation, implementation and control in order to contribute to broad-based economic
growth as well as a vibrant private sector development in a sequenced manner.
1.3 Main actors
The Ministry of Finance (MoF), is responsible for public financial management within the
Government thus it has the overall role and mandate of coordinating implementation of
the PFM reform program. The Government intends to implement PFMRP IV focusing on
five Key Result Areas namely: Revenue Management; Planning and Budgeting; Budget
Execution, Transparency and Accountability; Budget Control and Oversight; and Change
Management and Program Monitoring and Communications including supporting
development of a comprehensive Public Financial Management Reform Program
strategy for Zanzibar (ZPFMRP). Thus the main actors will be all MDAs specifically
including TR, NAO, TRA, BoT, PPRA, PAC, LGAs, and Zanzibar.
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1.4 Implementation Period
It is planned that the implementation cycle of Phase IV will be for five financial year
from July 2012 to June 2017. This period is intended to achieve both short term and
medium term results, recognising that short-term wins can be attained, while ensuring
that synergies and sequencing are maintained to ensure realistic results in the medium
and long term.
1.5 Financing of the Programme
PFMRP Phase IV is estimated to cost a total amount equivalent of Tsh 118 billion to
finance the five Key Result Areas. The Government and Development Partners are
committed to financing implementation of PFMRP IV. The five year work plan is found
in volume II.
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CHAPTER TWO
2.0 SITUATIONAL ANALYSIS
2.1 Overview of current PFM
The Vision 2025 and MKUKUTA/MKUZA II affirm that new challenges are emerging
including the need for a greater focus on value for money and effectiveness in order to
maintain prudent management of public resources. Tanzania has maintained a strong
record of fiscal prudence including tax revenue collection performance which has in turn
firmed up the basis to furthering macroeconomic stability and sustained expansionary
economic policy. Literature recognizes that reforms in PFM has contributed to preserve
fiscal discipline and achieve poverty reduction and improved local governance in
Tanzania over the past decade3. Instruments such as the Public Expenditure Review
(PER) and the Medium Term Expenditure Framework (MTEF) and strategic plans have
been introduced as part of the enhanced Highly Indebted Poor Countries (HIPC)
initiatives since 2001 and implemented successfully in all Ministries, Departments and
Agencies (MDAs), with the purpose of maintaining spending under the prescribed limits
and linking policy objectives to multi-year budgets. Despite various reforms in PFM the
Government has nonetheless come to a point of realizing the importance of pursuing a
more inclusive, coordinated and integrated approach to implementation of PFMRP in
order to achieve greater gains in tax administration, make a more efficient use of public
resources, set a more appropriate fiscal policy framework and achieve greater
development results. This becomes more necessary as GoT continues to support
stimulus measures aiming at rapid public investment growth and less fiscal risks and
seeks to better respond against global shocks through improved fiscal adjustment and
developing other suitable fiscal policy and plans.
3 Andy Wynne (2005), “Public Financial Management Reforms in Developing Countries: Lessons from Ghana,
Tanzania and Uganda”; and De Renzio and Dorotinsky (2007), “Tracking Progress in the Quality of PFM Systems
in HIPCs”.
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2.2 PFM Reforms
The Ministry of Finance has been steadfast and instrumental in spearheading past and
ongoing PFM reforms. Gaps in revenue administration, planning, budget preparation
and execution, backlogs in cash and debt management, reporting, procurement,
payment processes, and oversight have been the basis for initiating various PFM reform
interventions.
2.2.1 Revenue Management and Tax Administration
Domestic Revenue Collection
Tanzania faced fiscal challenges arising from the gap between low pace of domestic
revenues and large public expenditures. Low Tax compliance was endemic as a result of
weaknesses in the revenue collection system, poor infrastructure, and antiquated
business processes.
In tackling the challenges in revenue administration, the Government established
Tanzania Revenue Authority (TRA) in 1996, which has markedly improved tax
administration as evidenced by significant increase in revenue collection. Moreover, TRA
has demonstrated effectiveness in revenue administration by introducing Tax payers
Identification Number (TIN), e-filing, and diversifying modes of payment, and effecting
reforms in tax administration, it has however, not been able to resolve key issues
including strengthening of linkages between domestic taxes and customs databases
and other major central database e.g National Civil Registry, social security thus
enabling to improve tax registration and monitoring of medium- and small-size
taxpayers brewing tax evasion and avoidance. The Government continue to provide
guidance on how to better overcome long-pervading deficiencies in non tax revenue
collection by MDAs, RSs and LGAs. The structure of levies and user fees as well as
institutional capacities within MDAs, RSs and LGAs remain complex and deters
achievement of effective, efficient and transparent collection of non tax revenues. In
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line with this, the productive capacities and corporate earnings within parastatal
companies and public corporations need to be strengthened.
External Resources Mobilization
In order to reduce transaction cost in mobilization of foreign resources, the GoT and the
Development Partners jointly developed the Joint Assistance Strategy for Tanzania
(JAST) in 2006. The JAST, as a medium term strategy, has put in place a framework for
dialogue between the GoT and DPs. The Aid Management Platform (AMP) System was
developed to enhance transparency on issues pertaining to disbursing and reporting of
foreign resources and projections in a more timely and regular basis and in
concordance with to the budget calendar.
2.2.2 Planning and Budgeting
The government has developed a Medium Term Strategic Planning and Budgeting
Manual (MTSPBM) that guides MDAs, RSs and LGAs in planning, budgeting, monitoring,
evaluation and reporting. The key documents include the Planning and Budgeting
Guideline (PBG), the budget speech; the estimate books and the background to the
budget and medium-term framework (BBMTF). The Government has also updated its
financial statistics by upgrading GFS codes from 1986 to 2001 series. Furthermore,
since 2010/11 the Government budget system has been upgraded so as to enable
reporting according to Classification of Functions of Government (CoFoG). A salient
feature in reforms of budget preparation is the stepped up commitment towards
transitioning to program-based budgeting, whose implementation is expected to start in
the financial year 2012/13.
The Government improved the Medium Term Expenditure Framework (MTEF) by
updating theMacroeconomic Modelling Tool (MACMOD) tool for projection of macro-
economic variables and building capacity on financial programming and projections; the
tool for resource allocation - Strategic Budget Allocation System (SBAS) and the
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Planning and Reporting (PLANREP) system for LGAs. Expenditure tracking and
performance monitoring mechanisms have been instituted and institutional
arrangements are in place to conduct periodic follow-up of funds disbursed for budget
execution including inspection of projects.
2.2.3 Budget Execution, Accountability and Transparency
Procurement
The Government enacted the Public Procurement Act 2004 (PPA, 2004) along with its
2005 regulations which resulted into inter alia the establishment of the Public
Procurement Regulatory Authority (PPRA) and the Public Procurement Appeals Authority
(PPAA). In addition, the MoF established the Public Procurement division with a
mandate to oversee the development of public procurement policy and procurement
cadre. In 2007 the Government amended the Local Government Procurement
Regulations to enable LGAs use the PPA, CAP 410.
Procurement audits have been conducted in 219 entities, and these have confirmed
that the average level of compliance with the Act (PPA) increased from 39% in 2006/07
to 65% in 2009/10, to 68% in 2010/11 while follow up audits showed that compliance
level has improved from 71% in 2008/09 to 73% in 2009/10 and 75% in 2010/11.
A web-based Procurement Management Information System (PMIS) was developed in
2008 and 243 PEs have been registered as of June 2011. The system facilitates PEs to
submit procurement plans and implementation reports to PPRA. In addition, there has
been increased transparency, awareness and access to procurement information
published through the weekly Tanzania Procurement Journal and the PPRA website
(www.ppra.go.tz).
The Government has introduced a system for procurement of common use items and
services, by establishing the Government Procurement Services Agency (GPSA) which
arranges for Framework agreements with suppliers and services providers operating
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under such system. The System has simplified procurement of common items, and
Procuring Entities (PEs) are now saving both time and transaction costs, normally
associated with carrying out tendering proceedings. The public Procurement Policy Unit
(PPU) was established under the Ministry of Finance to formulate and oversee
implementation of procurement policy. The Unit is also mandated to ensure that a
professional public procurement cadre is developed, coordinated and properly
supervised.
Debt Management
In the year 2004, the Government amended the Government Loans Guarantees and
Grants Act No. 30 of 1974 to empower the MoF to borrow and receive grants. This
aimed at curbing haphazard borrowing which landed the Government into the debt
crisis in the 1980s. The Act established among other things the Technical and National
Debt Management Committees (TDMC and NDMC); the latter acting as a technical arm
to the NDMC and the former taking an advisory function to the MoF on borrowing and
grant seeking matters.
Cash Management
Cash Management in the context of the Government entails an effective and efficient
management of the Government resources in the way and manner stipulated in the
Finance Act, Regulations and International Public Sector Accounting Standard (IPSAS).
During the financial year ended 30th June 2008 the Government adopted the
International Public Sector Accounting Standard (IPSAS) – Cash basis of accounting.
This has improved the content, credibility and quality of cash flow plans for revenues
and expenditures, good banking arrangement system and effective utilization, and
reporting of public funds. The Government aims to have right amount of cash and on
time for the service delivery units.
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The Government has been implementing IFMS/EPICOR in the MDAs since the year
2000. Currently all MDAs and several LGAs use the IFMS/EPICOR to process the
financial transactions and provide input for the preparation of financial statements.
Implementation of the recommendations of a system audit carried out by NAO has
enhanced efficiency and effective use of the system.
Public Access to Fiscal Information (Accounting and Reporting)
The Government continues to facilitate improved public access to fiscal information
through website, local newspapers, Government gazette, notice boards, radio and
television. The information include planning and budget guidelines, financial
legislations, annual budgets, budget execution reports, financial statements, audit
reports and contract awards, and allocation of budget resources. In general, access to
fiscal information has improved in recent years, notwithstanding a few key missing
elements and quality controls which undermine integrity and accuracy of financial
reporting. A “Citizen Guide to the Budget” is published by a non-governmental
organization to enhance public awareness to fiscal information.
2.2.4 Budget Control and Oversight
Internal Control and auditing
In recent years, the importance of the internal audit profession has gained significantly
within the country. The Institute of Internal Audit (IIA) was established in 2006 to
promote greater awareness and facilitate accredited training to Internal Auditors.
Another salient feature in PFM reforms is the creation of a centralized internal audit
function within the MoF Department of Internal Auditor General established in 2010.
This is sought to strengthen the PFM mandate and capacity of the MoF so as to provide
technical guidance for internal auditors across MDAs and LGAs and be the only
responsible agent on behalf of Government suiting and channeling of new international
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standards and unifying of national procedures and controls in accordance with best
practices.
External Audit and Oversight
The Government strengthened audit and oversight functions through enactment of the
Public Audit Act No.11 of 2008 which empowered and enhanced operational
independence of the Controller and Auditor General (CAG) and the functions of the
Parliamentary Accounts Committees in order to ensure accountability in PFM. The CAG
capacity was strengthened through recruitment, training and provision of tools,
equipment and office accommodation. Moreover, the CAG has taken measures to
improve external audit performance through the introduction of a risk-based audit
methodology and recently has embarked on the automation of the audit process as a
remedial measure and further training in other audit activities. As a result, there has
been increased compliance with financial legislation and regulations as evidenced by
CAG audit reports. The reports show that unqualified audit opinion for Central
Government (MDAs and RSs) increased from 70 percent in 2007/08 to 77 percent in
2009/10.
2.2.5 Change Management, Programme Monitoring and Communication
Program Administration and Management
The mainstreaming of PFMRP into MoF structures has been generally effective. The
capacity of the Government structures to design and implement reform activities
outside the enclave of Reform Secretariat has improved significantly. Furthermore,
there is improved coordination and dialogue between and among the various
stakeholders of the programme. Some of these initiatives include the Lushoto4 retreat
which intended for team building and introspection; joint sessions for development of
MTSPB Manual, MKUKUTA/MKUZA, strategic planning and MTEF; and other meetings.
4 Objective of Lushoto retreat was to build improved dialogue and trust between the various PFMRP stakeholders and improve
networking.
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Despite some of the noted achievement regarding mainstreaming of PFMRP into
government structure, the design of previous phase posed a challenge in integrating
PFMRP into the existing institutional structure. Most of PFMRP III components were
designed according to functions and not necessarily matching with the program
expected results and apart from components that are within the Ministry of Finance, the
rest are seemingly projects in respective MDAs.
Communication
The Government established Information, Education and Communication units in all
MDAs with a view to improving public access to information. The capacity of the MoF
unit needs to be strengthened for smooth communication and improve timely
dissemination and sharing of information among all stakeholders.
Support to Zanzibar
Under the previous phases funds had been allocated to strengthen capacity building in
public financial management to the Zanzibar Accountant General and the Controller and
Auditor General. These efforts have resulted in installation of IFMS, improved budget
management and auditing in Zanzibar. Under PFMRP IV it is intended to support the
development of a strategy for a full fledged reform program designed for Zanzibar. The
proposed reforms are expected to include revenue management and strengthening
capacity in financial management.
2.3 Other Core Reforms in Tanzania
Apart from the Public Financial Management Reform Program the other core reforms
being undertaken in Tanzania are Local Government Reform Programme (LGRP), Public
Service Reform Programme (PSRP), Second Generation Financial Sector Reform
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Program, Business Environment Strengthening for Tanzania (BEST), and Legal Sector
Reform Programme (LSRP).
The essence of the Local Government Reform Programme (LGRP) is to devolve
functions and responsibilities, political powers and authority, human and financial
resources from the central to the local government authorities levels and thus
enhancing accountability under the auspices of Government’s policy on Decentralization
by Devolution (D by D). The extent, to which these reform programs results into
improved service provision depends on the quality of local governance as well as status
of financial management in the public sector.
The public service reform program aims at enhancing capacity, performance and
accountability of MDAs and LGAs in the use of public resources and improves service
delivery to levels consistent with timely and effective implementation of strategies and
priorities. Enhanced performance could as well be evidenced by improvement in policy
making, improvement in the use of performance management systems by MDAs and
LGAs, improvement in the management of public servants, and greater access to
information and responsiveness to the demands of stakeholders.
The Second Generation Financial Sector Reform Program intend to improve the
management structure and financial growth of the financial sector and also to stop
further mismanagement in the financial sector which was experienced in the 1990s.
The Government of Tanzania with the support of donors is implementing the Program
for Business Environment Strengthening for Tanzania (BEST) whose objective is to
deliver a more conducive environment for doing business in Tanzania. The BEST
Program addresses key constraints in the legal and regulatory environment for business
and outlines the most effective measures to resolve them.
The Legal Sector Reform Program has the objective of ensuring speedy dispensation of
justice, affordability and access to justice for all social groups, integrity and
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professionalism of legal officers, enhanced independence of the judiciary, and ensuring
high standards of legal and regulatory framework.
2.4 Strengths identified in the Tanzania PFM systems
The Government has implemented a number of PFM interventions which ultimately led
to gains in credibility of the budget, financial recording and reporting, and fiscal
oversight. Sound macroeconomic policies and a prudent fiscal management strategy
have underpinned Tanzania’s position as one of the best performing public financial
management system in Sub Saharan Africa (PEFA Report, 2006). As a result of the
impact of the global financial crisis and the stimulus recovery, policies are being
appropriately redirected away from short term demand management and expanding
resources towards medium term considerations and achieving higher quality standards
as a result of improved service delivery.
Significant reforms are still required to build on the strengths gained over time which
include the following:
i) Strong commitment by the Government of Tanzania to undertake PFM reforms to
a new stage;
ii) Strengthened MoF, macro-fiscal policy role and the introduction of a Medium-Term
Expenditure Framework so as to enable a more effective formulation and
disciplined use of the budget according to revenue and development targets on
the aggregate;
iii) Aligning planning timeframe with MKUKUTA/MKUZA II and by a global
performance framework for all public agencies and executing units including the
development of the five year development plan- ongoing review of the Public
Finance Act, the Public Procurement Act, Public Audit Act and other relevant
legislation concurrently with the formulation of a new phase of the PFMRP and
ensure a wide coverage and coordination of the newly revised components in the
reform agenda;
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iv) Successful rollout of the IFMS/EPICOR to all MDAs, RSs and 86 LGAs with
simplified and automated means to ease financial recording and reporting and the
MOF to exert a major successful role in implementing commitment controls
throughout the payment system in a centralized manner. This will continue to
improve the quality of planning and budgeting controls as the new phase enter
into operation;
v) Adoption and use of International Public Sector Accounting Standards (IPSAS),
International Standards on Auditing (ISA), and International Professional Practices
Framework (IPPF) for Internal Auditors;
vi) Introduction of Electronic Fund Transfer (EFT) and Tanzania Interbank Settlement
System (TISS);
vii) Ongoing reforms to foster effective management of both external and domestic
debt;
viii) Ongoing reforms in payroll controls, procurement, and tax regimes;
ix) Strengthened oversight functions committees to enforce implementation of CAG
recommendations;
x) Revision of Legal and Regulatory Frameworks to enhance control and
accountability; and
xi) Continued strengthening of NAO and PPRA to carry out control and oversight
functions over the procuring entities.
2.5 Challenges identified in the Tanzania PFM systems
While the traditional budget system and the new features introduced in recent years
have enabled Tanzania to observe fiscal discipline and stability, the system’s continued
effectiveness and the management of public resources are being challenged. The main
challenges of the current PFM system can be summarized as follows:
i) Macroeconomic and fiscal forecasting;
ii) Linkages between development spending and the recurrent cost of the development
budget;
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iii) Predictability of the budget execution;
iv) Harmonization of external and domestic debt systems;
v) Project and contract management; and
vi) Timely responding to audit recommendations.
To address these PFM challenges, the Government has embarked in the staging of a
comprehensive and integrated PFM reform program based on the PEFA analysis and the
other reports mentioned in the first Chapter. Five Key Result Areas have been identified
which are: Revenue Management; Planning and Budgeting; Budget Execution,
Transparency and Accountability; Budget Control and Oversight; and Change
Management and Programme Monitoring and Communications.
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CHAPTER THREE
3.0 PERSPECTIVES OF PFMRP IV
3.2 Goal
The overarching goal of Tanzania’s PFMRP is to attain a Sound financial management
and discipline in public service delivery for sustainable development. Compared to
previous phases, the PFMRP IV will strategically focus on critical PFM actions which aim
at improving coordination primarily between revenue management, fiscal policy and
planning while prioritising those agencies and actions that will have cross cutting effect
on the full PFM system. Further, the programme will focus on improving MTEF
credibility, budget control and oversight, and deepening into better linking planning and
budgeting, cash and debt management, while migrating towards accrual accounting,
financial accountability and transparency.
3.3 Main Objectives
The main objective of the PFMRP IV is to support the National Strategy for Growth and
Reduction of Poverty – MKUKUTA/MKUZA II through implementation of the five year
National Development Plan to attain the objectives of Vision 2025.
3.4 The PFM reform Key Result Areas
The Government is defining its PFM reform priorities, subsequent reform activities and
sequencing of the implementation process according to MKUKUTA/MKUZA II. Further,
the PFM reform agenda will serve as a useful tool for dialogue between Government
and development partners about the provision of harmonized support to the
Government’s PFM reform efforts. PFMRP Phase IV is intended to address the identified
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critical limitations in the public financial management systems based on five Key Result
Areas (KRAs): Revenue Management; Planning and Budgeting; Budget Execution,
Accountability and Transparency; Budget control and Oversight; Change Management
and Programme Monitoring and Communications as well as strengthening
Government’s capacity to improve service delivery.
Considering the need for attaining a comprehensive approach, the reform will address
the following Key Result Areas (KRAs) with Senior leads indicated in : 1) Revenue
Management (Commissioner Policy Analysis), Planning and Budgeting (Commissioner
for Budget), Budget execution, transparency and Accountability (Accountant General),
Budget control and oversight (Internal Audit General), Crosscutting issues (including
change management and Program management) (Director for Planning Division).
The identified KRA structure concurs with MoF structure PFM implementation
stakeholders and is reflected in the common assessment framework for PFM-PEFA. In
addition, it specifically focuses on cross-cutting institutional issues, such as training, ICT
systems, change management and communication etc.
The M and E details Outcomes, Outputs, Performance indicators, Baselines, Targets and
Milestones. Based on the M and E framework the work plan, details outputs, milestones,
timing, resources and responsible person.
The particular choice and inclusion of components in the PFMRP Phase IV was informed
by two main factors; i) functional considerations within the MoF and ii) the
organizational structures pertaining within the Government of Tanzania.
Accountability for performance and sustainability considerations also justify an emphasis
on reflecting the organizational structure in the particular breakdown of PFM reform
components. Hence most components have a departmental “home” and are linked to a
“KRA lead”, see Table 1.
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Table 1: KRA and components overview
KRA
Major Component, Department and KRA-TWG
1. KRA 1: Revenue Management,
Leader: CPAD
Commissioner for Policy Analysis Department
(CPAD) – MoF Treasury Registrar (TR) - MoF
Prime Minister’s Office – Regional Administration
and Local Government (PMO-RALG)
Commissioner External Finance - MoF
MDAs
2. KRA 2: Planning and Budgeting,
Leader: BC
Commissioner for Budget (CB) – MoF
CPAD – MoF
PMO-RALG
3. KRA 3: Budget Execution,
Transparency and Accountability,
Leader: AccGen
Public Procurement Regulatory Authority (PPRA)
Public Procurement Policy Unit
Accountant General (ACCGEN) - MoF
CPAD - MoF
Government Asset Management - MoF
4. KRA 4: Budget Control and
Oversight,
Leader: IAG
Internal Auditor Department - MoF
National Audit Office (and Parliament PACs)
TR
5. KRA 5: Change Management
Programme Monitoring and
Communication,
Leader: DPD
Department for Financial Management
Information System (DFMIS) - MoF
Government Communication Unit - MoF
Department for Planning Division – MoF
Support to Zanzibar
PMO – RALG
ACGEN - MoF
DAHRM - MoF
As the table indicates most KRAs have many actors/stakeholders contribution to the
Outcomes. It is evident that linkages between and across most components will need
close collaboration in order to achieve the intended outcome. As such, IAG, NAO and
PPRA as well as the TR and the Parliament (PACs) need to converge efforts, liaise and
collaborate to contribute to improvement in budget control and oversight functions.
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3.5 Intermediate Results
The intermediate results of PFMRP IV, to be achieved by fiscal year 2015/2016 are:
i) Coordinated, comprehensive PFMRP effectively sequenced and supported by a
consistent and harmonised legal and institutional framework;
ii) Utilisation of sound and comprehensive macroeconomic analysis, macro fiscal
forecasting for a credible and transparent budget process and utilisation of MTFF.
iii) Realistic revenue forecasting, collection and management;
iv) Enhanced accuracy in forecasting and reporting of domestic and external cash
resources;
v) Improved reporting and corrective action to enhance quality and completeness of
report on financial statements and audits; cash and debt management;
vi) Establishment of a clear sequenced and coordinated roadmap for support and
implementation of “high impact” implementing agencies and initiatives such as
program-based budgeting, Internal Audit, DFMIS, Treasury Registers, AcGEN,
PMORALG and Revenue management;
vii) A global performance and monitoring framework and establishing of strong
linkages between policy objectives and public expenditure by means of sector-led
MTEF and costed strategic plans; and
viii) Institutional and Standardized training modules established where relevant.
Therefore, Implementation of PFMRP IV will pursue achievement of the hierarchy of
results at Outputs, Outcomes and Impact level as indicated in M&E Result matrix.
PFMRP IV result chains follow the logical sequence of cause-effect relationships
between Impact, Outcomes, Outputs, Activities and Inputs which are monitored by the
M and E framework. PFMRP Stakeholders did a thorough problem analysis through a
logical framework approach to identify what the Programme is accountable for in
contributing to the Impact and Outcomes and what it is accountable for delivering
outputs. For each output, several milestones were identified as a means to achieve
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short term results. The use of Results-Based Management from the design stage of
PFMRP IV is expected to improve program and management effectiveness and
accountability by orienting all the implementation cycle towards achieving the desired
results.
3.6 Key Drivers
The main drivers for PFMRP IV include the need to: enable realisation of Vision 2025;
develop an effective and efficient PFM system in the country; facilitate implementation
of MKUKUTA/MKUZA II; address taxpayers’ demands for better services; enhance good
governance; and address emerging PFM challenges associated with the changing needs
in a dynamic and evolving global economic environment.
3.6.1 Enabling Realisation of Tanzania Development Vision 2025
Realisation and operationalisation of Tanzania Development Vision 2025 (TDV 2025)
depends on a good public financial management system. The vision envisages Tanzania
to become a middle income country characterised by: high quality livelihood; peace,
stability and unity; good governance; well educated and learning society as well as
strong and competitive economy. These aspirations, in particular good governance
require transparency and accountability in public financial management. Similarly, a
strong and competitive economy is to be underpinned by robust planning, sound
resource prioritisation, financial discipline and ability to generate sufficient revenue. This
provides the first rationale for developing PFMRP IV.
3.6.2 Facilitating Implementation of the Five Years National
Development Plan
The Government has prepared the first Five Year Development Plan (FYDP 2011/12 –
2015/16) with the goal of unleashing the country’s resource potentials in order to fast
35
track the provision of the basic conditions for broad-based and pro-poor growth. PFMRP
IV is embracing all three salient features of FYDP which are : a shift from need based
planning to opportunity-based planning; strong emphasis on growth while focusing on
human resource skill development and high drive and scaling up on the role and
participation of private sector in economic growth. In order to attain the main goal of
FYDP, it is necessary to implement PFM interventions which will assure a sound PFM
system to enable effective and optimal resource utilization.
3.6.3 Facilitating Implementation of MKUKUTA/MKUZA II
MKUKUTA/MKUZA II translates Vision 2025 aspirations and MDGs into measurable
broad outcomes organised in three clusters. Cluster I: Growth for reduction of income
poverty; Cluster II: Improvement of quality of life and Social well being; and Cluster III:
Governance and accountability. Moreover, MKUKUTA/MKUZA II is linked to sector
policies and strategies through the operational targets. For effective implementation,
sectors align their strategic plans with MKUKUTA/MKUZA II. Therefore, in order to
attain MKUKUTA/MKUZA II goals, a sound PFM system is essential across the
MKUKUTA/MKUZA clusters.
3.6.4 Taxpayers Demands for Better Services
In the recent years there has been an increase in demand by taxpayers for better
services. The better services are manifested by enhanced transparency and
accountability, value for money on public expenditure and responding to amongst
others requirements of the Parliament regarding public resource management.
3.6.5 Enhancing Good Governance
Good governance has been emphasized in Tanzania Development Vision 2025 and
MKUKUTA/MKUZA II and is a fundamental component in shaping a favourable
environment for economic growth and poverty reduction. It is given the central role in
36
reaching national goals and objectives. These include ensuring systems and structures
of governance support and upholding the rule of law.
3.6.6 Effective and Efficient PFM System
The ability to generate sufficient revenue and external resource mobilisation still
remains a challenge in the country. PFMRP IV will assist in addressing the challenge
through articulating enforcement of tax laws, rules, laws and regulation, widening the
tax base, better management and control of retention and roll over funds, proper
channelling of revenue from collection points to the treasury and the management of
non tax revenue. Moreover, systems and procedures for optimal mobilisation, allocation,
funds flows, spending of and accounting for public resources are still required.
3.6.7 Addressing PFM Challenges
As PFM challenges are still in existence, there is a need to continue formulating
strategic interventions for addressing them. PFMRP IV strategy builds on internal and
external reviews in the last seven years which, besides the above mentioned reports
(primarily PEFA and CAG reports), include the Campo Review (2005), the Paul review
(2007), Hawkins report (2009), the Lushoto retreat report and the supervision mission
reports of 2010 and 2011. The reviews have acknowledged significant PFM
achievements in the country and remain challenges to be addressed. The government
has decided to develop this strategy which will address the observed PFM challenges in
the next five years (2011 – 2016). The strategy will consolidate achievement and
deepen reforms to take into account noted challenges and emerging development
issues. It is noteworthy appreciated that there will always be some PFM challenges as
the economy is dynamic and hence the need to keep PFM systems current and in
robust.
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3.7 Anticipated Success Factors
The success of this strategy will depend on a number of strategic imperatives which
include: capacity building; enabling legal framework and supportive institutional setting;
effective communication, coordination and dialogue; commitment of top leadership and
key stakeholders; as well as an effective and functional M&E system.
3.7.1 Capacity Building
In the earlier phases focus was on implementing PFM capacity building initiatives in the
areas of human resources development, retooling and improving working environment.
However, inefficiency in the programme design resulted into failure in reporting on
training impacts. It is envisaged in the short term, mapping exercise for capacity
building and draw on identified institutions that will develop and deliver PFM specific
modules. In the long term, it is expected that local training institutions to pick up the
opportunity and offer public finance, accounting and procurement certificates/courses.
Hence, this will enable the training institutions to sustainably provide short and long
term PFM training.
3.7.2 Enabling Legal Framework
In cases where the existing laws, rules and regulations are not harmonised or do not
support public financial management, at the Central and Local Government, they will be
reviewed, amended and their enforcement will be pursued in earnest.
3.7.3 Effective Communication, Coordination and Dissemination
Effective communication, coordination, dissemination and sharing of information among
all stakeholders are vital towards the success of the programme. Further, dialogue
among key players is necessary for transparency and accountability of public finance
management.
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3.7.4 Commitment of Top Leadership and Key Stakeholders
Commitment of the top leadership and implementing agencies is vital for the success of
the programme; this will also ensure ownership and commitment among technical staff
who will be implementing the programme. PFMRP IV intends to carry out change
management programme that will create change champions and also develop
comprehensive communication strategy.
3.7.5 Effective and Functional M&E System
An effective and functional program monitoring and evaluation system (M and E
Framework) has been developed. It has been based on the PFMRP IV strategy focus
and influenced by the PEFA framework. This will assess whether or not the Programme
objectives are being realized and thus will be the basis for decision making.
3.8 Interventions of PFMRP IV
The MoF will be the main actor of the PFM reform agenda in collaboration with the
Planning Commission, PMO-RALG, PO-PSM, the Tanzania Revenue Authority, and other
key stakeholders. The Programme should clearly bring out the enhanced role of the
MoF as the custodian of Government resources in respect of planning and
recommending sound revenue and financing policies, allocating resources judiciously
and carrying out the required monitoring and oversight functions. Phase IV reforms will
be implemented across the following Five Key Result Areas:
3.8.1 KRA 1: Revenue Management
Improved revenue forecasting and mobilization is critical to support a credible and
sound budgetary process. Realistic revenue and cash flow forecasting, as well as
opportunities for cost recovery and cost-benefit sharing is a key aspect of reforms in
revenue management. The need to streamline the existing revenue policy function
39
within MoF has been identified in the action plan, as adequate tax statistics needed to
perform tax policy and other fiscal policy analysis are facilitated also with a view to
supporting more realistic revenue and cash flow forecasts. MoF will review the existing
legal and institutional arrangements for revenue collection. This will enable
development of a more appropriate model for revenue forecasts.
The Government will continue collaborating with development partners to improve
external resources management, integration with budget preparation and
implementation, to enhance predictability, accounting for and reporting on of public
resources. Furthermore, PFMRP IV will implement specific activities aimed at improving
retention scheme arrangements.
3.8.2 KRA 2: Planning and Budgeting
Despite the achievements made in planning and budgeting at central and local levels,
challenges still remain. PFMRP IV deems necessary to prioritize basic actions targeting
on macro-fiscal policy, planning, improved MTEF credibility, and extend the course of
adopting GFS2001 and CoFoG standards to facilitate program-based budgeting and thus
broaden the scope of the chart of accounts for enabling improved budget planning,
monitoring, recording, reporting, and accountability.
Medium-term expenditure framework
MTEFs exist for most MDAs and LGAs operating though with weak linkages between
recurrent and development estimates and between administrative and executing units.
One enduring limitation of MTEFs relates to the recurrent budget format, which is
mainly administrative (i.e., not program based) hence, it fails to capture the recurrent
costs that arise from development expenditure. In response to this, PFMRP aims at
establishing a policy-driven system that adheres to major upstream programmatic goals
which integrates recurrent and development spending into central operations of priority
programs and activities that bear results.
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Linking national development and institutional plans to budgeting
Concurrently, a methodology will be developed as part of the Medium Term Strategic
Planning and Budgeting Manual (MTSPBM) so as to enable the national development
planning and the budgeting system to articulate national targets and institutional plans
across public organizations. A global performance framework will also be formulated for
planning and linking the programmatic goals to the desired sector and institutional
results and measuring performance against national priorities at the various lines and
levels of accountability.
Results-based Budgeting System
All the above interventions will lay the ground for enabling the Government to gradually
transitioning to a Results-Based Budgeting System (RBBS) through a detailed action
plan. The objective of these activities are to make PFM systems more results-oriented
as well as to increase accountability and transparency; to provide and use information
on performance for policy planning and management in order to enhance efficiency and
effectiveness in budget preparation, execution and oversight. Introduction of RBBS will
ensure that financial resources are allocated on the basis of outcomes to be achieved,
by matching program costs with program results, and by comparative assessments of
program efficiencies, effectiveness and relative worth in producing the desired results.
3.8.3 KRA 3: Budget execution, accountability and transparency
This KRA aims at achieving greater predictability for spending units, increased efficiency
throughout the public sector and maintaining sustainable debt levels. Key activities will
address deficiencies in procurement processes, cash and debt management and
accounting and reporting.
Procurement
Most of MDAs and LGAs face capacity constraints in procurement and contract
management in implementing programs and ensuring achievement of value for money.
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PFMRP IV will focus on building capacity in the Procurement Policy Unit and in
preparation of procurement plans, bidding /tendering documents, evaluation of
bids/proposals negotiation skills and contracts management as well as asset
management. The capacity for PPRA will also be enhanced to carry out procurement
compliance audit and facilitate infrastructure for e-procurement. The policy and legal
framework for public procurement will also be instituted.
Cash and debt management
PFMRP IV has set out critical activities that will gear towards improving consolidation
and reporting of Government cash balances by closing numerous bank accounts held by
spending units; devising a Treasury Single Account (TSA) structure inclusive of revenue
and expenditure sub-accounts managed and maintained through the Bank of Tanzania;
allowing overnight sweeping and clearance of tax collections on a daily basis; and
building capacity of MDAs, RSs, LGAs and PAOBs in the development of accurate and
realistic revenues and expenditures projections. PFMRP will facilitate establishment of a
debt management office, consolidation and reporting of public debts by establishing a
single unified data base.
Accounting and reporting
PFMRP IV will implement activities aimed at improving the scope and quality of financial
recording and reporting. Moreover, the PFMRP will support harmonization of existing
accounting and reporting systems, review the legal and regulatory framework, and build
capacity of accounting cadre and the migration towards accrual accounting. Other
activities will target financial reporting and presentation of key budget execution reports
as well as other review and fiscal reports.
3.8.4 KRA 4: Budget control and oversight
PFRMP IV will act promptly to strengthen Internal Audit Department, oversight function
of the National Audit Office and TR capabilities to oversee the public finances of Public
Enterprises.
42
Internal control and internal audit
The programme will strengthen the Internal Auditor General’s Department within MoF
that will provide technical guidance to internal auditors within MDAs, RSs, PAOBs and
LGAs. Other activities include capacity building to internal auditors so as to conduct
audits in a wide range of PFM areas and enhance governance.
External audit
The main intervention of National Audit Office (NAO) in PFM reforms is to conduct a
timely independent examination of the financial performance and report to the public to
ensure accountability and compliance with financial regulations. These reforms will
support NAO to become a well performing Supreme Audit Institution (SAI) in Africa
espousing the principles of good governance and accountability, implementation of
value for money, performance auditing and other modern methods of managing and
operating an audit institution.
Capacity to oversee Public Enterprises and Government Institutions
The Treasury Registrar (TR) is responsible for overseeing management and financial
accountability of the Government’s interests as a shareholder in public enterprises and
Government institutions. It advises the Government on all issues pertaining to those
investments. PFRMP IV will continue supporting TR in order to perform its core
functions effectively and efficiently. The support will include: developing Public
Investment Management Database; management of Public Enterprise; Reviewing and
harmonizing public investments Acts; implementing M&E system for Public investments;
and building the capacity of public enterprises and Government Institutions.
Parliamentary oversight
The Public Audit Act stipulates that CAG reports shall be followed up by the
Parliamentary Accounts Committees (PAC, POAC and LAAC). The enforcement of CAG
reports are facilitated by Parliamentary Accounts Committees during execution of their
duties. Parliamentary accounts Committees constitute new members after every three
43
years and after General election. These members are required to be trained in
understanding financial statements, CAG reports and on interrogation skills in order to
enable them execute their functions effectively. The main intervention in respect of
Parliamentary Oversight Committees in PFM reforms is to build capacity and also by
conducting training to their members and facilitating them to conduct physical visiting
to the projects implemented by the Central and Local Government as well as the
Parliament Secretariat.
3.8.5 KRA 5: Change Management, Programme Monitoring and Communication
The programme will review key financial management information systems to increase
the efficiency by interfacing, co-ordinate and integrate for improved service delivery.
Also, it will Improve communication and public access to key fiscal information to
stakeholders while instituting change management and leadership.
IFMS and electronic services delivery
IFMS/EPICOR is recognized as an effective tool in financial management and reporting.
In general, there is inadequate coordination to deal with ICT management at the
Ministry of Finance leading into financial systems and tools that are not properly
integrated and harmonized. PFMRP IV will facilitate harmonization of systems and tools
like SBAS (Access), IFMS/EPICOR (SQL), RIMKU (Access), Plan Rep (Access), HCIMS
(Oracle), CS-DRMS (Oracle) and AMP (Oracle) including compatibility for effective
planning, budget management, accounting and reporting. Further, the Government will
continue to implement the recommendations specified in the CAG’s IFMS Review Report
of 2010.
Also, under the programme, some of the existing IFMS/EPICOR modules and
computerisation will be upgraded. IFMS/EPICOR will also be provided with the
opportunity to further developing and interfacing other systems such as aid
management, procurement and supply chain management, and fixed assets.
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The Government has rolled out EPICOR to all Ministries, Regions and 86 LGAs. The
Government will roll-out EPICOR to the remaining MDAs and LGAs, ensure effective
utilization of EPICOR and conduct training to staff. In contrast with previous PFMRP
efforts, the focus of IT-related activities will lie mostly on quality aspects, harmonization
of technological capabilities and technical resources, and other basic precepts before
EPICOR can be rolled out further within MDAs and LGAs.
Access to Key fiscal information
The GoT already makes available key fiscal information but there is a need to
communicate more and better to the targeted audiences. To achieve this, a
communication strategy will be developed as well as enhancing capacity.
Co-ordination and standardization of PFM training initiatives
One of the major components in the Phase IV program is PFM training. Inorder to lift
the whole system standardised and repetitive training against modules of PFM training
is needed across the system. This intervention is foreseen to lead to quality and
effectiveness gains with a cross cutting impact on the PFM system.
Change management and program monitoring
Success of the program depends much on the change management of the stakeholders
under which all program implementers will have to embrace. In order to succeed
continuous learning is crucial for component managers who are expected to be
instrumental as change agents for the change management process. Development of
work plans will be done to ensure that all are informed, that activities are planned in
line with the strategy and that activities are efficiently and effectively co-ordinated to
ensure that results are achieved. Internal monitoring and evaluation will be a key
element of the successful implementation of the reform programme.
45
Communication
Communication plays an important role in any change management. In respect of
interventions proposed herein, there is need for an effective communication that will
improve interaction between and among PFM stakeholders. The activities to be
implemented will include, developing communication Strategy, raising awareness of
PFM issues among stakeholders, developing and disseminating IEC materials and
reviewing communication structure between central Ministries and LGAs.
National systems and processes for intra-governmental transfers to LGAs
Intra-governmental transfers of funds are cross-cutting in nature and delays have been
experienced at different levels. The delays cause inefficiencies in the public service
delivery. In order to address the key challenges in the transfer system a mapping
exercise will recommend measures to streamline and rationalise the processes.
Support to Zanzibar
Mainland and Zanzibar have many interlinked PFM systems and are interdependent on
functional systems. The PFMRP IV will support the development of a comprehensive
strategy for PFM reforms in Zanzibar.
46
CHAPTER FOUR
4.0 INSTITUTIONAL ARRANGEMENTS
Successful implementation of a PFMRP requires the establishment of a robust
institutional framework. The institutions within the programme should work in a more
harmonised framework to support and coordinate the PFM reform process. Although
PFMRP implementation has been mainstreamed in the Government structure there is
still more need for change management and mindset to view it as part of normal
Government core functions. In addition, there is still low knowledge base on result-
based monitoring and evaluation among key stakeholders especially in MDAs and LGAs.
As a result there is incomplete, inconsistent and inadequate data, presentation of
process oriented reports and duplication of efforts. The success of the programme will
depend much on organizational arrangement which includes clear linkages and
collaboration among the various stakeholders and other reforms initiative and
coordination of components implementing the programme.
4.1 Internal Programme Implementation Arrangements
In terms of organization for managing PFMRP IV activities within MoF and other
beneficiaries of the programme, an Operational Manual has been developed. The
manual describes roles, responsibilities and processes and procedures to be followed in
implementation of the programme. The Manual will be amended from time to time as
required (see Volume II).
4.2 Programme Governance Arrangements
The programme Governance arrangements under PFMRPIII were well documented
however a number of challenges were experienced. There were a number of
shortcomings which need to be addressed during this phase. Some of the problems that
were encountered during Phase III governance arrangements included: irregular
meetings; inadequate separation of strategic and operational meetings; inconsistent
dialogue mechanism between GoT and DPs; and inadequate representation of key
47
stakeholders in the programme meetings. Issues that are addressed in the institutional
arrangements for Phase IV, include: frequency and sequencing of meetings; better
linkage of the meetings with the Government’s planning; budgeting and reporting
instruments and timeframe; separation of strategic issues from operational issues; and
linking PFMRP governance arrangements with those relating to other reforms,
representation of other key stakeholders and in close collaboration with RCU.
The PFMRP governance arrangements are intended to provide strategic guidance to the
programme through approving the plans and budgets of the programme; ensuring that
the programme management is meeting the needs of its clients; and monitoring the
implementation of PFMRP. The institutional arrangement of PFMRP IV comprises three
levels namely: Joint Steering Committee (JSC); Programme Management Committee
(PMC), Technical Working Groups (TWGs).
48
PFMRP IV ORGANOGRAM
FMRP IV INSTITUTIONAL ARRANGEMENT AND DIALOGUE
CHAIRMAN
AND
MEMBERS
CO-CHAIR
AND
MEMBERS
DP LEAD
JSC
PST
PMC DPSPFM
PROGRAM
MANAGER
SECRETARIAT
KRA 2
CB
TWG
PFM
ADVISOR
KRA 1
CPAD
KRA 3
ACGEN
KRA 4
IAG
KRA 5
DPD
-CPAD
-TR
-PMO-RALG
-CEF
-MDAs
-CB
-CPAD
-PMO-RALG
-PPRA
-PPP
-ACGEN
-CPAD
-GAMD
-IAG
-NAO
-TR
-DFMIS
-PMO-RALG
-GCU
-DPD
-ZNZ
- DAHRM
-ACGEN
49
4.3 Joint Steering Committee (JSC)
The role of the JSC will be to provide overall strategic guidance as well as review and
monitor the performance of the PFMRP. Being the highest level authority, JSC will
review the proposals from PMC, approve the budgets, action plans progress reports and
makes policy decisions. The JSC will be chaired by the Permanent Secretary MoF.
4.4 Programme Management Committee (PMC)
The PMC is the second level authority in the management of the programme. The role
of this group will be to scrutinize plans and budgets, progress reports that have been
prepared, reviewed and agreed at the Technical Working Group (TWG) level. The PMC
draws conclusions and present agreed recommendations for consideration by the JSC.
The PMC will be Co-chaired by the Deputy Permanent Secretary – PFM at the Ministry
of Finance and the designated chair of the PFM Development Partners Group (PFM
DPG).
4.5 Technical Working Group (TWG)
This level focuses on the implementation of the programme. The TWG consists of
designated component managers and DP counterparts. The role of the TWG will be a
forum for detailed interactive technical discussions in order to build consensus and
propose interventions for the way forward. TWG will thus review progress of
implementation of the programme. Meetings are held on a needs basis on consultation
throughout the implementation of the programme. The TWG forwards proposals for
PMC deliberations and approval.
4.6 Programme Management
The overall responsibility for the programme management rests with the Permanent
Secretary Treasury. The Deputy Permanent Secretary PFM will be responsible to
manage the programme on behalf of the Permanent secretary. The Director of
Planning Division is a designated Program Manager who is responsible for ensuring
smooth implementation of the programme on the daily basis. The PFMRP Secretariat,
headed by the Programme Coordinator, will support the Programme Manager in
coordination of PFMRP IV implementation. The Secretariat, among others will providing
50
technical support, quality assurance, ensuring linkages between PFMRP and other
reform programmes; liaising and sharing information with various stakeholders;
supporting monitoring and evaluation activities. The Secretariat will offer support and
facilitate meetings including logistics, reviews, coordinate preparation and execution of
strategic and annual work plans and program implementation.
4.7 PFMRP and other core reforms
The Reform Coordination Unit
PFMRP is among the public sector core reforms. The GoT has put in place a clear role
and mandate for the coordination of core reforms. These arrangements involve (1) the
Committee of the IMTC on cross-cutting reforms (2) The Technical Committee to
Reform Programme Coordinators (3) Public Expenditure Review (4) and the Cluster
Working Groups.
The Government has established the Reform Coordination Unit (RCU) under the Chief
Secretary’s Office. The unit advises and assists the Chief Secretary on the coordination
and leadership of core reforms for better achievements of results. RCU serves as the
Secretariat to the Committee of the IMTC on cross cutting reforms and chair the
Technical Committee of Reform Programme Coordinators.
As part of the design of PFMRP IV, programme will collaborate with the RCU through
seeking technical advice, participating in all scheduled meetings organized by both
parties and submission of plans, budget and reports.
51
CHAPTER FIVE
RESULT FRAMEWORK
5.1 INTRODUCTION
This Chapter shows how the results envisaged in this Strategic Plan will be measured as
well as the benefits that will accrue to its clients and other stakeholders. Furthermore,
the chapter shows how the various interventions to be undertaken during the five years
of the strategic planning cycle will achieve the overarching goal of attaining a Sound
financial management and discipline in public service delivery for sustainable
development. With the vision of becoming a centre of excellence for enabling sound
financial management, fiscal control and accountability
The chapter also show how the interventions will be monitored, the reviews that will be
carried out over the period and what type of evidence based evaluation studies and
analytical work to be undertaken.
5.2 The Development Objective
The paramount objective of PFMRP IV is to ensure improved public service delivery by
enhancing public financial management in the areas of Revenue Management, Planning
and Budgeting; Budget Execution, Accountability and Transparency; Budget control and
Oversight; Change Management and Programme Monitoring and Communications. This
development objective represents the highest level of results envisioned by the
programme. The achievement of this development objective, among others, will be
influenced by the availability of financial resources, competent staff, top management
commitment, and the demand for accountability on the part of citizens.
5.3 Link between PFMRP IV with other National Frameworks
This strategic plan is designed to address issues in Five Key result Areas (KRAs) which
contribute directly to attainment of Vision 2025. With regards to MKUKUTA II, PFMRP IV
Strategic Plan contributes directly to MKUKUTA II Clusters and MKUZA II.
52
5.4 Result Chain
PFMRP IV result chain consists of outputs, objectives, strategies, targets, activities and
inputs which broadly contribute to Vision 2025. Realization of PFMRP IV overarching
objective in the medium term will contribute to the achievement of MKUKUTA, Five
Years development Plan’s goals and other vices target as stipulated in Vision 2025. This
results chain will justify PFMRP use of the tax payer’s money into the various
interventions and thus contribute to the improvement of service delivery in the country
through sound public financial management.
5.5 The Result Framework Matrix
This matrix contains PFMRP IV impact, outputs, performance indicators, indicator
baseline, indicator target and milestone for the implementation period. The matrix
envisages how the development objective will be achieved and how the results will be
measured. The indicators in the matrix will be used to track progress towards
achievement of planned outcomes and objectives. The result framework matrix is
detailed below.
PFMRP IV MONITORING AND EVALUATION RESULT FRAMEWORK 2012-2017
Impact
Outcomes
Sound
financial
management
and discipline
in public
service
attained by
June 2017
KRA 1 Revenue Management:
Strengthened systems, processes and procedures for improving the operational
capability of the revenue collection by June 2017
KRA 2 Budgeting and planning:
Strengthened capacity of planning and budget management, including results and
program based budgeting, within MOF, MDAs and LGAs by June 2017.
KRA 3 Budget Execution, Transparency and Accountability:
Improved utilization of public resources in a more effective, efficient and transparent manner by June 2017
KRA 4 Budget Control and Oversight:
Improved adherence and enforcing of MDAs and LGAs to financial internal controls,
53
rules, laws, regulations and audit recommendations by June 2017
KRA5 Change Management, Program Management and Communication:
Improved management practices with increased accountability and leadership to better
manage performance of PFMRP by June 2017
Outputs Performance
Indicators
Indicator
Baseline 2011
Indicator
Target 2017
Milestones
KRA 1 Revenue Management: Strengthened systems, processes and procedures for improving the
operational capability of the revenue collection by June 2017
Output 1.1:
Improved quality
of forecasting of
fiscal aggregates
for three years on
a rolling basis
Aggregate
revenue out-
turn compared
to original
approved
budget (PEFA:
PI-3)
Actual domestic
revenue collection was
below 92% of
budgeted domestic
revenue estimated in
no more than one of
the last three years.
(PEFA: C)
Actual domestic
revenue
collection is
below 94% of
budgeted
domestic
revenue in no
more than one
of the last three
years. (PEFA: B)
Study on
forecasting targets and actual revenue
collection by June 2013
Recommendations
from study on
forecasting targets and actual revenue
collection informs budget
preparations for budget 2014/15.
Increase in
number and
quality of
participating
MDAs and
LGAS with
staff capable
providing
accurate,
realistic
revenue
projections
Less than 5% of
participating MDAs
and LGAS providing
accurate, realistic
revenue projections in
2010/11
50% of
participating
MDAs and LGAS
providing
accurate,
realistic revenue
projections by
2017
A team of trainers
in revenue forecasting
developed by June
2014 (milestone to be reviewed in line
with recommendations
from the study)
Output 1.2: The
Government
improves
efficiency in
domestic revenue
mobilization both
at the policy and
the administration
levels by updating
Increase in
collection of
Total and non-
tax revenues
as percentage
of GDP
Total revenue
collection was 16.5 %
of GDP in 2010/11
Non-tax revenue was
1.2% of GDP in
2010/11
Total revenue
collection will be
at least 17.8%
of GDP by
2013/14-
Non-tax
revenue will be
at least 1.9% of
The study on Non
Tax Revenue
(NTR)-“Integration
and Harmonization of Revenue
Collection Systems” completed by
November 2013.
Submission of a bill
to Parliament to enact Tax
54
Outputs Performance
Indicators
Indicator
Baseline 2011
Indicator
Target 2017
Milestones
legal instruments
towards
international best
practices
GDP by 2013/14
Administration Act
for the purpose of establishing a
common tax procedure among
different taxes
collected by Tanzania revenue
authority (TRA) by November 2013
Review Laws, rules
and Regulations for Local Government
revenue system to
improve LGA’s own sources in line with
best practices by June, 2016.
Take policy action
to improve revenue
mobilisation from natural resource
sectors by June 2014
The action plan to
implement the recommendations
from review of non
tax collection developed and
implemented by 2016
Computerised
revenue collection
to at least 50% of participating MDAs
and LGAs by 2016
Increase in
Revenue from
Parastatals as
Revenue from
Parastatals was 0.55
% of total approved
Revenue from
Parastatals will
be 4% of total
New TR's Bill
presented to the Parliament by June
2013
55
Outputs Performance
Indicators
Indicator
Baseline 2011
Indicator
Target 2017
Milestones
percentage of
Approved
domestic
revenue
collection
domestic revenue
collection in 2010/11
approved
domestic
revenue
collection by
June 2014
150 Parastatals’
Acts Reviewed to
be in line with the New TR Act by
June 2014 TR’s Office
Capacities
enhanced by June
2014 M& E system for
Parastatals
reviewed and implemented by
June 2015
Tax
exemptions as
a percentage
of GDP
2.2% Target :
2012 ; 1.9%
2013; 1.6%
2014: 1.2%
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
Output 1.3:
Strengthened
capacity of local
government
authorities to
collect revenue
by 2015
Local
Government
Own source
revenue to
GDP
Actual revenue
collection by LGAs
2010/11: Tsh 158,280
million and 0.46 % of
GDP
Local
Government
Own source
revenue will be
1.5% of GDP
Completed
assessment and evaluation of
revenue potential for all major own
sources of revenue
to all LGAs by June 2013
PMO - RALG staff
and Finance Management
Officers at RS to be trained in tax
revenue plans and
budgets to spearhead LGAs
tax reviews and reforms. June
2013
Local Authorities
Tax administration teaching and
practice modules established and
56
Outputs Performance
Indicators
Indicator
Baseline 2011
Indicator
Target 2017
Milestones
TOT completed for
all finance management staff
at the regional level. June 2013.
Four (4) Revenue
Accountants, 3
Council management
team members and 1 FMO from
each LGA and RS are trained on
own source
revenue management by
June 2014. Establishment of
known and clear
revenue data
base by each source of
revenue, presence of
trained personnel and a clear follow
up arrangement
at PMORALG and RS levels by June,
2014.
Local
Government
legislation
reviewed by
2016 (Act No.
7, 8 and 9)
The last amendment
of the Local
Government Finances
Act No.9 of 1982 was
done in year 2002.
The act does not
adequately address
issues of equity,
change of technology
and other
administrative issues
to enhance local
revenue mobilization
considering the
present and future
LGAs circumstances.
Local
Government
Finances Act
No. 9 reviewed
by 2014
Completed study
on the effectiveness,
relevancy and sufficiency of the
provisions of the Local Government
Finances Act No.
9 by June, 2013. A bill for an act to
amend the Local
Government Finances Act No.9
of 1982 is
finalized and submitted to the
Cabinet by February, 2014
57
Outputs Performance
Indicators
Indicator
Baseline 2011
Indicator
Target 2017
Milestones
Output 1.4:
Increase of donor
funding that flows
through the
exchequer system
by 2016
Percentage of
disbursement
of direct
project fund
portfolio via
the exchequer
20% 50% National
framework for
managing development co-
operation (JAST) reviewed and put
in operation by
December 2012 Revised JAST
and AMP user
guideline clearly communicated to
both parties by December 2012
Analysis of trends
of the direct
project fund portfolio
disbursed via the exchequer system
published and
shared annually by June 2015
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
KRA 2 Budgeting and planning: Strengthened capacity of planning and budget management,
including results and program based budgeting, within MOF, MDAs and LGAs by June 2016.
58
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
Output 2.1:
Strengthened
capacity of MDAs,
RSs and LGAs in
implementing
program based
budgeting by
June 2016.
Presence of
Programs-
based budget
classification
(PI-5)
The 2008/09 budget
formulation and
execution is based on
administrative and
GFS –compatible
economic
classification. There is
no CoFoG-based
functional classification
and budget
documentation and
reporting system (PI-
5C)
The budget
formulation and
execution will be
based on
administrative ,
economic and
functional
classification
(Using at least
the 10 main
CoFoG
functions), using
GFS/CoFoG
standards or a
standard data
can produce
consistent
documentation
according to
those standards
(PI-5B)
All sub programs,
objectives and
performance indicators defined
by Dec 2012 Chart of accounts
Modified to
accommodate
program based budgeting by
August 2013 (ACCGen)
MTEF reviewed to
make program based budget
compatible by
September 2014 Progress on the PB
Action Plan
implementation
Increase in
number of
MDAs and RSs
with skilled
staff for
implementing
a program
based
budgeting
In 2011, there are no
staff in MDAs and RSs
with necessary skills to
implement program
based budgeting
95 % of MDAs
and RSs have
staff with
necessary skills
to implement
program based
budgeting
Completed phased
training for all
MDAs and RSs by 2014
Completed phased
training for all LGAs
by 2014
Output 2.2:
Increased
effective
utilization of
Planning and
budgeting tools
by 2016
Percentage
increase in
number of
MTEF budgets
meeting the
MTSPBM
requirements
by 2016
In 2011, less than
75% of MTEF budgets
are meeting the
standards of MTSPBM
98% of MTEF
budgets are
meeting the
MTSPBM
standards
MTSPBM reviewed
by June 2013 Sixty MDAs, 21 RSs
and 133 LGA
trained in MTSPBM
by June 2014 Reviewed MTSPBM
to be applied during
FY 2013/14 Annexes to budget
book volume II for
59
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
Executive Agencies
completed by June 2014
Orderliness
and
participation in
the annual
budget
process by
2016 (PI-11)
i) A comprehensive
budget calendar exists
but delays are
sometimes
experienced. MDAs
have 6 – 8 weeks to
submit their budget
ii) A comprehensive
budget circular and
budget preparation
guidelines are issued
but the MDAs ceilings
are not always
approved by cabinet
before issue (B)
i)A clear annual
budget calendar
exists, is
generally
adhered to and
allows MDAs
enough time (at
least six weeks
from receipt of
budget circular)
to meaningfully
completes their
detailed
estimates on
time
ii) A
comprehensive
and clear budget
circular is issued
to MDAs which
reflect ceilings
approved by
cabinet or
equivalent prior
to the circular
distribution to
MDAs(A)
Action plan on
implementation of
recommendations on budget legal
framework completed by June
2013 At least 10 PER
Main Dialogue
meetings held by
June 2016
Percentage
reduction in
deviation of
actual
expenditure
from approved
budget
In 2011, the
percentage of
deviation of actual
recurrent expenditure
MDAs budget at vote
level compared to
approved budget but
excluding salary
adjustments,
contingency and debt
Actual
expenditure
deviated from
budgeted
expenditure by
an amount
equivalent to
not more than
10%
Phased training to
MDAs, RSs and LGAs
Budget Committees on
resource prioritization
and planning
60
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
service was at 13.7%
Quality and
timeliness of
in-year budget
report (P-24)
by 2016
Comparison to budget
is possible only for
main administrative
headings. Expenditure
is captured either at
commitment or at
payment stage (not
both)
Reports are prepared
quarterly( Possibly
excluding first
quarter), and issued
within 8 weeks of end
of quarter
There are some
concerns about the
accuracy of
information, which
may not always be
highlighted in the
reports, but this does
not fundamentally
undermine their basic
usefulness (C+)
Classification
allows
comparison to
budget but only
with some
aggregation.
Expenditure is
covered at both
commitment and
payment stages.
Reports are
prepared
quarterly and
issued within 6
weeks of end of
quarter
There are some
concerns about
the accuracy,
but data issues
are generally
highlighted in
the reports and
do not
compromise
overall
consistency/usef
ulness (B)
Mechanism for quality
assurance of Quarterly Budget Performance
Reports (level of
detail, timeliness, accuracy, consistency
and usefulness to decision makers, as
well as for budget transparency to
citizens) established by
June 2013
Output 2.3:
Strengthened
capacity of LGAs
for MTEF
preparation by
2015
Comprehensiv
eness of
information
included in
budget
documentation
(PI-6)
Currently there no
sufficient information
on LGAs revenue
planning and
budgeting which is
included in the budget
documentation.
Supportive and
verifiable
revenue data
and information
to be included in
the LGAs budget
documentation.
Proposal for
budget
information to be included in the
Budget guideline
to be submitted to National
Budget Guideline committee by
October annually. Recommendation
s of various
studies on LGAs
budget allocation
61
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
formulas
reviewed by December, 2012
which will include recommendations
to be made by
the fiscal decentralization
taskforce in LGRPII by June
2014. The M&E framework under
LGRPII included
performance indicator to
measure application of
formulae based
allocations to actual fund
transfers. Agreement on
improvement of
LGAs budget allocation
formulas among
the Sector Ministries (PMO-
RALG, MOF, PO-PSM and Sectors)
completed by
June,2013
Various
studies in
fiscal transfers
and
decentralizatio
n process in
Tanzania
indicates that
Budget
allocation to
LGAs reflects a
more
inequitable
distribution of
resources to
LGA, and that
Currently budget
allocation formula
follow, population,
land area and poverty
level,
Budget
allocation
formula reflects
resource needs,
distances from
service facilities,
special area
diseases,
number of
projects to be
implemented,
number of
orphans etc.
All LGAs budget
allocation formulae
reviewed by June,
2014 All reviewed LGA
budget allocation
formulae applied in the budget
preparation during 2014/15 for the FY
15/16 budget.
Monitoring
arrangements in place for measuring
deviations in actual releases against all
formula-based
allocations to LGAs for FY 15/16.
62
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator
Target 2017
Milestones
the allocation
formulae are
not fully
applied. There
is a need to
revisit all the
existing
budget
allocation
formulae to
clearly reflect
equitable
allocation of
financial
resources by
June 2016.
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 3.1:
Improved
public
procurement
performance
by PEs by
2015
Average level
of compliance
of i) all
procuring
entities (for
follow-up
audits) and ii)
the top 20
procuring
entities with
the (revised)
Procurement
Act 2011
Competition,
Old target
(63%+75%)/2=68%
i) 66 % of tenders
under open tendering process were
advertised in fiscal
year 2006/2007 (B) ii) Using less
competitive procurement
methods is allowed
with justification. PPRA audits in
2008/09 show that
Target will be
based on new set
of indicators
+20% of baseline
(new BL by
October 2012)
i) Accurate data on
the method used to award public
contracts exists and shows that
more than 75% of contracts above
the threshold are
awarded on the
Annual PPRA
audit results confirm positive
trend on a yearly basis
Revised
procurement implementation
and monitoring
tools issued by December 2013
New Public
Procurement Act,
63
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
value for
money and
controls in
procurement
(PI – 19)
the great majority of contracts now use
the correct methods
(B) iii) A comprehensive
complaints mechanism operates,
but for unknown
reasons the number of complaints has
declined (B)
basis of open competition(A)
ii) Other less
competitive methods when
used are justified in accordance with
clear regulatory
requirements (A) iv) A process (defined
by legislation) for submission and
timely resolution of procurement
process complaints
is operative and subject to
oversight of an external body with
data on resolution
of complaints accessible to
public scrutiny (A)
2011, Regulations and
Tools
disseminated to major PEs and
other key stakeholders by
December 2015
Procurement
plans aligned with MDAs, LGAs
and parastatal Institution
Strategic plans by June 2015
Value for money
procurement
enhanced through
Framework contract in
procurement of
common use items and
services by June 2017
PPRA operational
and outreach
capacity strengthened by
June 2014
Increase in
number of PEs
using e-
procurement
system (PMIS)
Currently, 203 PEs are
using PMIS
(Procurement
Management Information
System)
393 PEs will have a
functional PMIS and
pilot e-procurement
system will start
functioning by Nov
2016.
All (393) PEs will have
a fully functional PMIS
as a reporting tool for
procuring entities to report back to PPRA
by Nov 2014 e-procurement will
start functioning as
pilot stage by Nov
2016
64
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Increase in
number of PEs
reached for
procurement
audit
Currently 330 PEs have
already been audited.
In June 2012 all 393
PE’s will be audited,
then beyond F/Y
2012/2013 will be “
Follow-up Audits
(should be repeatedly
process especially on
Top 20 PE’s
393 PEs audited by
June 2012
Follow up audit of 100
PEs to be done
annually by 2016
Annual Procurement
Performance
Evaluation Report
prepared and published Annually
Output 3.2:
Strengthened
public sector
procurement
by June 2015
Number of
Public
procurement
regulations
issued
Number of
Skilled
procurement
staff
None( to be established
after baseline study)
None( to be established
after baseline study)
% increase in number
of Public procurement
regulations issued
% increase in number of
skilled Procurement
personnel in PEs
Action plan for
implementing PPA is
developed by
December 2012
(Milestones to be
revised after
finalization of the
action plan)
New public
procurement
regulations prepared
and issued by June
2013
Procurement
training needs
assessment exercise
completed by June,
2013
[300] procurement
staff trained on
public procurement
by June, 2017 as
per TNA
Strategy on public
procurement human
resource developed
and disseminated by
June, 2015
Procurement and
65
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
supplies staff
database
maintained and
updated by
December, 2015
Presence of
procurement
policy draft by
June, 2013
PPDs’ capacity
enhanced by
June, 2013
National
procurement
policy and
procurement
law
synchronised
None
None
None
None
National procurement
policy developed and
disseminated to
stakeholders
i) Motor vehicle
and office
equipment
acquired
ii) Short training
for 20 members
of PPD staff
conducted
Public Procurement Act
2011 reviewed
National
procurement
policy draft
finalized by June,
2013
Stakeholders’
comments
incorporated by
June, 2013
PPDs’ capacity
enhanced by
June, 2013
20 members of
PPD staff
equipped with
skills on public
policy
formulation,
implementation
and evaluation
by June, 2014
National
procurement
policy developed
and shared by
December, 2014
66
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Stakeholders
acquainted
with the
National
procurement
policy
National
procurement
policy strategy
in place by
December,
2013
None
None
800 Stakeholders
acquainted with the
National procurement
policy
National procurement
policy strategy
implemented
National
procurement
policy strategy
developed and
implemented by
June 2015
Printing and
uploading the
NPP on the
website by June,
2015
National
procurement
policy and
procurement law
synchronised by
June, 2015
Monitoring the
implementation
of the National
procurement
policy by June,
2015
Evaluation and
feedback of the
implementation
of the National
procurement
policy by June,
2016
1000
Stakeholders
acquainted with
the National
procurement
Policy by June,
2016
Output 3.3:
Strengthened
Increase in
number of
10 staff with cash
management skills
610 staff with cash
management skill
600 staff of MDAs and
LGAs Trained on cash
Management using
67
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
capacity of
MDAs, RSs
and LGAs in
Cash
management
by 2015
staff with
adequate skills
on cash
management
standardized materials by June 30 2014(
Milestones to be
reviewed and aligned after the East
AFRITAC recommendations on
Cash and Banking
Arrangement Mission)
Decrease in
the aggregate
number of
bank accounts
operated by
LGAs by 2015.
The aggregate number of
bank accounts operated
by LGA are 4,736 in 2011
3938 bank accounts
will be closed by
December 2013
Six bank accounts
operated by each
LGAs by December 2013
68
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 3.4:
Strengthened
public debt
management
capacity by
2015
Recording and
management
of each cash
balance, debt
and debt
guarantees
(P1-17) by
2016
i) The various databases
containing debt data are
currently in the process
of being merged. Data
quality is considered fair
and minor reconciliation
problems occur. For the
data entered in CS DRMS,
statistical reports are
regularly produced (B)
ii) The balances of
several government bank
accounts in commercial
banks are not
consolidated, though
there is a plan to do so
(D).
iii) Contracting of loans
and issuing guarantees is
approved by Minister of
MOF in line with rules,
but there are no ceilings
(C)
i) Domestic and
foreign debt records
are complete, updated
and reconciled on a
monthly basis with
data considered of
high integrity.
Comprehensive
management and
statistical reports
(cover debt service,
stock and operations)
are produced at least
quarterly (A).
ii) Calculations and
consolidation of most
government cash
balances take place at
least monthly, but the
system used does not
allow consolidation of
bank balances (C).
iii) Central
Government’s
contracting of loans
and issuance of
guarantees are made
within limits for total
debt and total
guarantees (B).
The agreed
actions arising from the Feb.
2012 World Bank
debt management
report shared with key
stakeholders by
July 31, 2012 (Milestones to be
reviewed) Debt
management
policy developed and shared by
June 2013
Capacity of 50
Public Debt staffs enhanced by
June 2014 Review of
Government
Loans,
Guarantees and Grants Act by
June 2014 Debt
Management
department established by
June 2016
69
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 3.5:
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.
Quality and
timeliness of
annual financial
statements (PI-
25)
i) Central Government final accounts include revenue, expenditure and bank balances, and since 2007/08 data on most financial assets and liabilities are disclosed with few exceptions. (B)
ii) Financial Statement are submitted for external audit within 6 months of the end of fiscal year. (A)
iii) Cash basis IPSAS has been applied since 2007/08. (B
i) Central Government final accounts disclose full information on revenue, expenditure and bank balances, financial assets and liabilities (A)
ii) Target for 2013 -125 staff and 2014-125
iii) (ii)Financial Statements are submitted for external audit within 6 months of the end of fiscal year. (A)
iv) IPSAS applicable to all financial statement
Completed review of the IPSAS guideline issued by PMORALG in 2008/09 to accommodate the recent IPSAS updates by June 2013
Training to the MDAs, RSs and LGAs accounting officers to develop awareness on IPSAS Accrual by 2013
Capacity building to 250 staffs from MDAS and RSs and Embassies to enhance skills in IPSAS accrual by 2014
Public Finance Act No.2001 and Regulations reviewed to address migration to IPSAS accrual by June 2016
Consolidated template of financial statements to include MDAs, Rs, LGAs, Controlled entities &GBEs developed by 2016
250 government accountants in MDAs /LGAs trained in IPSAS accrual and
70
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Stage of the
transition
confirmed
against
approved action
plan.
Reports of the
Auditor General
confirm
improvement
The decision to transition
all government accounts to
full accrual accounting has
been made but detailed
action plan has not been
finalized or approved.
2009-10 Government
accounts received an
adverse opinion.
Central Government final
accounts include revenue,
expenditure and bank
balances, and since
2007/08 data on most
financial assets and
liabilities are disclosed with
few exceptions. (B)
Financial Statement are
submitted for external
audit within 6 months of
the end of fiscal year. (A)
Cash basis IPSAS has been
applied since 2007/08. (B)
IPSAS Accrual migration
action plan has been
completed approved and
is in process of
execution.
Implementing
migration plan as
targeted.
Quality and integrity of
government financial
statements is improved
as evidenced by the
reports of the Auditor
General
Financial Statements are
submitted for external
audit within 6 months of
the end of fiscal year. (A)
accrual modules for Epicor by September 2013
Plan for migration towards IPSAS Accrual accounting is completed by December 2013.
Plan is approved for execution and stakeholder information sessions have been completed by January 2014
All legislative and policy supports decisions have been identified by December 2014
Milestones for the transition have been identified and approved Eg Public Finance Act No.2001 and Regulations amendments by October 2014
Plan to integrate all RSs and LGAs operations into the centralized IPSAS accrual architecture is completed and PMO RALG is fully engaged as a stakeholder by December 2014
71
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 3.6:
Improved
accountability
in
management
of
Government
Assets for
supporting
migration to
IPSAS Accrual
Number of
MDAs which are
now reporting
their financial
position
through IPSAS
Accrual
Number of
MDAs which
have been
valued and
uploaded in the
EPICOR
None
20 MDAs( 28%) have been
valued and uploaded in
EPICOR
% increase of MDAs
reporting their financial
position through EPICOR
asset management
module by 2016 (Targets
to be set after migration
action plan towards
IPSAS Accrual
Accounting is
completed)
% increase of MDAs
valued and uploaded in
EPICOR by June 2016
(Targets to be set after
migration plan towards
IPSAS Accrual
Accounting is
completed)
Uploading of 16 MDAs in EPICOR by December 2012
Asset Management(tracking) software acquired by March 2013
40 staff(25 regional heads(RSVs) and 15 from HQ) trained on asset management by December 2013
Asset Management Policy prepared and submitted by June 2015
Valuation of Government assets in 34 MDAs and RSs completed by June 2016
Progress against target reported annually.
KRA: 4 Budget Control and Oversight: Improved adherence and enforcing of MDAs and LGAs to financial internal controls, rules, laws,
regulations and audit recommendations by June 2016
Performance
Indicator
Indicator Baseline 2011 Indicator Target 2017 Milestones
Output 4.1:
Increased
coverage and
quality of the
internal audit
functions by
2016
Percentage
increase in
unqualified
opinion in the
external audit
report for MDAs
and LGAs
54% of MDAs and 65% LGAs
obtained unqualified opinion
in 2009/2010
65% MDAs and 75% LGAs
will get unqualified opinion
in 2015/2016
Operational plan developed and approved by June, 2013
Internal audit manual/guidelines, standards and quality assurance improvement
72
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
programme, which complies with international standards and best practices, will be in place by June 2013
Effectiveness of
internal audit (PI-
21)
i) Internal audit function exists in most MDAs, and it is estimated that 20 percent of staff time is allocated to system based reviews and high risk areas (C)
ii) Reports are issued for Most MDAs but these are not copied to NAO (C)
iii) To some degree actions are taken by management on major issues but often with delays (C)
i) Internal audit is operational for all Central and Local government entities, and generally meet professional standards. At least 50% of
staff time is
allocated to
system based
reviews and high
risk areas.
ii) Reports adhere to a
fixed schedule
and are
distributed to the
audited entity,
Ministry of
Finance and NAO
(B)
ii) Action by management on internal audit findings will be taken within one month after issuing a report and should be comprehensive across Central and Local government entities (B)
Effective internal audit units and audit committees established to all MDAs and LGAs by June 2016
The Pilot stage of Computerised Audit will be finalized by June 2014.
Computerised Audit in place by June 2016.
550 internal auditors and other stakeholders trained in risk management process and risk based audit by June, 2016
73
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Number of staff
equipped with
skills on risk-
based audit
100 staff trained in risk
based internal audit
Technical Audits conducted for
20 Projects in 2011
550 internal audit staff
are trained in risk based
audit
70 Technical Audit
conducted by 2016
Technical Audits are conducted for 70 Projects by June, 2014
Output 4.2:
Strengthened
External audit
functions by
2016
NAO reaches
AFROSAI-E
Level 3
Increase in
number of NAO
staff capable of
issuing audit
reports as per
international
technical and
professional
Level 2
NAO did not reach at level 3 in
2010 as planned because of
lacking two criteria. Out of 10
criteria, NAO cleared 8criteria.
Other 2 criteria are (1) NAO
staff should not be Civil
Servants, and (2) Appointment
of CAG by the Parliament.
A committee was formed to
conduct legal review and will
submit a report on needs of
legal amendments to reach at
level 3.
The committee members
visited South Africa, Kenya and
Uganda.
Most Auditors are
accommodated in Auditees
premises
100 Auditors trained on Risk
Based Audit
One VFM report is produced
by NAO staff each year without
technical assistance by
NAO to reach Level 3 by
2016
Capacity of NAO audit
service strengthened by
2016
80% of Auditors to have be
accommodated in own
offices
The committee report on needs of legal amendments (existing laws) to contribute towards reaching level 3 submitted to the attorney General and awareness by December 2012
50% of Auditors to be accommodated in NAO own offices by 2014
300 Auditors trained on Risk Based Audit and 200 in IT audit by 2014
2 Value for Money audit reports to be produced each year by NAO staff without technical assistance
74
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
practices
Value for Money
Audits to be
conducted by
NAO staff with
minimum
technical support
by external
Consultant
Adoption and
application of
International
auditing
Standards in all
audit assignments
external Consultant
200 auditors trained on
International standards on
auditing (ISSAI,
IPSAS.ISSAI,IFRS,ISA)
800 Auditors trained on
Risk Based Audit and 400 in
IT audit
Five value for money audit
reports to be produced
each year by NAO staff
without technical
assistance from external
consultant
800 auditors trained on
International standards of
auditing and Full adoption
of International audit
standards
from external consultant by 2014
300 Auditors trained on international standards of auditing and full adoption of International Audit Standards by 2014
Number of MDAs.
LGAs and
Parastatals
reached for
financial audit
All 86 MDA, 134 LGAs and
about 122 Parastatals were
covered by Financial Audits.
All MDA, LGAs and
Parastatals are covered by
Financial Audits by 2016
Closing of books of accounts for Parastatals harmonized and audit modalities agreed by 2014.
Scope, nature and
follow-up of
external audit (PI-
26) by 2016
i) In the last three years, the audit report, including consolidated financial statements of government, was presented to the legislature six months after the receipt of financial statements (B)
i) Audit reports are submitted to the President within 9 months (per the Public Audit Act) of after the end of the financial year.
ii) Fully operational and easily accessible database to support
Audit methodology in line with ISSAIs guidelines adopted by June 2013
Scoping study to ascertain the parameters of the outstanding matters Database is completed by November 2012
75
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
ii) No electronic system currently exists to consolidate and easily access data regarding outstanding audit findings and recommendations, including their age.
Government’s efforts to reduce outstanding matter(findings and recommendations) .
Establish a database that will separate findings (monetary and non monetary) and recommendations including by age, and record follow up actions (i,e matters closing) by December 2013.
Increased
application of ICT
in auditing and
connectivity (by
Wide Area
Network ) of NAO
offices
20 staff trained on ICT
application in auditing
NAO offices are not connected
One TeamMate module
(Electronic working papers) is
applied in auditing
600 Auditors trained on
Audit Commanding
Language (ACL) and other
audit based software
NAO Headquarters is
connected by all 21
regional offices using WAN
by 2016
All five Teammate modules
applied in auditing by 2016
200 Auditors trained on audit commanding language (ACL) and other audit based software by 2014
NAO Headquarter is connected to 10 Regional offices using WAN by 2014
Two of five Team Mate modules applied in auditing by October 2014
Output 4.3:
Improved
transparency on
audit reports
(central, local
and parastatal
levels) to
strengthen
“Citizen Audit
Report”(simplified
audit reports
accessible by the
general public)
are published
4 Consolidated audit reports
(central, local, POABs and
VfM/Performance) are publicly
available on the NAO website
after tabling.
All General audit reports
are accompanied by a
‘citizens audit report’ (short
summary of the key audit
findings and
recommendations, in both
Swahili and English) and are
available in a timely
Citizen audit reports available for the 4 General audit reports by June 2013 and onwards on annual basis.
76
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
scrutiny and
accountability.
NAO set up a booth at Trade
Fair (Saba Saba) and Public
service week where general
audit reports are distributed to
visitors.
manner (within 4 weeks
after tabling) on the NAO
website and at NAO offices
all over the country by
2016.
Output 4.4:
Improved
performance of
parastatals by
June 2016.
Increase in
number of
Parastatals
implementing
performance
contracts by June
2016
2 Parastatals (TRL & TPA) were
implementing Performance
contract in 2009
All Parastatals will be
implementing Performance
Contracts by June 2016
Ten Pilot Parastatals Signed Performance contracts with TR by June 2014
Oversight of
aggregate fiscal
risk from other
public sector
entities (PI-9) by
2016
There is weak Monitoring of
Parastatals as their final
number is still to be
established and their
consolidated overview is
missing (PI-9: D)
All Parastatals will submit
fiscal reports including
audited account to TR and
consolidates overall fiscal
risk issues into an Annual
TR Financial Statements (B)
Database on Parastatals set up and functioning by December 2014
Monitoring framework for Parastatals set up by June 2014
Increase
compliance rate
on TR’s Act by
Parastatals by
June 2016
Compliance rate on TR’s Act by
Parastatals is below 70% in
2010/11
Compliance rate on TR’s
Act will be 100% by June
2016
Mechanism for measuring Parastatals’ compliance rate developed by June 2014
Output 4.5:
Strengthened
capacity of
oversight
functions of
Parliamentary
Accounts
Committee in
Tanzania
Number of PAC
members trained
Evidence of PAC members
making follow-up on
financial audit
recommendations in the
respective MDAs and LGA
Capacity building interventions to PAcs conducted
77
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Mainland
KRA:5 Change Management and Programme Management: Improved management practices with increased
accountability and leadership to better manage performance of PFMRP:
Outputs P-Indicator Indicator Baseline 2011 Indicator –Target
2017
Milestone
Output 5.1:
Coordinate
Integration,
interfacing
and
rationalization
of
Government
financial
systems.
Interface
central and
local
Government
financial
management
system and
tools
MDA /LGA IFMIS systems
are not harmonized and or
integrated and are not
being centrally managed.
Stand alone software
continues to be acquired
and implemented.
DFISM with overarching
technical control for all
government IFMIS
systems is fully staffed
and operational.
ICT Infrastructure
capable of supporting
approved systems
architecture is in place
All Government financial
systems ( SBAS, PlanRep,
RIMKU, IFMS) have been
integrated and
interfaced and financial
data is smooth
exchanged between
systems.
162 LGAs, 25 RSs and 3
institutions under PMO
RALG connected with
ICT mapping exercise showing location and owners of all and peri-financial software commenced with inception report published by December 2012. (refer PAF 2012)
Stakeholder coordination meetings held to gather input and agree on cross functional responsibilities for financial systems Planning held on by December, 2012
Sequenced, prioritized and costed action plan to bring all GoT financial and peri-financial software under one common Government financial systems architecture with supporting technical, infrastructure and management
78
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
IFMIS by Dec.2015
structures completed and approved by the GoT by June, 2013
Integration/Interfacing plan is engaged and series of planned actions are being executed and completed by October, 2015
133 LGAs are connected to
the IFMS
167 LGAs, 25 RSs and 3
institutions will be
connected to the IFMS
IFMS infrastructure installed to new 34 LGAs, RSs and PMORALG institutions and connected to central server at Dodoma and MoF by June 2013
Evidence of
analytical
reports
generated from
the system
available at
MDAs and LGAs
level
133 LGAs, 21 RSs and 3
PMORALG institutions could
produce.
Operation Reports, and
Management Reports
162 LGAs, 25 RSs and 3
Institutions will be able
to produce;
Operation Reports
Management Reports
Final account reports (Financial Statements), and
Other reports like Council financial and development report s (CFR & CDR), Mkukuta strategies implementation report by target, etc.
MoF IFMS linked to PMO-RALG IFMS to the immediate capture of the Approved Budget and all Exchequer transfers to RSs and LGAs respectively by June 2013.
Completed capacity building to key users of IFMS from all LGAs, RS and PMORALG institutions by June 2013.
Audit of IFMIs in LGAs conducted by June 2015
Output 5.2:
Utilization of
Upgraded
version of
EPICOR module are not
Upgraded EPICOR with
EPICOR system upgrade completed by
79
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
EPICOR
modules
Increased
from seven
to ten
EPICOR with ten
modules in-
place. The new
modules are:
Multi – Site Management.
Replication Server License.
Advanced Financial Report Designer
fully utilized ten modules in-place December 2014
ACGEN staff capacity enhanced by December 2014
Training for IFMS end users on the upgraded modules conducted by December 2014.
EPICOR is able to provide real-time information to all LGAs on flow of funds by July 2015
Output 5.3:
All software
development
and module
upgrades are
coordinated
with the
overarching
plans for ICT
integration.
Number of
systems that
are linked into
an IFMIS
platform and
available for
common use
ICT Planning is single
purpose and not
coordinated with other
harmonization activities
All software
development is
integrated within a fully
rationalized ICT
architecture.
DFISM is operationalized and controls are put in place to manage software acquisition and development by December, 2012.
DFISM staff capacity enhanced by June, 2015.
Output 5.4:
Improved
communicatio
Public access to
key fiscal
The government makes
available to the public 5 out
of 6 types of information,
The government makes available to the public 5 out of 6
The Approved National Budget is published on Ministry of Finance
80
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
n and public
access to key
fiscal
information to
stakeholders
information:
1. Annual
budget
documentation,
2. In-year
budget
execution
reports,
3. Year-end
financial
statements,
4. External audit
reports,
5. Contract
awards,
6. Resources
available to
primary service
delivery units
(PI-10)
but two of them are not
complete: in-year budget
execution reports and
contract awards. Resources
available to primary service
providers are not published
(A)
Special surveys were
undertaken within the last
three years, but their
results and methodologies
used have not been seen
(D)
types of information- (A)
Special surveys
undertaken within the
last 3 years have
demonstrated the level
of resources received in
cash and in kind by
either primary schools
or primary health clinics
covering a significant
part of the country OR
by primary service
delivery units at local
community level in
several other sectors (C)
website by September each year.
Publish Citizens Budget by November each year.
A Year-End Report (budget out turn) comparing the actual budget execution to the enacted budget is published on Ministry of Finance website by October each year.
MoF Communication Strategy developed and implemented by June 2013
Fiscal Information and Budget Transparency Publication Cycle developed and implemented by June 2013
MoF website timely updated by June 2017
81
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 5.5:
Coordination
and
Standardizatio
n of PFM
Training
Achieved.
Number of
trained staff in
PFM
Quality of
service delivery
from trained
staff.
None
None
........... of staff trained
Presence of trained staff
providing quality service.
Training mapping exercise completed by December 2012
Capacity building Plan developed and result measurement framework shared with key Stakeholders by June 2013
Two tracer studies conducted to measure impact of training and documented by June 2014 and June 2016
Output 5.6:
PFMRP
component
Managers are
being guided
by detailed
multi-year
operating
plans.
Program
components are
completed in
sequence based
on priority and
the reform is
keeping pace
with the agreed
milestones
PFMRP component
activities are not always
derived from and/or
described within the
context of detailed
component operating plan
Relevance, sequence and
costs are difficult to assess
PFM activities are
governed by multi-year
component operating
plans that provide
context for relevance,
sequence and cost..
All activities presented for inclusion in PFMRP annual work plan are presented within the context of a detailed, multi year operating plans by June 2013
82
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 5.7:
PFM activities
are effectively
planned and
implemented
Component
managers have
capacity to
develop and
manage
strategic
operational
plans.
Component
managers have
developed
capacity in the
use RBM
methodology
Component managers have
not had the necessary level
of capacity development in
strategic planning and
results based management
150 staff from KRAs
trained on change
management and
strategic planning
.
60 staff trained on RBM
methods
Capacity building Plan developed and shared with key Stakeholders by December by 2012
Training on Change Management and Strategic Planning completed by December by 2013
Results Based Management training has been delivered to 60 PFM RP Component managers by June 2013
Output 5.8:
Effective
coordination
of activities
and support
provided to
the program
implementers
Secretariat
support is
facilitating
program
performance.
Under resourced secretariat
with short term contract
Functional secretariat
providing a range of
needs based program
supports
Secretariat procurement process completed by July 2012
Secretariat work plan is completed and approved by JSC by December 2012.
PFMRP coordination secretariat facilitated annually.
Output 5.9:
PFM Program
oversight and
review is being
guided by
clearly defined
Milestones
derived from
Performance
expectations for
each
component are
clearly defined
and understood
by all
Performance expectations
are not clear and the
absence of context makes
qualitative aspects of
program oversight difficult.
Approved M&E
framework sets out clear
and relevant
performance
expectations
Annual review and amendment of the M&E framework to ensure ongoing congruence and relevance annually starting November 2012.
83
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
an agreed
M&E
framework,
stakeholders.
Output 5.10:
All major PFM
reforms have
been
coordinated
with and
informed by
the relevant
government
and DP
stakeholder
groups
Stakeholders
have knowledge
of reforms and
change
initiatives that
will impact on
them or their
units and are
collaborating or
supporting
implementation
.
Stakeholders
have adequate
time to develop
the necessary
adaptive
capacity.
Change
resistance is
minimized
Coordination of major
reforms with stakeholder
groups is not prioritized.
Significant information and
capacity gaps exist.
Major PFM reforms are
all supported by a
communication /
collaboration strategy
which ensures that all
stakeholders have the
opportunity to provide
input and to receive
necessary information in
time to adapt to the
change.
PFM information session completed to disseminated results of: ICT mapping exercise, ICT Harmonization Integration Plan by March 2013
IAG action plan, AcGEN’s Plan to transition to Accrual Accounting
Dec.31st each year Minimum of one PFM reform information day conducted for CSOs , DPs and GoT during Public Service day annually
84
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 5.11:
PFMRP
implemented
efficiently and
effectively
through result
based
management
approach.
Comprehensive
annual work
plan and budget
Progress report
on place on
15th day after
end of quarter
Strong and
effective
dialogue
structure
Number of
coordinated
dialogue
meeting
Approved by August
annually
Progress report in place
Weak dialogue structure
6 meeting
Work plans and budgets
are approve by June
annually
Funds are released by
July 1/annually
Periodic report prepared
quarterly
Presence of strong and
effective dialogue
structure as per MoU.
Working Group and Joint
Steering Committee
meetings are attended
by KRAs decision makers
KRA teams are meeting
monthly schedule.
Donor representatives
are well informed on
reform initiatives.
PFMRP implemented according to annual work plan and milestones are being met
Annual supervision mission are conducted by Sept 30 of each year commencing 2012. Independent program evaluations are completed in 2014
Dialogue structures are working as evidenced by combined DP/GoT Survey results (Survey 1-March 2013/ survey 2 – March 2015for Effective program implementation Improved.
Surveys to ensure that teams (KRA Teams and JSC members)are actually working completed, March 2013, March 2015 and results informed to JSC for action
85
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Output 5.12:
National
systems and
processes for
intergovernme
ntal transfers
to LGAs
Streamlined
and
rationalized
System and
processes are
documented
with target
timelines for
each process
step.
Share of Non-
salary (OC+DEV)
funds released
to RSs and LGAs
by end Q3, as
percentage of
the Resources
budgeted and
available
(OC+DEV) for
the year
No overall view of systems
and processes for
intergovernmental
transfers. Flow of funds and
information on the same is
not in parallel and tied to
one system.
In 2010 it took 7days for
funds to reach MDAs and
RSs (after receipt of
complete set of fund
request).
42.1% of resources
available to RSs and LGAs at
Q3
Effectiveness and
efficiency of the system
has increased
X XX Number of key
actions implemented
(Target to be set after
mapping exercise)
Decreased number of
days of fund transfer
time to RSs LGAs and
MDAs
70% of resources
available to RSs and
LGAs at Q3by 2014
TORs completed by July 2012.
Mapping commences September 2012.
Review and mapping of the systems and processes for intergovernmental transfers initiated with inception report finalised by October 2012
Comprehensive and sequenced action plan on a recommendation of the mapping exercises on the intergovernmental transfers finalized by June 2013.
Reports to be produced annually by end September.
Output 5.15:
Strengthened
Public
Financial
Management
Reforms in
Milestones developed and agreed after discussion with Zanzibar and thereafter decide on the support by
86
Outputs Performance
Indicator
Indicator Baseline
2011
Indicator Target
2017
Milestones
KRA:3 Budget Execution, Accountability and Transparency: Improved utilization of public resources in a
more effective, efficient and transparent manner by June 2016
Zanzibar by
2016
September 2012
Zanzibar PFMRP Strategy developed by June 2014