Bank of Tanzania: Twin Towers in Dar es Salaam.____________________________________
THISDAY REPORTER
Dar es Salaam.
Thursday, 23rd. August 2007.
THE long-awaited investigation of alleged dubious payments from the Bank of Tanzania (BoT) appears to have become further delayed, with the government unable to appoint an international auditor for the exercise last week as per announced schedule.
THE long-awaited investigation of alleged dubious payments from the Bank of Tanzania (BoT) appears to have become further delayed, with the government unable to appoint an international auditor for the exercise last week as per announced schedule.
The investigation in question involves a special audit of the central bank’s external payment arrears account, in the wake of widespread reports of suspicion surrounding the mysterious ’disappearance’ of up to $200m (approx. 260bn/-) in foreign exchange from the account.
When THISDAY tried to contact Ms Meghji yesterday for her comment on the apparent delays in naming the BoT auditor, she was reported to be out of office on a short leave. However, the deputy Controller and Auditor General (CAG), Frank Mhilu, confirmed that the audit contract has yet to be awarded to anyone.
’’We are still finalizing our negotiations with the audit firms that submitted their bids for the contract. This is a technical assignment that requires careful handling,’’ Mhilu told THISDAY in an interview in Dar es Salaam.
He hinted that the final bid evaluations could be concluded during the course of this week, with the successful bidder to be offered the contract for signing purposes next week.
This is the stage that will herald commencement of the arduous task of going through the BoT financial records for 2005/06 with regard to the controversial EPA account, in line with the government’s stated commitment to conclude the special audit by October this year.
Although a number of international audit firms are believed to have initially expressed interest in the contract, only two KPMG and Ernst and Young are understood to have actually applied for the job by the June 28 deadline.
Mhilu confirmed to THISDAY yesterday that the International Monetary Fund (IMF), which has been keenly monitoring the BoT situation since the latest reports of improper payments cropped up, was involved in drafting terms of reference to be used in the planned special audit.
According to these terms of reference, the scope of the exercise will include assessment of all transactions from the EPA account during 2005/06, as well as verification, monitoring, and control procedures related to the account.
The finance ministry earlier tasked the CAG’s office with the job of selecting an international auditor for the audit, and it is understood that the government has already suspended all payments from the targeted EPA account (also known as the external commercial debt account) for the time being.
Meanwhile, the IMF itself recently announced plans for its own, broader ’safeguards assessment’ of financial controls and resources management within the BoT - to complement the government-led special audit exercise as a further effort to verify allegations that millions of US dollars were channelled from the EPA account to various shadow (shell) companies.
According to IMF policy guidelines, a ’safeguards assessment’ is a diagnostic exercise carried out by IMF staff to ’’help prevent the possible misuse of IMF resources and misreporting of information.’’
The central bank, with governor Dr Daudi Ballali at the helm, has lately also been under fire for similarly fishy expenditure with regard to the construction of the bank’s Twin Towers headquarters in the city, whose overall cost is said to have been so inflated that it now exceeds $340m (approx. 425bn/-).
According to reliable reports, this is at least four times more expensive than the cost of similar buildings in some of the world’s most expensive cities such as London, New York and Tokyo.
Dr Ballali and the BoT have also faced serious queries over controversial involvements with local mining projects like Mwananchi Gold Company Limited and the now defunct Meremeta Gold Mine Company Limited, and the Alex Stewart Assayers firm for the auditing of international gold mining operations in the country.
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