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Calculation of Front Loading for Longido District Council

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Calculation of Front Loading for Longido District Council Fostering Accountability Sub-National (Local Government) PEFA Assessment in Tanzania Longido District Council –Final Report July 2016 Table of Contents Contents Acronyms 4 1. Summary Assessment 7 1.1. Overview of Ratings 7 1.2. Context of the Assessment- Data Issues 8 1.3. Integrated Assessment of PFM performance 8 1.4.AssessmentoftheImpactofPFMweaknesses 14 1.5. Prospects for Reform Planning and Implementation 15 2. Introduction 16 2.1. Objectives 16 2.2.ProcessofPreparingtheReport 17 2.3. Scope of the Assignment and Rationale for Sample 19 2.4. Dependency of Longido DC on the Central Government 20 3. Country Background 22 3.1. Country Economic Situation 22 3.2.BudgetaryOutcomes 25 3.3. Legal and Institutional Framework for Public Financial Management 26 4. LGA Background Information 35 4.1.EconomicSituation 35 4.2. Institutional Structure of LGA 36 4.3. Fiscal performance of LGA 38 5. Assessment of the PFM Systems, Processes and Institutions 40 5.1. Predictability of Central Transfers 40 5.2. PFM-out-turns: Budget credibility 43 5.3. Key Cross-Cutting Issues: Comprehensiveness and Transparency 48 5.4.BudgetCycle 60 5.5.DonorPractices 114 6. Government Reform Process 115 6.1. Recent and On-going Reforms 115 6.2. Institutional Factors Supporting Reform Planning and Implementation 117 Annexure.1 DataIssues 120 Annexure.2 Mapping of Key Weaknesses 121 Annexure.3 Disclosure of the Quality Assurance Mechanism 123 Annexure.4 Scoring Methodology under the PEFA Assessment Framework 126 Table of Contents Annexure.5 Organizational Structure of Ministry of Finance and PMO-RALG, Government of Tanzania 135 Annexure.6 Revenue and Expenditure Calculations 137 Annexure.7 Screenshots for HLG-1 Dimension (iii) and PI-1 and PI-2 138 Annexure.8 Performance Indicators Summary 144 Annexure.9 List of People Met 151 Annexure.10 List of Documents Referred To 153 Acronyms Acronyms Acronym Definition Acronym Definition Local Government Financial ACGEN Accountant General LGFM Memorandum African Organisation of Supreme AFROSAI LGLB Local Government Loans Board Audit Institutions Local Government Reform AFS Annual Financial Statements LGRP Programme Acquired Immune Deficiency Local Government (Urban AIDS LGUA Syndrome Authorities) Act Association Local Authorities of ALAT LLG Lower Level of Government Tanzania Agriculture Sector Development ASDP LPO Local Purchase Order Programme Ministries, Departments and CAG Controller and Auditor General MDA Agencies CBO Community Based Organization MoF Ministry of Finance Constituency Development CDCF MSD Medical Store Department Catalyst Fund Medium Term Expenditure CDG Capital Development Grant MTEF Framework CFR Council Financial Reports NA Not Applicable CHF Community Health Fund NAOT National Audit Office of Tanzania CIA Chief Internal Auditor NHIF National Health Insurance Fund CMT Council Management Team NMB National Microfinance Bank Classification of Functions of the COFOG NR Not Rated Government District Agriculture Sector National Rural Water Supply and DASIP NRWSSP Investment Programme Sanitation Programme National Water Sector DC District Council NWSDP Development Programme DED District Executive Director OSR Own Source Revenue Department for International DFID PAA PublicAuditAct Development Prevention and Combating of DPLO District Planning Officer PCCB Corruption Bureau Elizabeth Glaser Pediatric AIDS Primary Education Development EGPAF PEDP Foundation Programme Public Expenditure and Financial GDP Gross Domestic Product PEFA Accountability Public Expenditure and Tracking GFS Government Finance Statistics PETS Survey Sub-national (Local Government) PEFA Assessment in Tanzania – Longido District Council PwC 4 Acronyms Acronym Definition Acronym Definition Deutsche Gesellschaft für GIZ PFA Public Finance Act Internationale Zusammenarbeit GOT Government of Tanzania PFM Public Financial Management Public Financial Management GPG General Purpose Grant PFMRP Reform Programme Human Capital Management HCMIS PMG Paymaster General Information System HIV Human Immunodeficiency Virus PMO Prime Minister Office Prime Minister Office- Regional HLG Higher Level of Government PMORALG Administration and Local Government President Office-Public Sector HRO Human Resource Officer POPSM Management HSBF Health Sector Basket Fund PPA Public Procurement Act Public Procurement Appeals IAF Internal Auditor's Office PPAA Authority IAG Internal Auditor General PPP Public Private Partnership International Accounting IASB PPR Public Procurement Regulations Standards Board Public Procurement Regulatory IAU Internal Audit Unit PPRA Authority Information and Communication ICT PSM Public Sector Management Technology International Federation of IFA PwC PricewaterhouseCoopers Limited Accountants Integrated Financial Management IFMS RAM Regularity Audit Manual System Regional Administrative IIA Institute of Internal Auditors RAS Secretariat Revenue Computerised IMF International Monetary Fund RCMIS Management Information System International Association of Rural Water Supply and INTOSAI RWSSP Supreme Audit Institutions Sanitation Project International Public Sector IPSAS SAI Supreme Audit Institution Accounting Standards International Standards on ISA SDU Service Delivery Unit Auditing International Standards of Secondary Education ISSAI SEDP Supreme Audit Institutions Development Programme Strengths, Weaknesses KRA Key Result Areas SWOT Opportunities And Threats Local Authorities Accounts LAAC TACAIDS Tanzania Commission for AIDS Committee Local Authorities Accounting LAAM TASAF Tanzania Social Action Fund Manual LGA Local Government Authority TB Tender Board Sub-national (Local Government) PEFA Assessment in Tanzania – Longido District Council PwC 5 Acronyms Acronym Definition Acronym Definition Local Government Accounting Confederation of Tanzania LGAM TCI Manual Industries Local Government Capital LGCDG TIN Tax Identification Number Development Grant TRA Tanzania Revenue Authority Local Government District LGDA Authorities Act TZS Tanzania Shilling USD UnitedStatesDollar LGFA Local Government Finance Act VAT ValueAddedTax Fiscal Year 1 July to 30 June 1 USD= 2019 Tanzanian Shilling (4th of June, 2015) Exchange rate Symbol “TZS” indicates Tanzania Shillings and “USD” indicates United States Dollar Financial Period 2011-12 to 2013-14 Assessed Sub-national (Local Government) PEFA Assessment in Tanzania – Longido District Council PwC 6 Summary Assessment 1. Summary Assessment 1.1. Overview of Ratings Table 1: Overall ratings Summary Ratings Performance Description PEFA 2015 rating Indicators HLG-1 Predictability of transfers from a Higher Level of Government D+ A. PFM Out-Turns: Budget Credibility PI-1 Aggregate expenditure out-turn compared to original approved budget A Composition of expenditure out-turn compared to original approved PI-2 D+ budget PI-3 Aggregate revenue out-turn compared to original approved budget D PI-4 Stock and monitoring of expenditure arrears D+ B. Key Cross-Cutting Issues: Comprehensiveness and Transparency PI-5 Classification of the budget C PI-6 Comprehensiveness of information included in budget documents C PI-7 Extent of unreported government operations A PI-8 Transparency of inter-governmental fiscal relations D PI-9 Oversight of aggregate fiscal risk from other public sector entities C PI-10 Public access to key fiscal information D C. Budget Cycle (i) Policy-Based Budgeting PI-11 Orderliness and participation in the budget process C+ Multi-year perspective in fiscal planning, expenditure policy, and PI-12 D+ budgeting (ii) Predictability and Control in Budget Execution PI-13 Transparency of taxpayer obligations and liabilities D+ PI-14 Effectiveness of measures for taxpayer registration and tax assessment D PI-15 Effectiveness of collection of tax payments NR Predictability in the availability of funds for commitment of PI-16 D+ expenditures PI-17 Recording and management of cash balances, debt and guarantees C PI-18 Effectiveness of payroll controls D+ PI-19 Competition, value for money and controls in procurement D+ PI-20 Effectiveness of internal controls for non-salary expenditure D+ Sub-national (Local Government) PEFA Assessment in Tanzania – Longido District Council PwC 7 Summary Assessment Summary Ratings PI-21 Effectiveness of internal audit C+ (iii) Accounting, Recording and Reporting PI-22 Timeliness and regularity of accounts reconciliation B+ Availability of information on resources received by service delivery PI-23 B units PI-24 Quality and timeliness of in-year budget reports C+ PI-25 Quality and timeliness of annual financial statements C+ (iv) External Scrutiny and Audit PI-26 Scope, nature, and follow-up of external audit C+ PI-27 Legislative scrutiny of the annual budget law D+ PI-28 Legislative scrutiny of external audit reports C+ D. Donor Practices D-1 Predictability of Direct Budget Support NA Financial information provided by donors for budgeting and reporting D-2 NA on project and program aid D-3 Proportion of aid that is managed by use of national procedures NA *NR signifies indicator has been assessed but not rated due to no/insufficient documentation or information provided to the PEFA team, “NA: Not Applicable” implies that the PFM transaction/system/process required for the assessor to assess the indicator/dimension does not exist in the LGA. 1.2. Context of the Assessment- Data Issues The variation in data between various source documents referred to in some detail in this assessment is an area of concern. While the basis of compilation of each document is standardized
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