CAG probes fixed deposit rip-off in commercial banks

THE Treasury Registrar (TR), Mr Lawrence Mafuru, said the Controller and Auditor General (CAG), is conducting a special investigation on allegations that public servants pocket the interest income that arise from the fixed deposit accounts in commercial banks.

Mr Mafuru told reporters in Dar es Salaam yesterday when giving clarification on emerging issues on fixed deposit accounts, saying all public institutions, agencies and parastatals have been given until next month to ensure the money in commercial banks accounts are moved to revenue collection accounts at the Bank of Tanzania (BoT).

The TR said during a meeting with Parliamentary Public Accounts Committee last month, they decided to task CAG to investigate the allegations of all transactions on fixed deposit accounts starting with the Tanzania Ports Authority (TPA).

“Having fixed deposit accounts in private commercial banks is not a sin; the problem that irks President John Magufuli was due to the fact that public institutions applied for funds while even the procurement process has not started, which could be channelled to other development projects,” he noted.

Mr Mafuru noted further that as a result, projects were struck as the government has inadequate funds to meet the obligations, which could have been the opposite case, should the public institutions whose projects are yet to mature had not applied for the fund prematurely.

Speaking on Tanzania Education Authority (TEA), which was labeled among the institutions with fixed deposit, Mr Mafuru said they find it proper to have it mature so that they get the profit.

“Not only TEA; many other institutions had fixed deposits in commercial banks. But when the directive was issued, the accounts were operating. So we decided to wait so that they mature and get the profit.

That is why we have served them all with ultimatum until December for the money plus interest to be sent to BoT,” said the TR. Mr Mafuru said the decision by the government to direct the public institutions to open revenue collection accounts at BoT was meant to monitor their revenue and expenditure against their approved budgets.

“Prior to that, it was difficult to monitor the accounts,as it was hard to access the information from private commercial banks due to limitations. But right now it is easy as the BoT could issue you with monthly statements and see if there is fund mismanagement,” he clarified.

Mr Mafuru added that nothing had changed as public institutions and parastatals apply for their monthly expenditure from the BoT and deposit the same in commercial banks for running their operations in accordance with their budgets.

Source: Daily News