AUDIT ON BOT's SUSPECTED PAYMENTS SOON

SPECIAL audit of Bank of Tanzania (BoT) External Debt Account (EDA) for the year ended June 30, 2006 by an international consultancy firm is expected to start after one week.

The special audit aims at shading light on dubious payments amounting to 40bn/- (30.8 m US dollars).

BoT is alleged to have paid about 40bn/- to a suspiciously registered firm under the name of Kagoda Agriculture Limited claiming to have been assigned to collect funds of 12 foreign creditors during the second half of 2005 using fake documents.

The Controller and Auditor General (CAG), Mr Ludovick Utouh, told the 'Daily News' in Dar es Salaam yesterday that a special audit of the BoT-EDA covering July 2005 and June last year is expected to start any time after signing a contract next week.

He said his office was engaged in negotiations until last week with a selected consultancy firm over the terms of reference on the scope of audit which should be completed before the end of the year.

Mr Utouh said that the terms of reference were endorsed by both the International Monetary Fund (IMF) and the CAG.

The CAG who declined to name the consultancy firm and details of the matter said: "I have been appointed by the government to deal with this issue. I will make sure the audit is conducted professionally. I will hand over a raw report to the government."

Authoritative sources have hinted that the international consultancy firm is either KPMG or Ernst & Young, noting they are the only two firms being evaluated.

Sources said that the terms of reference drawn by the CAG include conducting a special audit on the National Bank of Commerce External Payment Arrears (NBC-EPA).

The Audit would review the effectiveness of the monitoring process by the BoT and the treasury over the alleged account; it should evaluate compliance with the memorandum of understanding (MoU) between the Ministry of Finance and the BoT pertaining to the management of the alleged account and internal control procedures.

The consultant would report to the CAG in the execution of the assignment and later make available the findings including the full audit report to the government and the staff of the IMF.

According to a report by BoT's external auditors last September, the questionable payments for the debts owed to 12 European, Japanese and US creditors were made to Kagoda Agriculture Limited which presented deeds of assignment signed between September 10 and November 3, 2005.

The period spent to negotiate and given the assignment of deeds with 12 different foreign creditors from across the globe was too short, raising eyebrows and that all key documents were signed and witnessed in Dar es Salaam.

None of the people alleged to have signed the deeds on behalf of the German, Italian, British, Japanese, Yugoslav, French and US companies could be identified by creditors when contacted by the auditors.

SOURCE: DAILY NEWS