THE RESEARCH PROPOSAL ON THE ASSESSMENT OF THE CHALLENGES

FACING PUBLIC SECTOR ENTITIES IN IMPLEMENTING THE CONTROLLER AND

AUDITOR GENERAL`S (CAG`S) REPORTS RECOMMENDATIONS IN TANZANIA, A
CASE STUDY NATIONAL AUDIT OFFICE OF TANZANIA (NAOT) DODOMA.

BY:
FRANK K ALEXANDER
2022/2023

A RESEARCH PROPOSAL TO BE SUBM.ITTED IN PARTIAL

FULFILLMENT OF THE REQUIREMENTS FOR THE COMPLETION COURSE OF
BUSINESS RESEARCH METHODS.
DEPARTMENT OF ACCOUNTING AND FINANCE

SCHOOL OF BUSINESS (SOB)

MZUMBE UNVERSITY

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 ABBREVIATION AND ACRONYM
AFROSAI African Organization for Supreme Audit Institutions
CAG: Controller and Auditor General
SAI: Supreme Audit Institutions
NAO: National Audit Office
NAOT: National Audit office of Tanzania
PAC: Public Accounts Committee
LAAC: Local Authority Accounts Committee
LGA’s Local Government Authorities
MDA: Ministry, Department and Agency
ISSAI: International Standard of Supreme Audit Institutions
INTOSAI: International Organization of Supreme Audit Institutions
PFA: Public Finance Act
PPA: Public Procurement Act
URT: United Republic of Tanzania

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Table of Contents

SEABBREVIATION AND ACRONYM ....................................................................................... ii

CHAPTER ONE ............................................................................................................................. 1
INTRODUCTION .......................................................................................................................... 1
1.1 Introduction ........................................................................................................................... 1
1.2 Background of the study ....................................................................................................... 1
1.3 Statement of the Problem ...................................................................................................... 2
1.4 Research Objectives .............................................................................................................. 3
1.4.1 General Objective ............................................................................................................... 3
1.4.2 Specific Objectives ............................................................................................................. 3
1.5 Research Questions ............................................................................................................... 3
1.6 Scope of the Study................................................................................................................. 3
1.7 Significance of the Study ...................................................................................................... 4
1.8 Limitation and Delimitation of the study .............................................................................. 4
1.9 Organization of the Report .................................................................................................... 5
CHAPTER TWO ............................................................................................................................ 6
LITERATURE REVIEW ............................................................................................................... 6
2.0 Introduction ........................................................................................................................... 6
2.1 Defining Key Concepts ......................................................................................................... 6
2.1.1 Public sector ....................................................................................................................... 6
2.1.2 Public Sector Auditing ....................................................................................................... 7
2.1.3 Performance Auditing ........................................................................................................ 8
2.1.4 Audit Recommendations .................................................................................................... 8
2.1.5 Levels of implementations of the recommendations.......................................................... 9
2.1.6 Implementation Status of the Issued Recommendations.................................................... 9
2.2 Rationale of implementing CAG’s report recommendations. ............................................. 11
2.3 Theoretical Framework ....................................................................................................... 11
2.4 Empirical Review ................................................................................................................ 12
2.4.1 Policy and Legal Framework to enforce CAG Reports in Public Institutions ................. 12
2.4.2 Extent of Implementation of CAG Recommendations in Promoting .............................. 15
Accountability in Public Institutions ......................................................................................... 15

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 2.7 Research Gap....................................................................................................................... 19
CHAPTER THREE ...................................................................................................................... 20
RESEARCH METHODOLOGY.................................................................................................. 20
3.0 Introduction ......................................................................................................................... 20
3.1 Research Design .................................................................................................................. 20
3.2 Study Population ................................................................................................................. 20
3.3 The Sample Size and Sampling Procedures ........................................................................ 20
3.3.1 Sample size....................................................................................................................... 20
3.3.2 Sampling Procedures ........................................................................................................ 21
3.4 Data Collection Methods..................................................................................................... 21
3.4.1 Interviews ......................................................................................................................... 21
3.4.2 Questionnaire method. ..................................................................................................... 22
3.4.3 Documentary Review ....................................................................................................... 22
3.5 Data Processing and Analysis ............................................................................................. 22
3.6 Reliability and Validity of Data .......................................................................................... 23
3.6.1 Validity ............................................................................................................................. 23
3.6.2 Reliability ......................................................................................................................... 23
3.7 Ethical Consideration .......................................................................................................... 23
REFERENCES ............................................................................................................................. 24
Appendix 1 INTERVIEW AND QUESTIONNAIRE GUIDE FOR KEY INFORMATIONS TO
NATIONAL AUDIT OFFICE-HEADQUARTERS. ................................................................... 28

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 CHAPTER ONE

INTRODUCTION

1.1 Introduction
This chapter presents the background information of research that is going to be a research study
and elaborate its trends but also this chapter entailing the whole purpose of the study by providing
introductions about the problem and its efforts to address. Furthermore, the chapter pinpoints the
problem of the statement, research objectives, research question, significances of the study, and
the limitation of the study and scopes of the study. The chapter ends up by showing the general
organization of the report.

1.2 Background of the study

Over the years, auditing has played a crucial role in public finance, whereas Supreme Audit
Institutions (SAI) has been mandated by constitutions of many countries around the world to act
as the overseer over management of public resources. Thus, public auditors provide a link in
reinforcing accountability of government executives to the parliament and through them to the
public. The process of reviewing financial transactions of the audited entities enables auditors to
ascertain if the transactions made are true and fair and if there is compliance in management of
financial resources as per financial regulations. (RamkumarV&KrafchikW, 2005) The oversight
function of supreme audit institutions under Westminster system of accountability depends upon
a close relationship and mutual dependency between SAI and Parliamentary oversight committee
partnership. Parliamentary accounts committee depends on audits reports prepared by SAIs so that
they can enforce implementation of given recommendations whilst, SAIs reports can have
significant impacts if Parliamentary account Committee manage to enforce all recommendations
issued to the audited entities (AFROSAI -E, 2012). International Standards for Supreme Audit
Institutions (ISSAI) highlights that, Supreme audit institutions are mandated to devise follow up
mechanism and report on the status of recommendation issue to audited entities to ensure that the
audited entities work upon on the given recommendations and those provided by legislature.
Follow up procedures enable the SAI to assess the level of implementation and examine corrective
actions taken or to assess reasons for why corrective actions are not taken. Tanzania Public Audit
Act no 11 of (2020) highlights the role of CAG as responsible for conducting all audits and

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thereafter provides report to the national assembly timely and accurately. The CAG reports
findings and recommendations should be followed up before the next budget session In Tanzania
Controller and Auditor General is mandated to make follow up of recommendations issued to
audited entities in order to ascertain the extent to which issued recommendations have been
implemented and respective audited entities are required to implement fully the CAG audit
recommendations issues to them (Public Audit Regulations, 2009). Effective implementation of
CAG and PAC recommendations are paramount important in demonstrating audited entities’
commitments and government in general in reinforcing accountability, openness, good governance
and stewardship which in turns perpetuate sound management of resources across all levels of the
government. Failure to implement recommendations issued by CAG and PAC instructions results
to repetition of mismanagement of government resources. This could consequently hamper
integrity, adequacy of process, system and procedures to be relied upon (NAOT, 2018). National
Audit Office of Tanzania (NAOT) as one of the accountability organ in the country is vested with
responsibility of overseeing proper use of public resources. Therefore, CAG issued
recommendations need to be worked upon fully so as to reinforce and promote accountability and
protecting the core values of the public sector institutions. This is imperative in ensuring actions
officers and officials perform the public business transparently, fairy, honestly and with ultimately
equity and integrity. On that regard, the researcher intended to examine the reasons why Controller
and Auditor General’s audit reports are inadequately implemented by government institutions.

1.3 Statement of the Problem

This study will concentrating to identify obstacles in implementation of CAG`S report
recommendations in public entities. The terms to ensuring the recommendations issued in
respective audited entities few are worked upon for corrective actions, and not all
recommendations issued by CAG in public organizations are fully implemented. For instance, over
the past 15 years from 2001/2002 to 2015/2016, Tanzania Revenue Authority has been issued with
a total of 207 recommendations in previous audit reports, all of which are still outstanding (CAG
Annual General Report 2018).Furthermore, the CAG analysis on implementation status of
development projects highlights that, a total of 6,769 recommendations issued on development
projects during financial year 2015/2016 which are still outstanding. Only 1,489 recommendations
(22%) were full implemented; 1527equivalent to 23 percent were on the process and 2,688 (40%)
were not implemented and; 16 percent were overtaken by events. (The citizen 2017). Apart from

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that, CAG has been frequently reporting on financial irregularities in his audit reports for years.
However, there is limited improvement in that area. For example, during the period between 2012
and 2013, CAG issued a total of 960 recommendations of the past years, but only 401 (42%) were
implemented fully by Ministry Departments and Agencies (TWAWEZA, 2015). CAG follow up
report for the five-performance audit reports tabled to the parliament in 2015 shows that, out of 86
recommendations issued to the audited entities only 22 recommendations were implemented.
Under such context, it is important to ascertain reasons as to why CAG and PAC recommendations
are inadequately implemented by public institutions regardless the mandate in safeguarding proper
use of public resources and promoting accountability in public institutions.

1.4 Research Objectives

1.4.1 General Objective
To examine why Controller and Auditor General’s audit report recommendations are inadequately
implemented by government institutions.

1.4.2 Specific Objectives

i. To examine existing policy and legal framework in enforcement of CAG reports in public
institutions.

ii. To ascertain the extent of implementation of CAG recommendations in public institutions.

iii. To establish reasons why Ministries, departments and agencies do not sufficiently implement
CAG recommendations.

1.5 Research Questions

The main research questions of this study aims to answer include;

i. What are the policies, laws, regulations and guidelines in place to enhance enforcement of the
implementations of the CAG’s reports recommendations in Public sector entities?

ii. To what extent has the implementation of CAG recommendations in public sector entities?

iii. What are the reasons for insufficient implementation of CAG’s recommendations by Public
entities?

1.6 Scope of the Study

The study will be conducted at the National Audit Office of Tanzania. The NAOT will be the study
area because of it’s responsibility on coordinating and supervising auditing activities of all public

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sector entities in the country. This will enable the researcher to assess extent of implementation of
CAG recommendations, as almost each financial year different audits (Financial, performance,
Forensic etc.) are conducted by CAG under NAOT umbrella. In this study the researcher narrowed
down the scope and assessed the level of implementation of performance audit recommendation
issued by CAG. The study therefore examined the underlying reasons for the inadequate
implementation of CAG performance audit reports by public sector entities.

1.7 Significance of the Study

This study will be aiming at unfolding various outcomes regarding public accountability in
connection with the audit work and recommendations issued by CAG. It therefore provides input
for policy makers, and implementers to accommodate the challenges as it would strengthen the
overall public accountability. The study is useful to the discipline of leadership and management
fields, as it provides insights on the role and power of and CAG office in promoting public
accountability. The research findings provide an insight on significance of CAG recommendations
on the promotion of change and accountability in public entities. The research is also significant
since very few researches have been conducted on the area of assessing reasons for inadequate
implementation of Performance audit recommendations in Tanzania. Therefore, the study adds
value on the existing literatures by contributing on reasons for inadequate implementation of
CAG’s recommendations to enhance accountability thereby adding new insights to the body of
knowledge. In addition the research will details and makes awareness about various challenges
facing public sector officials in implementation of CAG’s reports recommendations that will
enable such circumstances on how to deals with so as to eliminate.

1.8 Limitation and Delimitation of the study

Limitation of the study are factors that are out of researcher control but can affect the study. Normal
they are beyond the researcher capacity and control and affects the study. (Baron, 2012). In
executing this study, the researcher- expected to experience difficulties and willingness from
officials from NAOT to provide data and necessary information due sensitivity of the information
to be requested based on the nature of the study. The researcher also expected to experience time
constraints since this is an academic research and needs to be completed according to the academic
Almanac of Mzumbe University, will be a challenge to the researcher for making the whole
research report compiled, reviewed and analyzed intensively. The researcher also expected to
experience financial constraints as most of the activities needs funds to carter for travelling,

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information gathering etc. Delimitation of study. These are factors that may hinder the study but
to some extent the researcher has control of them. (Baron, 2012).The followings will be the
techniques used by the researcher to overcome the challenges mentioned above. Time
management. The researcher will managed time by setting appointment with selected respondents
to ensure their availability for interview prior visit. Also most of the secondary information found
online hence it would be easy for the researcher to retrieve the information, which will be useful
for the study. Costs management: Since the selected respondents from National Audit office will
be frequently out of the office for official duties, the researcher expecting managing to minimize
the cost of travel by conducting telephone interviews and in other cases, interviews will be carried
out using zoom technology for those respondents who would be out of the office. This enable the
researcher to collect information smoothly from the targeted sample.

1.9 Organization of the Report

This research report will be organized into three chapters: Chapter introduces the problem under
the study, statement of the problem, objective of the study, research questions, Scope of the study,
significance of the study, and limitation of the study. Chapter Two covers literature review, which
entails empirical and theoretical literature plus the conceptual framework. Chapter Three covers
the research methodology employed in the study. It highlights and explains how and what
procedures were employed to execute the study. Chapter Four presents research findings, and
discussion; while chapter five presents summary, conclusion and Policy implication of the study
about examination of contributing reasons for inadequate implementation of performance Auditing
recommendations, (challenges facing public sector entities in implementing CAG’s report
recommendations).

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 CHAPTER TWO

LITERATURE REVIEW
2.0 Introduction
The research study focusing on assessment of the challenges facing public sector entities in
implementing audit recommendations issued by the Controller and Auditor General in Tanzania.
This chapter presents theoretical and empirical literature on Public Sector systems on audit related
issues. It also provides definition of concepts, theories on Public sector implementations of CAG’s
report, and accountability framework in Tanzania settings.

2.1 Defining Key Concepts

2.1.1 Public sector
In general, terms, the public sector consists of governments and all publicly controlled or publicly
funded agencies, enterprises, and other entities that deliver public programs, goods, or services.
(The Institute of internal Auditors, 2011). Public sector organizations may exist at any of four
levels:

 International (multistate entities or partnerships).

 National (an independent state).
 Regional (a province/state within a national state).
 Local (a municipal-level body such as a city or county)

At any of these levels, the public sector generally consists of at least three types of organizations.

 Core government consists of a governing body with a defined territorial authority. Core
governments include all departments, ministries, or branches of the government that are
integral parts of the structure, and are accountable to and report directly to the central
authority — the legislature, council, cabinet, or executive head.
 Agencies consist of public organizations that are clearly a part of the government and
deliver public programs, goods, or services, but that exist as separate organizations in their
own right — possibly as legal entities — and operate with a partial degree of operational
independence. They often, but not necessarily, are headed by a board of directors,
commission, or other appointed body.
 Public enterprises are agencies that deliver public programs, goods, or services, but
operate independently of government and often have their own sources of revenue in

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 addition to direct public funding. They also may compete in private markets and may make
profits. However, in most cases, the government is the major shareholder, and these
enterprises partly follow the acts and regulations that govern the core government. Outside
this clear public sector area is a gray zone, or boundary zone, with two types of
organizations that might or might not be part of the public sector.
 State businesses are government owned and controlled businesses that sell goods or
services for profit in the private market. Although they do not deliver what would be
considered public programs, goods, or services, they might be considered part of the public
sector. Public contractors are legally independent entities outside government that receive
public funding — under contract or agreement — to deliver public programs, goods, or
services as their primary business. Due primarily to their limited public control, these
organizations usually would be classified as not for-profit or private sector entities.

2.1.2 Public Sector Auditing

(Goodson et al., 2012) highlights that, Public sector auditing is an objective evaluation of public
service proceedings executed by competent personnel in the subject with an intention of
ascertaining whether activities and transactions of an organization complies with stipulated laws
and regulations. In general, public sector auditing can be described as a systematic process of
objectively obtaining and evaluating evidence to determine whether information or actual
conditions conforms to the established criteria. Public-sector auditing is essential in a way that, it
provides Legislative and oversight bodies, those charged with governance and the general public
with sufficient information, independent and objective assessments concerning the stewardship
and performance of Government policies, programs or operations (ISSAI 100). Legislation
governing the conduct of public sector audit differ from one country to another. The constitution
of the United Republic of Tanzania (URT), article 143, requires among things, the controller and
Auditor General (CAG) to audit and report on public accounts of all officers and authorities of
URT, and the accounts of the government of the URT and the accounts of the National Assembly.
The Public Finance Act (PFA) of 2001, which replaced the Exchequer Ordinance Act of 1961.
Requires the audit of government accounts to be done by suitably qualified persons, with proven
experience and ability to discharge the role without fear, favor or prejudice and that person or
authority is to interfere with or exert undue influence on him in the exercise of the powers or in

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the performance of his professional functions. The Public Procurement Act (PPA) no 21 of 2004
govern the conduct of public sector audit in Tanzania. Section 44(2) of this Act requires the CAG
to provide an opinion on the extent to which ministries, departments and agencies comply with
PPA 2004. Local Government Finance Act No. 9 of 1982, section 45 and 48 sets out audit matters
in local government accounts, which the CAG must consider. At international level, National
Audit Offices have formed an international organization called International Organization of
Supreme Audit Institutions (INTOSAI), thus the CAG conducts the audit in the line with INTOSAI
requirements because he is a member of this association.

2.1.3 Performance Auditing

According to International Standard of supreme Audit institutions (2014) states that, Performance
audit intents to ascertain on whether interventions, programs and institutions are performing in
accordance with principle of economy, efficiency and effectiveness and assess whether there is a
room for improvement. Performance audits examine the performance of an entity against a
predetermined criteria, causes of deviation from the criteria and problem are analyzed with the aim
of answering audit questions and to provide recommendations for further improvement. Public
Audit regulation (2009) indicate the rationale of performance audit as it focuses on providing
independent information, advice and assurance on economy efficiency and effectiveness in
management of government resources of the audited entities. Also, it aims at identifying
appropriate ways of improving financial control and value for money to encourage audited bodies
to take actions where improvements are necessary and cost effective.

2.1.4 Audit Recommendations

Audit recommendations are suggested actions to be taken by audited entities in line with audit
objectives with the intention of rectifying and addressing observed anomalies in the report for the
purpose of improving operations and programs in government institutions. Once audit findings are
due, they are usually goes hand in hand with recommendations to enable the audited entities to
rectify deficiencies and anomalies observed in findings presented in an audit report. During
auditing process auditors are required to review the ways in which audited entities programs are
carried out and how activities are undertaken. This provides the basis of issuing recommendations
to the management for the sake of improving ongoing program operations (Wadesango et al.,
2017). NAOT (2019) reveals that, follow up of issued recommendations is an imperative process
which provide an assurance on implementation status of the given recommendation by audited

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entities .Citizen get assured on how resources are managed and receive feedback on the full value
for money on various programs undertaken by Ministries, departments and Agencies.

2.1.5 Levels of implementations of the recommendations

NAOT (2020) describes levels of implementation of the recommendations into four main
categories namely: Fully implemented recommendations. This is when the audited entities provide
sufficient and appropriate evidence to support the gaps noted during audits. The evidence indicates
that audited has taken corrective measures to rectify the weaknesses. Partially implemented
recommendations. When the audited entity provide evidence which is appropriate but the evidence
provided address some element of the given recommendations. Partially implemented
recommendations is subdivided into two categories which are partially satisfactory and partially
not satisfactory. Partially satisfactory is when the auditee provides most of the required evidences
within appropriate period of time frame agreed. Whereas partially not satisfactory is when the
audited entity provide evidences showing only preliminary measures taken or when few evidence
has been submitted. Not implemented recommendations. When the auditee fails to provide
evidence to support measures taken against the recommendation or when the submitted evidence
do not support meaningful movement to address observed gaps. Recommendations overtaken by
events. Audit Recommendations is considered to be overtaken by events when there
commendation issued has been overtaken by other circumstances which has caused a
recommendation to be irrelevant or to have less impacts. Implementation Status of the Issued
Recommendations As regards to follow-up, a total of 86 recommendations were provided in all
five performance audit reports. As at the date of this follow-up, 29 recommendations had been
fully implemented, 47 recommendations partially implemented while 21 recommendations had
not been implemented. The status of implementation of these recommendations details the specific
audit recommendations made as well as the additional works which have been undertaken by the
respective audited entities that goes beyond our previously issued audit recommendations. Table
1 below shows the state of implementation of the audit recommendations of the said audit reports
categorized as fully implemented, partially implemented and not implemented at all.

2.1.6 Implementation Status of the Issued Recommendations

As regards to follow-up, a total of 86 recommendations were provided in all five performance
audit reports. As at the date of this follow-up, 29 recommendations had been fully implemented,
47 recommendations partially implemented while 21 recommendations had not been implemented.

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The status of implementation of these recommendations details the specific audit
recommendations made as well as the additional works which have been undertaken by the
respective audited entities that goes beyond our previously issued audit recommendations.

Table 1 below shows the state of implementation of the audit recommendations of the said audit
reports categorized as fully implemented, partially implemented and not implemented at all

Table 1: Implementation status of Performance Audit Recommendations

Audited No. of Reconditions Fully Partially Not
Entity given implemented implemented Implemented
Ministry of 15 1 6 8
Lands
PO-RALG 25 2 15 8
Ministry of 5 4 1 0
Health
MSD 7 5 2 0
VPO 4 0 4 0
NEMC 12 7 5 0
Ministry of 2 0 0 2
Works
TBA 7 1 2 4
Ministry of 2 0 2 0
Agriculture
LGAs 6 2 4 0
Total 85 22 41 22
Percentage 100 26 48 26
(%age)

Source: Auditors’ Analysis (2018)

The revelation of Table 1 above is that the overall status on the implementation of the issued
recommendations indicates that 26 percent of all recommendations issued were satisfactorily
addressed; 48 percent were partially implemented; and 26 percent of all recommendations were
not implemented. Thus, 74 percent of the issued recommendations were either fully or partly
implemented by the audited entities.

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2.2 Rationale of implementing CAG’s report recommendations.
In democratic government, the Government is entrusted with public resources by the Parliament
on behalf of the people. The Government therefore has the obligation to account for them and
provide clear explanation on how these funds are being used. The power to hold the Government
accountable is given to the parliament on behalf of the citizen. The Controller and Auditor General
Conduct’s investigation to determine how much public resources have been optimally utilized by
the Government in the execution of their duties and then report back to the parliament. Also
provides recommendations to some issues where there is no well utilization of public resources so
as can be implemented to avoid such portrayed miss management of public resources. A
democratic state is manifested through an assurance that citizens perceive their Government to be
transparent and accountable to them .Citizens entrust the Government only if are well informed on
how decisions that directly affects them are undertaken. Moreover Citizen have right to know and
be informed on how much taxes has been collected and utilized so as to assess whether the
collected taxes has been utilized to fulfill intended objectives. Presence of this environment brings
trust and Government receives its legitimacy in the citizens eyes (Chaligha, 2014).

2.3 Theoretical Framework

In this study, The Principal-Agent Theory will be employed to explain relations between Public
sector entities parties that are responsible in the use and control of public resources though
implementing of Controller and Auditor General (CAG) report recommendations and thus,
arriving challenges arise during implementation. The theory is relevant in the study as it shows the
relationship between the CAG and Audited institutions with challenges arise during
implementation. According to Herbert Simon (1982) The Principal Agent Theory may be defined
as a model in which the leader who proposes the contract) is called the Principal and the follower
(the party who just has to accept or reject the contract) is called the Agent. This model therefore
can apply to any situation where there is a principal issues directives to the agent. The agent will
then determine behaviors that are consistent with the desires of the principal. In the execution of
this study, the model is relevant due to major two elements as related to challenges facing during
implementation. These elements are information asymmetry and goal divergence.

Asymmetrical Relation between Principal and Agent

Herbert Simon’s (1982) explanation on principal-agent relations explain through the concept of
bounded rationality which applies asymmetrical relations between principal and agent as far as

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information flow is concerned where principals may provide public resources in light of their
uncertainty and bounded rationality to track agents’ performance, behaviors and other activities.
On the other scholars such as Williamson infers from Herbert Simon’s bounded rationality that
decision makers such as public sector officials as principals may be forced to satisfied given their
cognitive limitations of information, lack of complete monitoring mechanisms and other resources
as per agents’ activities and may have to weigh the marginal costs against the marginal benefits
derived from their monitoring strategies. In connection with this, in the public setting where CAG
audit and issues recommendation to the Government, in application of principal agent model
therefore CAG is a principal due to his role in giving recommendation on behalf of the parliament
who basically have the mandate and legitimacy to overseeing the use of public funds on behalf of
the public. In this setting therefore the Ministries, Department and Agencies (MDA) are the agents
since they are responsible to act and make decision on the use of public funds and resources for
varied nature of responsibilities.

2.4 Empirical Review

2.4.1 Policy and Legal Framework to enforce CAG Reports in Public Institutions
Zinyama (2013) on his study on Efficiency and Effectiveness in Public Sector Auditing in
Zimbabwe noted that, despite the role of Controller and Auditor General in promoting
accountability through scrutiny of financial information and identification of fraud and
embezzlement. However, he cannot take any action simply because the governing legislations do
not give CAG office tooth. The study further revealed that, CAG office suffers legal mandates as
well as organizational problem hence serious remedies should be taken to secure transparence and
accountability in the utilization of public funds. The study further pointed that apart from CAG
effectiveness in discharging out his oversight mandate governed by the constitution but he has no
tooth to bite. The CAG office only points out irregularities, and misappropriation of government
funds and properties, however he cannot sanction the officials involved in financial misuse. Apart
from the fact the partnership of CAG office, treasury and public accounts committee in assisting
CAG to discharge its functions, the permanent secretaries of the Ministries rarely informed the
public accounts committee on irregular financial or unauthorized expenditures as required by
auditing law. During audit the CAG could observe expenditures exceeding appropriation approved
by parliament but public account committee members could deny their responsibility concerning
the matter. All these happened because of the weaknesses of the legal mandate as the CAG has

12
been repeatedly complaining about unsatisfactory management of Public funds in government
ministries. This had resulted financial indiscipline in the country to reach unprecedented level,
Fraud and corruption were institutionalized by both public and private sectors Wadesango et al.
(2017) state that, implementation of audit recommendations is the responsibility of management
despite the constraints factors that might exist. However Legal framework in Zimbabwe (current
Audit Act and Public finance management Act) does not give the Controller and Auditor General
Power to monitor and enforce audit recommendations. The Auditor General has insufficient power
and authority to monitor the implementation of recommendations. (Nzewi et al., 2016) conducted
a critical review of the oversight role of the office of Auditor General in Financial accountability
in South Africa where by the study points out challenges facing Auditor General in ensuring
effective actions are taken to work upon audit findings and recommendations directed to the
audited entities. The study revealed that, the CAG lacks legal mandate to enforce the
recommendation. It was further noted that, CAG ends up with producing audit report and
recommendation and hand over to the parliament but he lacks legal authority to prosecute and take
disciplinary actions in case there is misappropriation or misuse of funds. Despite the fact that,
CAG office has no power to pose sanction also CAG reports are rarely debated in Parliament.
Failure to have power to enforce recommendations is a major setback for proper functioning of
Controller and Auditor General hence affects implementation of resolution aimed at improving
accountability. (Ng’eni, 2016) highlights that, the existence of Legal framework is paramount
important in governing audit activities. In Tanzania National Audit office is vested with the
responsibilities of ensuring proper Public Financial Management .Controller and Auditor General
through Public Audit Act of 2008 and its regulation (2009), Public Finance Act of 2004 and
standing order gives CAG the mandate to audit all Ministries, Department and agencies on the
utilization of government resources. Public sector audit can only be considered as a cornerstone
for effective public financial management when the recommendations issued are taken serious by
top management. Contrary, if the issued recommendations are ignored through induced political
interference, then the motives for public sector auditing will not be attained.

Therefore government institutions should put more efforts in ensuring all recommendations are
attended to enhance government performance and reinforcing financial accountability in Local
government authorities. (Sikika, 2011) points that, apart from the fact that the maintenance of
accounting procedures are clearly elaborated as can be sanctioned legally but ensuring the proper

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use of public resources can not be sanctioned. This is because the Public Audit Act gives CAG
power to issue recommendations to audited entities which he submit to the respective accounting
officers in a given MDA’s ,in turns accounting officers are required to prepare action plan which
provides a road map on how the issued recommendations will be worked upon. The parliament is
the one required to scrutinize and making follow up of recommendations issued in government
institutions based on audit reports of CAG. Conversely enforcement of recommendations is
problematic due to inadequate ability of parliament to conduct follow up with the intention of
ensuring recommendations are acted upon by heads of the executive or Ministers. Masood and
(Rodhi, 2015) conducted a study on Factors Affecting the Success of Government Audits, the case
of Pakistan explains that, the office of Controller and Auditor General should have full autonomy
to exercise its duties without pressure. This promotes accountability and transparency in public
sector. However the Audit office lacks power to take actions in the events of malpractices. Auditors
only report audit findings to the management and issue recommendations in case of the observed
anomalies. A study conducted by (Bahtir, 2015) on factors for Non-Addressed Recommendations
from the Auditor General in Kosovo indicated that, the office of Auditor General in Kosovo did
not have power to penalize public institutions which has failed to address Auditor General
Recommendations for unknown reasons. Also the study revealed that, Parliamentary oversight
committee has limited power to compel heads of the executives to implement Auditor General
Recommendations. Furthermore, the Auditor General office cannot impose penalties to audited
entities once they ignore the audit opinions and recommendations issued instead they keep on
repeating the same recommendations .It is the responsibility of the parliamentary oversight
committee to remind public institutions to implement Auditor General recommendation failure to
do that hinders effective accountability in public institutions over the use of resources. (Acharya
et al., 2014) pointed that in India the law authorize CAG to make regulation to conduct audits.
However, there is no regulation to enforce the Government to take corrective actions in case there
is presence of irregularities. Apart from the fact that Heads of departments have an obligation to
prepare annual public statements on pending observation raised in audit reports and the statement
should include action taken against observed irregularities, whilst there is lack of serious efforts
taken by the executives to comply with audit findings and inadequate corrective action taken
against audit observation. Consequently, these has weakened impact of Controller and Auditor
General audits as well as resulting into wastage of time and financial resources on the side of CAG

14
in pointing repetitive gaps over years without any efforts. (Mentero and Blanc, 2019) pointed that,
enforcement of audit recommendations is a challenge to many supreme audit institutions and has
an implication in auditing sustainable development Goals in many countries. In many countries in
the world the parliaments are responsible for ensuring audit recommendations are implemented by
the government. However, a survey result of 150 parliaments conducted by Antiparliamentary
Union in 2017 indicate that 66 out of 100 legislatures had effective procedures in place to review
audit reports. This weakens the potential for SDG audit to make impact at the national level.
Therefore following up audit recommendation issued and taking corrective actions for the
observed anomalies is vital.

2.4.2 Extent of Implementation of CAG Recommendations in Promoting

Accountability in Public Institutions
Sikika (2018) highlights that, audit and accountability are the cornerstones of public sector
auditing. Accountability is the bedrock of the sound financial management of the public sector as
it plays a crucial role in promoting good governance. The Controller and Auditor General and
parliamentary oversight committee are the main actors of accountability process in Tanzania.
Parliamentary oversight committee issues recommendations based on CAG reports and their own
inquires which intends to ensure public resources are used for the benefits of the tax payers
.Conversely , it was noted that historical the records of implementation of the audit
recommendations issues by CAG, PAC and LAAC is not satisfactory in Ministries, Department
and Agencies. It was revealed that, among the factors for inadequately implementation of CAG
and parliamentary oversight committee recommendations were due to inadequate capability of
Oversight committee in practical areas which include competencies on how to make queries,
witness and failure to have a strategic work plan. Also limited budget hinders the ability of the
PAC and Local authorities accounting committee (LAAC) to make scrutiny of all issues raised in
CAG reports and making follow up of the recommendations to the respective MDA’s. Also the
report shows that analysis of PAC and LAAC annual report for the period covering 2013/2014 and
2014/2015 financial years indicates that, both committee has been pointing out same problem and
issue similar recommendations each year. PAC chairman claims that he feels that is going around
in circles due to the fact that he always re issue similar recommendation recurring in every financial
year. Also the report point out that the committee had several options to do in case the executives
fails to implement audit recommendations. It was reported that during visit to assess the extent of

15
implementation of the issued recommendations to the executive the PAAC and LAAC can
recommend governed by public finance Act(surcharge and penalties) which gives mandate PAC
and LAAC committee to deduct money from accounting officer if the committee finds funds
misuse. However the chairman of LAAC and PAC acknowledge that such power is rarely put into
force. The report further report that oversight committee members are not always persistence in
following up recommendations from issued raised in hearings and CAG reports, also sometimes
the committee forgets issues to follow up. The committee do not have a clear impact and the chair
of the committee and appointed member to follow up recommendations do not hardly push hard
the public organization to implement the recommendations raised The contributing reasons for this
is due to lack of willingness to persist and lack of clarity to the committee member on how far they
are supposed to push an issue and who took power at the end of the day. Therefore power over the
committee versus boundaries of the executive concerning use of public fund should explicitly be
defined. Acharya et al (2014) point, out that volumes and contents of the audit reports has been
raised many concerns. CAG reports has been producing hundreds of audit reports, financial
statements, and inspections reports every year. This had created burden to effective follow up of
the audit reports to the executives. Since number of CAG reports is large, public accounts
committee are sometime overloaded to use all these reports effectively. They pick few
observations and few paragraph indicated in audit reports for seeking evidences and order the
executive to reply in writings with the identified timeframe. Consequently even the selected
paragraphs are not discussed fully due to limited time and burdens of meetings of the committee
members. Therefore huge number of CAG reports could be the contributing factor for
parliamentary oversight committee to read thorough the reports for following up observed gaps to
the executives Sharif (2015) found that, there is cordial relationship between National audit office
and Parliamentary oversight committee in promoting accountability in public institutions. PAC’s
in commonwealth countries relies on the reports of Controller and Auditor General to exercise
their duties .The study reveals barriers which hinders Parliamentary oversight committee in
holding Executive accountable which are mainly contributed by Ineffective follow up of the
Recommendation contributed by shortage of time, capacity resources and increase of the CAG
reports which has increased the burden to PAC to effectively conducting follow up. Sikika (2011)
revealed challenges facing parliament oversight committee in exercising their function regarding
effective follow up of CAG and committee issued recommendations. Firstly insufficient resources

16
to effectively monitoring and evaluations of the oversight committee and inadequate established
monitoring instruments for the committee members. This has led what the committee has
recommend to remain on paper until next year when they start tracking progress made based on
CAG audit reports. Also since the committee members are members of parliament it is important
to have an independent monitoring and evaluation unit to follow up the recommendations. Failure
to do so will result the committee to duplicate similar comments without any reforms. The
chairman of PAC committee further claims that the committee lacks legal mandate to enforce its
recommendations. It only relies on political and administrative influence. Ghana and Uganda as
the best practice a government institution which violate financial procedure is held accountable by
deducting a certain amount of money until it rectify the situation. While in Uganda once action
office of the executive misuse public funds is alleged to have committed a criminal case for
financial misconduct and he is arrested. PAC committee sometimes moves with the police. Mzenzi
(2015) on the role of External Auditing and Accountability in the Tanzania Local Government
authorities (LGA’s) reveals that, external auditing plays a vital role in enhancement of
accountability in LGA’s. The audit findings highlighted in the reports can promote accountability
especially when the scope is widen to provide sufficient information and when action officers of
respective Public organizations implement fully all recommendations issues by CAG. Conversely,
for the CAG audit recommendations to be implemented depend on the adherence of the legal
auditing requirements and if there is established sanctions for failure to adhere recommendation
issued.

Furthermore, Atuhumuza (2016) on assessment of factors that affect successful implementation of

the Auditor General’s recommendations in local governments in Uganda pinpoints that, there are
various factors contributing to inadequate implementation of controller and Auditor General
Recommendations. These factors are categorized into; organizational factors individual factors
and nature of the audit findings. The study found that organizational factors act as the determinant
for successful or unsuccessful implementation of audit recommendations .Funding constrains were
ranked as among the factor for which hinders effective implementation of recommendation of
controller and Auditor General in Central and Local Government. Due to the fact that budget
allocated in Local government are scarce it became difficulty to direct the fund for implementation
recommendations issued from CAG instead they allocate budget in priority areas such as
recruitment of staffs. For the case of Individual factors the study reveals that, for effective

17
implementation of CAG recommendations by audited organization recruitment of staffs with
adequate knowledge, skills with right attitudes are paramount important .Also the study found that
the nature of audit findings has an impact toward implementation of audit recommendations. The
study noted the reoccurrence of the same findings in every year implies that parliamentary
oversight committee does not play its function adequately as it is mandated by the constitution to
monitor and oversee the implementation of CAG recommendations. Kassim (2014) asserts that,
audit forms an essential role in the financial management and it is a key organ in ensuring proper
function of parliamentary democracy. Through auditing, accountability of the Executive is secured
to the Legislature, as audits help the parliament to exercise financial control over the executives to
ensure funds are properly utilized for the intended purposes. Policy Forum (2013) says, there is
complain from CAG regarding implementation status of previous audit recommendations. Only
half of recommendations issued by CAG in previous audits (2011-2012 Financial Years) were
implemented. Also 77 MDAs/Regional secretariats had outstanding queries amounting 637 billion
from previous audits. This is not a good indication for the realization of value for money on the
use of Government resources as CAG efforts become meaningless if the issued recommendations
are ignored. Review of CAG citizen report for financial year 2016/2017 reveals that follow up of
recommendations on previous issued recommendations which involves different audit conducted
are not satisfactory. These recommendations have been issued at Central Government, Local
Government and parastatal organizations and development projects as well. The analysis made
shows that there is weaknesses in implementation of CAG recommendations in Local government
authorities compared to Central government and parastatal organizations. Out of 93 of
recommendations issued 46 recommendations equivalent to 49.4% was not yet started to be
worked upon by LGA’s. Therefore further government efforts are needed to ensure
recommendations issued are implemented for assurance of value for money in the utilization of
public resources. Furthermore, A report from TWAWEZA(2015) through Sauti za Wananchi
reveals that, CAG has been auditing MDAs and reveals irregularities in management of public
funds for many years, however the issued raised by CAG has not yet resolved. Through issuing
audit recommendations CAG intends to improve Government performance and streamline
accountability process. However, its neither the CAG role nor the power vested to CAG to enforce
implementation of the audit recommendations. The key responsibility for implementation of CAG
recommendations is under the mandate of accounting officers of respective government entities.

18
2.7 Research Gap
Studies done by Lody V (2017) has indicates that, among the factors influencing CAG
recommendations includes professional skills and knowledge of audited institution, effectiveness
of management and prevalence of designated unit responsible coordinating implementation of
CAG. Also Strictness of regulatory framework and adequate time provided by CAG in conducting
follow up. The study acknowledge the existence of relationship between challenges facing public
sector entities and implementation of CAG issued recommendations in public offices. Also Bahtir
(2015) shows that audits recommendations remains implementable in Kossovo due to weakness
of legal framework on enforcing audited institutions to implement the given recommendations and
limited capacity of parliamentary oversight committee in conducting effective follow up. Since
introduction of performance audits in 2007 in Tanzania many public institutions has been audited
to assess whether their systems, programs and interventions performs in accordance to principles
of efficiency, effectiveness and economy and if there is a room for improvement. However, no
research has been conducted to examine reasons for inadequate implementation of performance
audits recommendations. It is high time this study has been conducted to come up with findings
which will assist the Controller and Auditor General, Parliamentary oversight committee and
policy makers to device measures which will ensure recommendations are adequately
implemented or suggested otherwise.

19
 CHAPTER THREE

RESEARCH METHODOLOGY
3.0 Introduction
Research methodology is a way to find out the result of a given problem on a specific matter or
problem that is also referred as research problem. In methodology, researcher uses different criteria
for solving/searching the given research problem (Williams, 2011).This chapter covers a broad
description of the research design and type of the study. The chapter also describes the study area,
the study population, sample size, sampling procedures or techniques, data collection methods and
data analysis techniques.

3.1 Research Design

This is a descriptive study. This method design is selected to capture a broad range of information
and to provide a researcher with an opportunity to elicit information and natural setting of the
research area. Kothari (2004) explains descriptive research design as an approach which intends
to describe state of affairs. The design allowed a researcher to report what is happening or what
happened without a control over variables. Therefore the researcher use descriptive design in order
to assess the reasons for inadequate implementations of CAG recommendations in Public
Institutions by collecting data from National Audit Office of Tanzania.

3.2 Study Population

A population is a group of people, objects from where a sample are taken for measurement, or in
another way we can say that, a population is the total of objects under investigation (Kamuzora
&Adam, 2008). It refers to the group of people, events or thing, which the researcher intends to
investigate, and has one or more characteristics in general. ). The targeted population of the study
is NAOT workers especially auditors. In this study, the study population comprised of twelve (12)
officials from NAOT from Ministry of health, external auditors department and accounts
department. These officials are key in assisting the researcher to get information that are useful for
this study.

3.3 The Sample Size and Sampling Procedures

3.3.1 Sample size
Sample size refers to the number of items or objects to be selected from the universal to constitute
a sample (Kothari, 2006). Also sample size refers to the number of participants or observations
included in the study (Institute for Work & Health, 2008). The sample size targeted is 12 of
National Audit office, the study included various staffs from Performance Audit division which
include 2 assistant Auditor General, 1 Chief external auditors and 8 performance Auditors. This is
because they are responsible for executing performance audits and are involved in conducting

20
follow up of performance audit recommendations. Assistant Auditor Generals are key because
they interact with Public Accounts Committee. All these staffs are selected based on their
availability in the office.
3.3.2 Sampling Procedures
This study adopted purposive sampling technique. According to Gupta (2011), Purposive sampling
involves deliberate selection of unit in a population to represents a universe. Purposive sampling
method is used intentionally to get information from the key figures from NAOT. The nature of
their responsibilities meant an important experience to source for information concerning
implementation of CAG’s recommendations. As such, they help the researcher to acquire useful
data for the research.

3.4 Data Collection Methods

Primary data collection method will be used during the study, includes questionnaire and
interview. Secondary data will also be used to supplement the collected primary data that is
documentary review. These methods allowed the researcher to collect in depth information
concerning the study area. Based on the research design used, the researcher assured of gathering
both quantitative and qualitative data, using a several data collection techniques such as,
interviews, documents and secondary data (Bhattacherjee, 2012).
3.4.1 Interviews
An interview is a technique for gathering information which provide a room for collecting in depth
information than questionnaire. Researcher prepare interview guide based on general objective and
specific objective of the study. Researcher employ interview because they allow face-to-face
communication with the interview guide may contain instruction for the interviewer that is not
seen by respondent, unlike surveys, the interviewer has the opportunity to clarify any issues raised
by the respondent or ask probing or follow-up questions (Bhattacherjee, 2012). On that, regard in
depth interview administered to the respondents at National audit to collect their views on the
reasons for inadequate implementation of CAG issued recommendation in public sector entities.
The researcher conduct interviews with officials from external auditors of the ministry of health at
NAOT to gather evidence concerning the study. This due to fact that these officers are conversant
with the topic. Also, the study interviewed various officials at the National audit office
(Headquarters) comprising of senior officers (Assistant Auditor Generals), Chief External
Auditors (CEA) and team leaders from the Performance and Specialized Audits Division because
they are key in providing information pertaining the reasons for inadequate implementation of

21
CAG recommendations. These officials are also involved in conducting follow up of CAG issued
recommendations.

3.4.2 Questionnaire method.

Questionnaire refers to the typed and printed questions in a definite on a set of form (Kothari,
2004). Also, questionnaire is a research instrument which consisting a series of questions and other
prompts for the aims of collecting data from the respondents (Leavy, 2017). There are two types
of questionnaire which are structured and unstructured questions. Structured questionnaires are
those questions in which there are definite, concretes and pre-determined questions and
unstructured questionnaire are those questions in which characteristics are not present (Saunders
& Thornhill, 2009).In this study researcher preparing a structured questionnaire. This Method is
effective method of data collection because it offers a fast, efficient and inexpensive means of
gathering adequate information from a sample size designed and it’s able to a researcher obtaining
both qualitative data and quantitative data. In this study questionnaire will be distributed to a
selected respondent. A set of questions will be prepared and distributed to some auditors of national
audit office (NAOT) that is chief executive auditors and team leader and auditors. The advantage
of using questionnaire method is, it covers large sample at low cost and give respondent adequate
time to give well answers.

3.4.3 Documentary Review

Document review is a method that involve examination of various documents such as reports,
laws, files, books, policies, manuals etc. The researcher use this data collection method to obtain
information from different articles, journals, newspapers, books, research papers, laws, journals
and regulation etc. This method help the researcher to acquire more information necessary for the
study and learn more experience from other countries implementation of Supreme Audit
Recommendations. Also the study reviewed reports from independent studies, CAG audit, CAG’s
follow up of the implementations to audited entities of 2015 and 2017, parliamentary reports and
reports think tank i.e. REPOA, SIKIKA, HAKI ELIMU. Audit act of (2020) and regulation (2009)
will be reviewed to get insight on the mandate of the CAG in discharging his duties.

3.5 Data Processing and Analysis

Data analysis is the process of systematically applying statistical and logical techniques to describe
and illustrate, condense and recap and evaluate data (Savenye& Robinson, 2004). The collected
data will be clearly edited and analyzed descriptively. Qualitative data are described compared so
that ca be explained and defended to provide findings as per research objectives, this done also to
22
provide a description and elaboration of data from respondents to ensure completeness, accuracy,
clarity, uniformity in line with the study objectives. The collected data organized in such a manner
that they answer the research questions. The information are gathered from 12 respondents from
NAOT through interview which further enabled the researcher to capture information.

3.6 Reliability and Validity of Data

3.6.1 Validity
Validity in research refers to the extent to which findings are consistent with the researchers’ intent
of the study. It is more concerned with the measurement of the data and the integrity of the
conclusion reached in the research. Therefore, validity refers to the “truth, authenticity and
relevancy of data” (Bryman, 2003). To ensure validity the researcher employs more than one data
collection techniques such as interview and document review and those are tested to ascertain if
they give a true reflection of research variables.

3.6.2 Reliability
Reliability in research is when the measurement provides consistent results
(Kothari2003).Therefore the researcher verified information collected from respondents by
triangulating information from different sources so as to verify of information. The researcher
compared the accuracy of the data collected from interview and compared them with review of
various documents to be in a position to establish a pattern of information.

3.7 Ethical Consideration

In conducting this research several ethical issues are adhered .First in a course of conducting this
study, the study adhere to the requirement of informed consent where by the participants will be
informed on the objective of this researcher hence voluntary participation of the respondents are
considered during data collection. The researcher assure respondents that the study data will be
treated as confidential and their identity will not be exposed. The researcher observe respondents
anonymity by not exposing respondents identity like names, age are treated confidential. All
information collected are used for the study purpose and not otherwise. Also researcher consider
authenticity of the research by avoiding plagiarism by acknowledging all ideas used from
secondary sources., plagiarism are avoided strictly at all costs by making sure that no part of the
study uses ideas of others without acknowledging them.

23
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27
Appendix 1 INTERVIEW AND QUESTIONNAIRE GUIDE FOR KEY
INFORMATIONS TO NATIONAL AUDIT OFFICE-HEADQUARTERS.
I undergraduate students at Mzumbe University. I am doing academic research on the
ASSESSMENT THE CHALLENGES FACING THE PUBLIC SECTOR ENTITIES IN
THE IMPLEMENTATION OF THE CONTROLLER AND AUDITOR GENERAL
REPORT RECOMMENDATION IN TANZANIA, A CASE STUDY OF NATIONAL
AUDIT OFFICE OF TANZANIA (NAOT) DODOMA.
Your experience and knowledge will contribute a lot and will be useful to the study. Kindly
fill this questionnaire with whatever information required as sincerely as
possible.
All information will be used purely for academic purposes and will be confidentially
treated.
Section A: Personal Information
1. Gender
…………………………………………………………………
2. What is your age
…………………………………………………………………
3. What is your highest level of education?
…………………………………………………………………
4. Do you have any knowledge of an external audit?
…………………………………………………………………
SECTION B
Main research question
What are the contributing factors for inadequately implementation of Controller and
Auditor General Recommendations in public sector entities?
Specific research questions
1. What are the policies, laws, regulations and guidelines in place to enhance
enforcement the implementation of the CAG’s recommendations in Public Institutions?
• Does the existing legal framework strong enough to compel audited entities to implement
all issued recommendation to ensure proper use of public resources?
2. To what extent the implementation of CAG’s recommendations public sector
entities?

28
 • Does NAOT effectively conduct follow up to ensure effective implementation of issued
recommendation in public sector entities?
• Does the audited public sector entities aware on the performance audit so that they can
work upon on the recommendations issued in enhancement of accountability?
• Does the PAC have adequate capacity to ensure audited entities implement all issued
recommendation and held them accountable in the event of deviation?
3. What are the reasons for insufficient implementation of CAG’s recommendations by
Public Sector Entities?
Is the time set to ensure implementations of Performance audit recommendations
sufficient?
• Is there any budget set aside to facilitate implementation of performance audit
recommendations in public sector entities?
Are the recommendation issued to audited entities feasible so that they allow them to
take actions to improve observed weaknesses indicated in audit reports?

29