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Performance Audit

Section 28 of the Public Audit Act No. 11 of 2008 provides mandate to the Controller and Auditor General to carry-out Performance or Value-for-Money Audit for the purposes of establishing the economy, efficiency and effectiveness of any expenditure or use of public resources by Ministries, Departments and Agencies (MDAs), Local Government Authorities (LGAs) and Public Authorities and other Bodies.

According to the Performance Audit Principles as stated in ISSAI 300, performance auditing is defined as an independent, objective and reliable examination of whether government undertakings, systems, operations, programmes, activities or organisations are operating in accordance with the principles of economy, efficiency and effectiveness and whether there is room for improvement.

Economy, efficiency and effectiveness (known as 3Es) form the theoretical platform for the perspectives and types of problems that are addressed in performance auditing. International Organization of Supreme Audit Institutions describes the concepts as follows:

Economy: The principle of economy means minimising the costs of resources. The resources used should be available in due time, in and appropriate quantity and quality and at the best price

Efficiency:  The principle of efficiency means getting the most from available resources. It is concerned with the relationship between resources employed and outputs delivered in terms of quantity, quality and timing

Effectiveness: The principle of effectiveness concerns meeting the objectives set and achieving the intended results

There are three types of audit reports that are produced by NAO. These are

  • Individual Performance Audit Reports;
  • General Performance Reports; and
  • Follow-up Reports

Forensic Audit

Is an audit aiming at the prevention and detection of irregularities, such as fraud, embezzlement and corruption through application of auditing skills to situations that have legal consequences/for use in a court of law.

Special Audit

Is a tightly-defined audit that only looks at a specific area of an organization's activities.

Financial Audit

In Tanzania, entities prepare financial statements in accordance with financial reporting frameworks stipulated in various legislations including the Public Finance Act, the Local Government Finances Act and the Companies Act. These legislations require Public Sector Entities to prepare and submit the financial statements to CAG within a period of three months from the last date of the financial year (i.e. not later that 30th September of every year).

CAG evaluates and expresses an independent audit opinion as to whether the financial statements are presented fairly in all material respects in accordance with the applicable financial reporting framework. In conducting the audits, CAG is guided by the International Standards of Supreme Audit Institutions (ISSAIs) issued by INTOSAI.

Compliance Audit

This audit focus on assessing compliance with the legal and regulatory requirements of the laws, regulations, established codes or norms, and agreed-upon terms that a public sector entity is expected to comply with in the execution of its roles and responsibilities. In compliance audit, CAG identifies subject matters that the audit will address, for example the entity’s compliance with Public procurements laws and regulations, adherence to environmental laws or compliance with staff’s codes of conduct.

Audit reports issued by CAG on regularity audit

The results of regularity audit are communicated through various reports as explained below:

  • Management letters which communicates audit findings and recommendations to the management of the audited entities;
  • Audit reports on financial statements which communicates the ‘Audit Opinions’ on the audited financial statements of the audited entities; and
  • Annual General Audit Reports which consolidate key audit findings from management letters of different audited entities and general recommendations addressed to the Government as a whole.

Information Systems Audit

Information Systems Audit also is the process of deriving assurance on whether the development, implementation, support and maintenance of information systems meets business goals, safeguards information assets and maintains data integrity. The CAG examines the implementation of IT systems and IT controls to ensure that the systems meet the government entities’ business needs without compromising security, privacy, cost, integrity of data, availability of data and other critical business elements.

Audit reports issued by CAG on Information Systems Audit

The results of Information Systems Audit are communicated through various reports as explained below:

  • Management letters which communicates audit findings and recommendations to the management of the audited entities;
  • Annual General Audit Reports which consolidate key audit findings from management letters of different audited entities and general recommendations addressing to the Government as a whole.

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