Variable Alto Potencial

Strauss and Corbin (1998) described conditions as sets of circumstances which play roles in the occurrence of central phenomena. They classified conditions into three main categories: causal, intervening, and contextual. Causal conditions comprise sets

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of events which influence the occurrence of the phenomena, while intervening conditions are those that change or moderate the impact of causal conditions on phenomena. On the other hand, contextual conditions “are the specific sets of conditions (patterns of conditions) that intersect dimensionally at this time and place to create the set of circumstances or problems to which persons respond through actions/interactions” (Strauss & Corbin, 1998, p. 132). All the conditions observed in this research created circumstances for the occurrence of the central phenomenon. Thus, they are contextual in nature. The current research identified four contextual conditions of manipulating legitimacy, namely deficient regulatory systems, political interference, funding uncertainties, and donors’ influence.

7.6.1 Deficient Regulatory Systems

The deficient regulatory systems represent a macro conditioning context which created the circumstances which allowed the manipulation of legitimacy. In general, the Councils were subjected to multiple and uncoordinated regulations, which contained outdated, repetitive, and sometimes conflicting, provisions. The few amendments to the regulations were claimed to be externally driven and financially motivated, and failed to address operational needs at the Council level. These regulatory anomalies had led to the operational uncertainties which forced the Councils’ officials to manipulate legitimacy in order to ensure smooth undertaking of the Councils’ operations. For example, the revenue regulations had affected the Councils’ self-generated incomes significantly:

“We have a big problem on revenue collection. The approved collection rates are too small and unrealistic. You know, regulations do not allow us to charge any tax or to use any collection rate until it is approved by higher organs. The process of approval is too bureaucratic. Also, for political reasons, some Councillors are not willing to endorse the increase of the collection rates” (Mai, Revenue Accountant: KAMC).

This prompted the Councils’ officials to use a number of techniques, such as under- estimation of the self-generated incomes and inclusion of the GPG as part of their own revenues to manipulate the proportion of their self-generated incomes in order to accrue the Government grants. Despite the fact that the Councils’ regulations were substantially amended in 1999 and 2006, the amendments were not effectively

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integrated into the Councils’ operations, which, in some cases, conflicted with the effective implementation of the ‘decentralization by devolution’ policy. For example, whilst needs assessment flowed from the general public to the Government via the Councils, the planning priorities were dictated centrally by the Government. It was this context which prompted the Councils’ officials to maintain formal budget procedures only superficially, in order to resolve the operational difficulties. Furthermore, the LAFM (1997) and LAAM (1992), the oldest accounting regulations, in many respects contradicted the Local Government Finances Act No. 9 of 1982 (amended 2000), and the Local Government Authorities Tender Boards (Establishment and Proceedings) Regulations of 2007 (see section 5.2.4). There were also mismatches between the Local Government Finances Act No. 9 of 1982 (amended 2000) and Public Finances Act (2001). These anomalies meant that the Councils’ financial regulations were neither harmonised internally, nor with the external principal laws. Therefore, in order to ensure the efficient undertaking of the Councils’ operations in the deficient regulatory regime, the Councils’ officials applied a number of strategies, including establishing rhetorical rules and regulations and the maintenance of formal rules and regulations in a loosely coupled state.

7.6.2 Political Interference

Political interference from the Councillors and higher Government officials formed another macro conditioning context for the manipulation of legitimacy. Being hierarchically superior to the technocrats, the Councillors and higher Government officials imposed a number of directives which sometimes contradicted the efficient running of the Councils. Requests for contributions from the Councils following disasters and for entertaining National guests were some of the non-budgeted expenditures imposed by the higher Government officials on the Councils. Also, there were incidences where the Councillors and officials from the Government requested funds for personal use. In order to protect their employment, technocrats were forced to comply with both informal and formal directives automatically:

“We have so many directives here from the top…You may receive a call from RC [Regional Commissioner] requiring TZS 10,000,000 for the anniversary of the 50th year of the Independence…You may also receive another call requiring TZS 50,000,000 for the Zanzibar’s ship disaster and the Gongolamboto tragedy, and so

Accounting Practices in the Tanzanian Local Government Authorities (LGAs): Page 157 on. All of these expenditures were not budgeted for, and they know…If you refuse, you will not last in your employment even for three months. You have to accept their directives” (Coab, Municipal Treasurer: MDMC).

Because the funds were not budgeted for, at the very least the tendency noted above led to manoeuvring during the preparation of the financial statements, while sometimes the financial bribery was extended to supervisory bodies to cover the non- budgeted expenditures incurred by the Councils. Interestingly, some of the non- budgeted expenditures were covered by the general phrase of ‘National Interest’, a phrase which denoted that even though the expenditures were not budgeted for, they were essential for the smooth running of the country in general. Because this phrase was also known to the statutory auditor and other assessment bodies, this practice facilitated the manipulative techniques during the preparation of the Councils’ financial statements.

Similarly, political interference from the Councillors, which was created by the role ambiguity between the Councillors and the technocrats, constrained the efficient undertaking of the Councils’ operations. A higher level of interference was noted during the budget preparation, when the Councillors were eager to push for higher allocations of resources to their respective wards. It was this situation which forced the Councils’ officials to develop the pre-meeting strategy with the Council Chairperson and prominent Councillors in order to curtail much of the political interference during a formal budget session.

7.6.3 Funding Uncertainties

Funding uncertainties were both macro and micro contexts of the central phenomenon which emerged from this research. The unreliability of the external funds in terms of timing and amount, coupled with the increase of demand of the Councils’ services, forced the officials to adopt a number of strategies, such as

management of the procurement process, the practice of teeming and lading, and management of the internal funds in order to survive. Arguably, the unreliability of the external funds could partially have been addressed by strengthening the internal sources. However, as discussed in detail in Chapters 5 and 6, the internal sources were also constrained by political interference, deficient regulatory systems, and the

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self-interested behaviour of the technocrats and the Councillors. These factors were partly responsible for the reduction of the ability of the Councils’ self-generated incomes to finance their recurrent expenditures, as shown in the following figure.

Figure 15: The LGAs’ Self-Generated Incomes as % of Recurrent Expenditures

Source: Annual General Report of the CAG, FY 2005/06 to FY 2009/10.

High financial dependence facing the LGAs, had forced the Councils’ officials to be manipulative. This ensured the Councils with the availability of resources and support from the Government and donors. Therefore, high level of financial dependence, was one of the ‘enablers’ of the process of manipulating legitimacy. Because the operating environment was non-conducive, the ‘manipulative techniques’ were capable of ensuring the availability of funds for the Councils’ operations.

7.6.4 Donors’ Influence

“We have a problem with donors’ conditions. They put a lot of unnecessary conditions on their funds. Sometimes, you are encountered with a situation which donor funds could have been better used in addressing that particular situation, but you are not allowed to use. This is a big problem in our day to day operations (Mihe, Municipal Health Planner: KAMC).

The ability of the Councils to access more funds from the donors depended on, amongst other things, the extent to which they were able to comply with the

10.3% 8.5% 9.2% 8.0% 7.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2005/06 2006/07 2007/08 2008/09 2009/10

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requirements of donors. As was observed in the performance-based conditional grants systems, a high level of compliance attracted a bonus, and sanctions were applied to cases of low levels of compliance. However, the operating environment constrained effective compliance with some of the donors’ funding conditions, a situation which had led compliance games to be played in areas such as auditing and financial reporting in order to appear to satisfy the requirements of donors. Related to these factors were the opinions of the Councils’ officials that some of the conditions advanced by donors, such as the maintenance of the Health Basket Fund at the Council level, were inappropriate and created operational problems for the health facilities. In general, the responses of the Councils’ officials to these situations were mainly represented in the form of lobbying and compliance games, practices which aimed to solve the perceived operational problem which had been created by the influence of donors.