Sunday, November 2, 2008


Obtain a copy of most recent annual reports, accounts or any other relevant source from your organisation or an organisation of your choice. Scan through the details in No 2 below to help you judge the kind of documents you will need to ask for from your organisation. You might also need to talk to the relevant section/department on such matters related to the philosophy behind the way things/functions are set as they are in your organisation or in the organisation you chose. For a rich analysis each group member must contribute one source.
- Simchimbey, Hashim Ally
- Ijumba, Alice
- Mhache Paulo Adonram
- Kessy, Idaya J.
- Ridas, Kaliare
- Ndyanabo Ally

APRIL, 2008
Objectives of the study
The organization goals and strategies
Literature covered
Who are agency of Kinondoni Municipal Council
What are the agency problem
How to mitigate agency problem
Methodology of the study
The philosophy behind the structure
Conclusion and Recommendation
Bibliography and References

1.0 Introduction:
We obtain a copy of recent annual reports from Kinondoni Municipa council and scan it to help us to judge the kind of documents we will need to ask for. We also have a direct conversation with Head of Accounting Department (Treasurer) of Kinondoni Municipal Council who clarified to us about the philosophy behind the organization function.
The Kinondoni Municipal Council as one of the local Authorities in Tanzania has a role of maintaining law and order, rendering services in an efficient and effective manner and promotion of development activities among its inhabitants. This municipal council is legally obliged to prepare its annual financial accounts report on 30th September of each year. For this exercise the Kinondoni Municipal Council final accounts report for the period of May 2005- June 2006 have been used. Also the consultations were made to the key informant people in the finance department for clarifications.

2.0 Objectives,of the study:
- To explore and learn more on the meaning and scope of financial management undertaken by Kinondoni Municipal Council.
- To identify the goal of the organization that is Kinondoni Municipa council
- To identify the agency problems and make recommendations on how to mitigate the problems.
3.0 The organization goals and strategies:
Goals: The Kinondoni Municipal Council as one of the Local Authorities in Tanzania has a role of maintaining law and order, rendering services in an effective manner and promotion of development activities among its inhabitants. The strategies to achieve the goals for that year were:
- Construction and rehabilitation of primary schools
- Rehabilitation of municipal hospital, health centers and dispensaries
- Improvement of waste management services
- Construction of shallow and deep wells and urban water supplies
- Infrastructure development including road maintenance, foodstuffs market construction, sewerage system improvement.

4.0 Literature covering the need for firm goals:
Kinondoni Municipal Council final accounts report for the period of May 2005- June 2006 is one of the literature covered. The report includes The Notes to the Financial Statement as at 30th June 2006, Municipal Director Report, Consolidated Balance Sheet, Consolidated Statement of Income and Expenditure, Cash Flow Statement, Trial Balance, Schedule of Assets. Financial policy of municipal explain how municipal is required o allocate fund to fulfill goals and objectives and performance either organization has achieved or not is measured at the end of each financial period.
In referring to some theoretical review the statement of municipal financial policy is supported, for instance McMenamin J.Ch 9 in Financial analysis and performance evaluation insist that allocation of fund should base on goals and objectives of organization not otherwise, mean while review from www. omb.govt. in the performance measurement challenges and strategies (June 2003) illustrate that performance measurement Indicate what an organization is accomplishing and whether results are being achieved continue to explain that measurement helps managers by providing information on how resources and efforts should be allocated to ensure effectiveness. It keeps organization partners to focus on the key goals of organization.

5.0 Who are the Agency of Kinondoni Municipal Council:
The agency of the Kinondoni Municipa Coucil are staffs from different department that is Finance Department, Administration Department, Trade Industry and Market Department, Land Department, Education Department, Halth Department, Economic & Planning Department and other stakeholders who are working with an organization daily thus includes contractors, commission agency etc. The owner of the organization is government.

6.0 What are the agency problems:
The agency problem are the problems which arise due to delay in payment of their rights on time such as Salaries, Pension, Bonus, allowances, and payment due to service delivered by a private sector on behalf of the organization.

7.0 How to mitigate:
Mitigation of the agency problems can be done by making on time payment of the staffs and conducting meetings to solve unnecessary conflict which may arise within an organization.

8.0 Methodology of the study
The methodologies that have been used in this study are:
- Reviewing the secondary data: the annual financial report of municipal council for July 2005-June 2006.
- Interviews with the Kinondoni Municipal council officials
- Observations on the municipal environment hygiene activities and the structures

9.0 Findings
a. The specification of company goals and strategies:
These are normally done through participatory approach whereby community members are involved through the local government authorities channels to propose and prioritize their potential needs. The community is involved at the sub ward level, thereafter the ward compile all the issues raised by all the sub wards by studying and analyzing critically the intensity, magnitude and the importance. So each wards submit their concerns to the Municipal Council and at this level the council analyze again, rank and prioritize issues from all wards, identify the objects to be met for that year basing on the community demand and thereafter develop strategies to meet the objectives, and identify resources that will be needed to support the activities to meet the strategies and the goal set. The elective members of council ( Councilors ) represents community members at the Municipal level.
Municipal council compile the budgets received from the Ward Level and prioritize according to the estimated revenue for that year. Different stakeholder went through the proposed budget before final approval. One of the stakeholder involved are Dar es Salaam Regional Secretariat of which went through a proposed budget and advice according to the national strategies towards improvement of livelihood and poverty alleviation policies. Once the activities and the budget have been approved its when the Municipal Council can start implementing the activities.

b. The performance in such goals can be measured through non-financial and financial performance measures.
- Non-Financial Performance Measures:
o By assessing the community satisfaction on the provision of services
o By assessing the workers performances, the output in units per worker.
o By assessing the quality of the services being providing basing on the standards that have been set by the recognized professions and institutions.
o By evaluating the achievement of the targets that were set against the goals.
- Financial performance measure:
o Cost analysis: by assessing the cost involved against the quantity and quality of the output.
o By assessing the cash flow against the budget to meet the goals.
c. The Organization Structure of the Finance Department at Kinondoni Municipal Council is as follow:
Municipal Treasurer
Salaries Unit
- Preparing payment vouchers
Stores Unit
- Procurement
Revenue Unit

-Revenue collection
Expenditure Unit
- Payment of expenditures
Municipal Treasurer reports direct to the Municipal Director for final approval of department function.

10.0 The philosophy behind that structure is determined by :
- The local government directive from the central government which considers the demographic coverage and size of the population, the capacity of the municipal, the amount of fund and the nature of the activities undertaken by the organization.

d. The organizations’ key stakeholders are the Central government, Counselors, Civil Society organizations, Service providers from the government, Influential people and leaders i.e local government leaders, religious leaders, Business community and Community at large.
e. The executive pay structure in Kinondoni Municipal is designed basing on the Tanzania Government Scale (TGS A – TGS Q which is a super scale) and payment is made taking in consideration of the several factors such as Level of education, Working experience, The job position, that include role and responsibilities, Nature of the job such as rare professional jobs against common jobs.

11.0 Conclusions focusing on what we have learned from the study:
We learned that Kinondoni Municipal Council is legally obliged to prepare its Final Accounts and submit it for audit before statutory required date which is 30th June of each year. We learned also that the report is prepared basing on the Local Authority Accounting Manual (LAAM) of 1992, Tanzania Financial Accounting Standards (TFAS) issued by the National Board of Accountants and Auditors as well as the Local Authority Financial Memorandum (LAFM), 1997.
At the end we saw that the allocation of fund is determined by the goals and objectives of the municipal council while the performances depend on how the municipal achieve to fulfill goals and objectives.

12.0 Bibliography/references:
1. Kinondoni Municipal Council, Abstract of Accounts and Statements for the Period ended 30th June, 2006.
2. McMenamin J.Ch : Financial Analysis and Performance Evaluation
3. www.omb.govt (June, 2008) Performance measurement challenges and strategies.

No comments: