civil service schedule and closer to private sector levels. 388. However, EAs face many challenges of their own. They are prone to: capture by private sector clients; fiscal problems caused by poor management; and, a loss of control over staffing as the Government increasingly relies on the agency’s internal controls rather than on central government financial and personnel rules and systems. The CRM notes that, for many developing countries like Tanzania, where civil service is still weak and ethical standards need to be aligned with the expectations and interests of the public, these challenges are real and formidable. Against a backdrop of informal systems, patronage, and clientelism, the management of EAs has to be more efficient. The risk of capture by private sector interests and corruption are very high in view of their relative autonomy in relation to public service systems. Tanzania has not managed to escape from risks associated with the creation of autonomously operating EAs. 389. The following features of EAs in Tanzania provide the background to an analysis of the malaise affecting their operations. EAs are governed by rolling three-year strategic plans, annual business plans, and key performance measures reviewed by the Permanent Secretary of the parent ministry. Under the Executive Agencies Act, the CEO of an EA must produce an annual report on the quality and quantity of services with a set of accounts and financial statements for audit by the Controller and Accountant General. The Controller and Accountant General (CAG) report is also presented to Parliament. The CEO is also responsible for designing capacity building programs for EA staff. 390. The CRM notes that, owing to their relative autonomous status, EAs in Tanzania may deviate from civil service pay scales and can remunerate staff closer to private sector levels. EAs observe accounting standards established by the Controller and Accountant General and must establish a satisfactory system of internal audit. EAs also have the authority to make virements between different recurrent costs headings and may carry forward both capital and recurrent unspent budget funds. More importantly, perhaps, EAs are also responsible for advancing competitive procurement principles and, as public entities, they must observe the Public Procurement Act adopted in 2000.60 The CEO of an EA is accounting officer for the agency. The Permanent Secretary of the parent Ministry retains responsibility for the overall strategic direction as chair of the Ministry Advisory Boards (MABs). The Minister has political oversight over the EAs. 391. According to an assessment report of EAs in Tanzania, their institutional framework and management systems are conducive to improving public service efficiency and effectiveness of delivery.61 The report noted that in most of the Agencies, significant progress had been made since their transformation into EAs. Commendably, developments affected the institutional, financial, administrative and managerial systems which are still being improved. Similarly, automated accounting control systems instilled financial discipline and enhanced accountability. In fact, public servants are much more motivated by the higher remuneration they receive, providing powerful work incentives and improved performance. Above all, most agencies introduced participatory management systems, thereby improving public service efficiency and effectiveness. The report concludes that EAs “have begun to contribute more to the country’s economic growth, while reducing the amount of government financial resources that would have been needed to provide pubic services.” 62 392. Regrettably, the CRM observed that, while the foundations for efficient and effective service delivery may have been established with the creation of EAs, corruption in the public sector has significantly increased over the past decade. A major contributing factor is related to public procurement service decentralisation. Service delivery is now mostly through Executive Agencies that have their own procurement boards. With 30 per cent of the public budget allocated to goods and services, the public sector was vulnerable to systematic plundering by some government officials.63 Decentralising procurement to MDAs offered incentives of various types for public sector corruption, with high EA involvement. National budgets proliferated, stimulating in turn the proliferation of service companies, many of which belonged to civil servants, while simultaneously providing lucrative contracts to existing ones.64 60 The Public Procurement Act was passed in 2002 and allows all MDAs to procure goods, services, and works according to government procedures. The Act abolished the Central Tender Board, decentralised procurement, and established an oversight body: the Public Procurement Regulatory Authority (PPRA). The Act requires the establishment of a Procurement Management Unit in each MDA and LGA, staffed by procurement cadre. 61 Study on Impact Assessment of Executive Agencies in Tanzania, Main Report, Economic and Social Research Foundation (ESRF), November, 2004. 62 Ibid, p. 38. 63 Brian Cooksey, Public Goods, Rents and Business in Tanzania. Africa Power and Politics (APP), Background Paper No. 1, June 2011. 64 Ibid. pp. 38-39. 89