585. In Zanzibar, the MTEF was introduced in 2002. The PER process involves the Central Bank, the Tanzania Revenue Authority, the Zanzibar Revenue Board, the Chief Government Statistician, the Ministry of Finance and Economic Affairs, and non-state actors. There are PER working groups in all ministries and a special PER group for civil society. The budgeting system is reviewed so that it is in line with the MTEF, and PER and also aligned to that of the Union. Fiscal decentralisation 586. The report states that for a long time, Tanzania implemented a decentralisation policy whose legal framework is enshrined in several legal provisions, particularly: the Constitution of the United Republic of Tanzania (Chapter 8), the Local Government (District Authorities) Act, Local Government (Urban Authorities) Act, the Local Government Finances Act, Cap. 290 (which provides for sources of revenue and the management of funds and resources of Local Government Authorities and for matters connected or incidental to securing the proper collection and sound management of finances in the Local Government system); and, the Regional Administration Act. The LGAs, through these provisions, generate their own development policies and programmes. 587. In addition, the government implemented key reforms to enable LGAs to manage public financial resources. These include: the good governance component, fiscal empowerment to improve the LGA revenue capacity, human resource development, restructuring local authorities in line with the decentralisation process, legal and institutional frameworks to continue improving regulations that still impede the smooth working of LGAs, and decentralisation by devolution (D by D) allowing for authority, powers, and resources to be devolved to LGAs such that they have mandate over their priorities. 588. Identified challenges attendant to fiscal decentralisation include: inadequate local government official capacity to develop and execute local plans and budgets; insufficient LGA capacity to generate revenue for development and recurrent programmes; narrow tax base rendering LGAs unable to meet a larger part of their recurrent and development expenditures; too much LGA dependence on central government for resources that affect governance; ineffective expenditure control by MDAs and LGAs; weak distinction at the local level between central government administration and LGAs at the level of implementation, as a result of which there is a tendency for central government to interfere with the operations of LGAs; weak transparency and accountability on local government revenues; and weak planning in accordance with MKUKUTA and MKUZA by LGAs. Oversight over Government’s fiscal operation 589. The CSAR discusses accountability in the management of public finance. It emphasizes the need for disclosure in the use of public resources, strengthened procurement processes and independent expenditure audits. The underpinning principles for controls and accountability are stipulated in The Public Procurement Act No. 21 of 2004. It provides that: (a) no tax shall be imposed and no money shall be spent without the authority of the National Assembly; (b) expenditure shall be made only for the purpose authorised by Parliament; (c) there shall be a single fund known as the Consolidated Fund for receiving and recording all revenues and expenditures, unless otherwise directed by Parliament; and (d) all money spent on the Consolidated Fund must be accounted for to Parliament. 590. The participatory Public Expenditure Review (PER) process involves key stakeholders, namely: the Ministry of Finance; President’s Office; Public Service Management, Regional Administration and Local Government; sector ministries; Tanzania Revenue Authority; Bank of Tanzania; research institutions; Development Partners; and civil society. The overall objective of the PER/Medium Term Expenditure Framework for a three-year period is to monitor the budget management, control and accountability processes and to improve budget management in general. The main focus of PER is to improve budget accountability, enhance budget sustainability, promote prioritisation of expenditure objectives and allocative efficiency, and strengthen an output-oriented budget that focuses on service delivery improvements. 591. In terms of people’s participation, the prescription for enhancing the people’s participation in economic and public financial resource management is adequately documented in the CSAR, the Development Vision 2025, the 125