Financial and Operational Systems Strengthening

Location: Dar Essalam, Tanzania

Date: November 28 – December 08, 2016

Expert: Hazem Mansour

1. Executive Summary

This case study examines a Short-Term Technical Assistance (STTA) mission conducted during Year 3 of the a project in Tanzania. The primary goal was to ensure the efficiency of financial and operational systems, address cost-share backlogs, and finalize the 2016 F&A Action Plan. While core systems like mobile money were functioning well, significant gaps were identified in inventory management and QuickBooks (QB) optimization.

2. Objectives and Methodology

The assessment focused on three core pillars:

Financial Functionality: Reviewing fund flows, mobile money processes, and transitioning QuickBooks to multiuser mode.
Operational Systems: Evaluating asset management (NXP) and procurement workflows.
Cost Share Compliance: Developing plans for Year 3 and documenting the Year 2 backlog.

The consultant utilized a mix of document reviews (manuals and logs), stakeholder interviews with key personnel (COP, DFA, Finance Manager, and HR), and physical inventory sampling.

3. Key Findings

A. Financial Operations & Mobile Money

The project utilizes a mobile money system (Vodacom) for regional payments, which was found to be highly effective and safer than carrying cash.

Strengths: Strong segregation of duties and successful use of the “Straight to Bank” (S2B) online payment system.
Challenges: Occasional technical issues with participant phones and potential lack of mobile agents in remote villages.

B. QuickBooks (QB) Multiuser Transition

The team sought to move away from re-entering regional data manually.

Outcome: A multiuser mode was successfully tested on a backup server, allowing two accountants to split duties (one for advances/reconciliations, one for general payments).
Constraint: Direct remote access for regional offices to the central database was deemed too risky and was ultimately rejected by the COP.

C. Procurement & Asset Management

The procurement process was functional but suffered from delays because the Finance team, rather than the Administrative Manager, issued Purchase Orders (POs).

Inventory Crisis: A physical check revealed that 55% of sample items could not be identified, leading to a “High” risk rating.
Data Gaps: 88 items were missing tag numbers, and 2 projectors lacked cost data.

D. Cost Share

There was a significant backlog in documenting cost share from Year 2. It was discovered that sub-recipients do not have separate activities, meaning the organization must capture cost share for all integrated activities.

4. Proposed Operational Improvements

Revised Procurement Workflow

To speed up operations, the following change was implemented:

Old Way: Finance issued the PO.
New Way: Admin Manager issues the PO after Finance approves the bid analysis; the DFA reviews and the COP signs.

Asset Management Recovery

A full physical inventory must be completed by February 2017 by an employee outside the Admin department to ensure objectivity.
All missing tags must be applied, and descriptions must be standardized.

5. Aggregated Action Plan

The following priority actions were established to ensure the project remains “audit-ready”²⁶:

Category	Action Item	Responsibility	Timeline
Finance	Finalize QB user access matrix and live server upload.	IT Specialist	Immediate
Operations	Complete physical inventory and update location logs.	Designated Employee	Feb 2017
Cost Share	Hire an intern/employee to capture backlog and future data.	CHSS Management	Jan 2017
IT Security	Restrict server folder permissions to prevent accidental deletion.	IT Specialist	Immediate
Compliance	Quarterly regional office visits by Compliance Manager.	Compliance Manager.	Quarterly

6. Conclusion and Next Steps

The CHSS Tanzania project has robust core financial foundations, particularly regarding its mobile money and electronic payment systems. However, immediate attention is required to rectify the high-risk inventory discrepancies and the cost-share backlog.