Treasury admits flaws in financial management system

Principal Secretary Kamau Thugge. Photo/Jennifer Muiruri 

By GEOFFREY IRUNGU

In Summary

• Ministries have been complaining that they get error-ridden IFMIS-generated financial statements that conflict with their own data.

The Treasury has admitted that the much-hyped government-wide financial management system has
had teething problems leading to queries over use of billions.

Ministries have been complaining that they get error-ridden IFMIS-generated financial statements that conflict with their own data.

Principal Secretary Kamau Thugge on Tuesday said, during the signing of a foreign loan agreement, that data entry problems had been the main issue dogging the system as staff make errors.

Recently, ministries, departments and agencies (MDAs) of the state reported that they had experienced discrepancies between the data held in the Integrated Financial Management Information System (IFMIS) and that in their appropriation accounts.

In one case, the IFMIS system showed that a ministry had spent Sh102 million when in fact it had spent Sh6 billion — opening the possibility of the system being used for theft of public funds.

“If you put in bad data, you get bad data. As they say, garbage in garbage out,” said Dr Thugge.

The PS said staff training had become important to ensure that they feed data in the system properly.

“We are trying to improve capacity. People have to learn how to use it so we are training staff at both the national and county government levels,” said Dr Thugge.

The PS said the system still had its merits as it could improve efficiency and enable the Treasury to properly track expenditures in MDAs. IFMIS was the docket of Devolution minister Anne Waiguru but she retained the same after the Cabinet appointment early this year.

Media queries

Dr Thugge spoke in response to media queries after a briefing on a Sh850 million loan agreement between Kenya and Khartoum-based Arab Bank for Economic Development (BADEA) which is owned by 18 Arab nations. The bank was represented by its director general Abdel Aziz.

The loan is intended to fund a water supply and sewerage project in Oloitoktok. It is to be reimbursed over a period of 30 years, the first 10 years is a grace period. It has an annual interest of one per cent.

The government will contribute another Sh150 million to the project. Only when the government releases its share of the funding will the donors come in, as is the practice with such projects. The bank has so far lent Kenya Sh12.3 billion which has been used to finance 27 development projects over the past 28 years.

“Since the completion of the Emali-Oloitoktok road which was financed by BADEA, the town has experienced a high influx of people which has increased demand for clean water and related facilities,” Dr Thugge said, noting that the loan was timely and will meet high demand for water and sewerage services
.

Mr Aziz said the loan was an indication of South-South cooperation.