President Uhuru Kenyatta (second left) with Cabinet Secretary for
Devolution and Planning Anne Waiguru (third left) and NYS Director
Nelson Githinji (left) inspect a clean-up exercise in Kibera in January.
PSCU
Folks, the public financial management in this country is in a
total mess. This is the biggest lesson from the disclosures made last
week by the Planning and Devolution minister, Ms Anne Waiguru, when she
described how insiders tried to steal Sh826 million from the budget of
the National Youth Service.
There are big issues of
public policy behind the Sh826 million saga that should concern all
taxpayers, regardless of the side of the political divide they belong.
I
say so because what is at stake here is the security and integrity of
the Integrated Financial Management Information Systems (Ifmis), the
computer system that processes the government’s financial operations all
the way from procurement to the point where payments to suppliers are
generated.
As the minister showed, insiders were able
to access government computer systems, arbitrarily shift money around
between vote heads, and generate payments to politically-correct
suppliers. Indeed, what Ms Waiguru described last week shows that Ifmis
is a manipulable system, completely vulnerable to breaches by front
office staff — and even hackers.
It is a very scary
place to be in as a country because Ifmis is at the core of the
government’s financial operations. Insiders and front office staff at
the National Youth Service easily intruded into the system to
irregularly commit funds.
Personally, I do not buy the
explanation that the password of the deputy director, Mr Adan Harakhe,
was stolen. Investigators must try to determine the circumstances under
which he lost it. How many other super users of the system have lost
their passwords in the past few months? How widespread is the problem
where insiders irregularly commit funds into Ifmis in this manner?
Did
the deputy director’s password qualify him to complete transactions
from start to finish? Why were the usual checks not applied? In
transparent systems with checks and balances, you are not allowed to
transact from the beginning to the end.
INTRINSIC WEAKNESSES
One
cockroach is out, but investigators must tell us how many more are
still in the nest. The saga points to intrinsic weaknesses in internal
audit systems within government. Clearly, basic rules of accounting and
public financial management are not followed.
What is
Ifmis? It is what techies call an enterprise resource planning (ERP)
system — software that allows you to collect, store, interpret,
classify, and manage financial processes — from the budget to
procurement and to approving and generating payments to suppliers. Among
the major vendors of ERPs in the world are SAP, Oracle, and IBM.
In
our case, what we are using is an Oracle business suite. The Sh826
million saga has clearly shown that we have not done a good job.
Corruption
is on the upsurge in Kenya because public financial management is not a
high priority. Ifmis is touted as a success, but this demonstrated that
the system is neither integrated nor foolproof.
If
the system was working, and considering that we are in the age of
computer-aided audit techniques, even rudimentary software should be
capable of flagging unusually large transactions before they occur.
President
Uhuru Kenyatta should order a fresh and complete investigation to
assess the risks and detail all recent breaches to the integrity of
Ifmis. Clearly, this Sh826 million saga is just a tip of the iceberg.
Why
do we, the citizens, allow people in power who are accused of
corruption to blind us through diversionary tactics? The game is all too
familiar: When you are accused of corruption, you blame it on your
political enemies and invoke tribal solidarity.
You
employ all kinds of tricks and machinations to make sure that focus is
not put on the right issue. Lately, they have come up with a newer
tactic: you leak documents exposing irregularities by your peers to
create a sense of shared complicity among sections of the political
elite.
By projecting the sense that everybody around is
guilty, it makes it easy for you to fudge responsibility so much so
that even though it is clear to everybody that you have committed major
irregularities, the conversation is reduced to scoring propaganda
points over who between you and your political opponents is more
corrupt. After all, we all sinned in the garden of Eden.
The
investigation into the Sh826 million scam should not stop at the NYS.
We must urgently overhaul the public financial management system.
jkisero@ke.nationmedia.com
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