Treasury insists Ifmis is foolproof and does not allow for loss of funds

The software currently being used to run the country’s financial system has adequate checks and balances to curb corruption, the national Treasury has said.

Treasury, while rebuffing claims the Integrated Financial Management Information System (Ifmis) was aiding graft, on Sunday said the system was foolproof and did not allow loss of funds.

“The system has inbuilt checks and balances to ensure segregation of duties such that no single user carries out an end-to-end transaction. The approval hierarchy ensures security, accountability, checks and balances and leaves audit trails at every point of action,” said Treasury in a statement.

It further maintained that access to the system was role based where an accountant could only perform functions associated with that duty and no other, boosting transparency.

“The system provides audit trails of all financial transactions with details of the person who logged in, the time, the computer used and the action performed,” said Treasury as it sought to give a reassurance over the role of the system in corruption.

Treasury also cited the system’s “ability” to pursue audit trails.

“The system also retains information on the identities of all the officers involved in processing and approving the transactions from the point of requisition, validation, approval and payment including the beneficiary bank accounts into which the funds were paid,” Treasury said.

Ifmis has been at the centre of corruption claims in some of the largest graft syndicates to hit Kenya in recent months both at the national and county government levels.

This has led to mounting questions on the use of the system in ensuring accountability in use of public funds.

MILLIONS SIPHONED

“It should be noted that systems are operated by people and, therefore, the efficiency of the system depends of the integrity of the users,” said the statement.

Police investigations last October established how hundreds of millions of shillings were siphoned from the National Youth Service (NYS), after entries for payment through the system were manipulated by adding zeroes on all the transactions, resulting in the theft of close to a billion shillings.

Treasury however argued that Ifmis has become a critical tool in public finance management in terms of budgeting, expenditure control, processing transaction and financial report.

“In addition where there are allegations of fraud and mismanagement of public funds the system provides critical information to aid investigation,” added Treasury.

“It should be noted that systems are operated by people and therefore the efficiency of the system depends of the integrity of the users.”

In February, the Treasury appeared to admit that Ifmis is faulty when it noted that the software will undergo review and improvement on recommendation by experts.

The system was installed to improve accountability in the management of public finance by former Devolution Cabinet Secretary Anne Waiguru when she was at the Treasury.

We are also looking at risk management on the system and here, we are looking at possibly having triggers in place so that fraud can be detected before any funds are lost.

This will be in addition to the audit trails already in place,” said Dr Kamau Thugge, principal secretary, National Treasury in February.

IMPLEMENT REPORT

He said then the government will also be keen to implement the auditor general’s report on the software.

Events surrounding the corruption claims saw Ms Waiguru resign from office as Devolution Secretary.

Other senior State officials and 26 individuals are currently in court over the theft.

They include former Principal Secretary for Planning Engineer Peter Mangiti who lost his job after being implicated in an attempted cover up of the fraudulent transactions.

In the NYS saga, one of the three companies associated with Ms Josephine Kabura Irungu, Form Home Builders, was to be paid Sh15.4 million according to the local purchase orders at the NYS.
But that amount later leaped to Sh154.9 million when it was keyed into the Ifmis system.

In light of the wide variance between the amounts keyed in through Ifmis and the amounts stated in the local purchase orders at the NYS, Sh791 million is now believed to have been stolen.

The system has also been on the spotlight, with governors protesting against demands by the Treasury to acquire goods and services through it, saying the software is cumbersome and they do not have infrastructure to implement it.

Dr Thugge said at the time the National Treasury was also looking to add new modules on Ifmis that would include debt and pension management, which were expected to enhance the management of public finances.

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