Financial operations software is faulty, Treasury now admits

The National Treasury has admitted that the software currently being used to run the country’s financial system is faulty.

Thursday February 4 2016

Former Devolution and Planning Principal Secretary Peter Mangiti addresses journalists at the Treasury office in Nairobi on November 9, 2015. He was dismissed over fraudulent IFMIS transactions. The National Treasury now admits that the IFMIS software currently being used to run the country’s financial system is faulty. PHOTO | GERALD ANDERSON | NATION MEDIA GROUP

Former Devolution and Planning Principal Secretary Peter Mangiti addresses journalists at the Treasury office in Nairobi on November 9, 2015. He was dismissed over fraudulent IFMIS transactions. The National Treasury now admits that the IFMIS software currently being used to run the country’s financial system is faulty. PHOTO | GERALD ANDERSON | NATION MEDIA GROUP 

By BRIAN NGUGI
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The National Treasury on Wednesday admitted that the software currently being used to run the country’s financial system is faulty.

The Integrated Financial Management Information System (Ifmis), 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.

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

CENTRE OF CONTROVERSY

Ifmis has been at the centre of corruption claims in some of the largest graft syndicates to hit Kenya in recent months.

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.

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.

NYS SAGA

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, Sh712 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.

on Wednesday, Dr Thugge said the auditor-general has been looking into the software and will soon be making recommendations.

“We had asked for an audit because we want to see how the system is operating and also point out areas of improvement.

The auditor-general is almost finished with the report and we will look at it and take on board their recommendations,” he said.

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

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