Anti-graft war will be more effective with strengthened financial systems

By nominating Mr Philip Kinisu as the new head of the Ethics and Anti-Corruption Commission, President Uhuru Kenyatta has brought experience, knowledge, stature, and calibre to the helm of this key institution.

Mr Kinisu is one of the continent’s top accountants.

He was Africa’s head of PricewaterhouseCoopers, the largest professional services firm in the world.

Mr Kinisu’s appointment has demonstrated that if you insist on appointing the best international professionals to public positions, you will get the calibre right here in this country.

Discerning observers in foreign countries where Kenyans work and prosper wonder how a country with such a wealth of talent manages to remain so poor.

We are not poor by nature, but by policy.

HUMAN CAPITAL

This country has some of the sharpest financial brains in the world.

Yet one of the reasons corruption thrives in the public sector is weak financial systems and controls.

We forget that fighting corruption is not just about taking people to jail.

Even if you left the running of the Cabinet and ministries to a committee of archangels, you would not eliminate corruption. You are likely to get more mileage by strengthening your integrity systems — including auditing, procurement, investigation, judiciary, the Office of the Ombudsman, and parliamentary oversight committees.

IMPROVED FINANCIAL MANAGEMENT SYSTEMS

In my view, Mr Kinisu can make a big impact if he influences the transition to a new and improved public financial management system in the public sector.

That is the least one would ask of one of Africa’s top accountants.

If he approaches his assignment as if the key thing to do is to fill jails with corrupt public officials, he will find himself tied up in knots by both the Directorate of Public Prosecutions and the Judiciary and sooner or later, the public will start shouting about how he is not frying enough big fish.

I want to suggest to Mr Kinisu that transition to a strong financial management and control system must begin with a complete overhaul of the Integrated Financial Management System.

What the government needs is robust computerised accounting and auditing systems, the equivalent of core systems used by banks which are truly integrated and lead you straight into what accountants call a general ledger.

It is the only way to give ministries the capability to do regular financial reporting and publish financial results, as happens in countries such as South Africa.

If the top accountant manages to sort out public financial management, he will have reduced corruption by 50 per cent.

BUDGET OFFICE

I also support President Kenyatta’s proposal to introduce the office of management of budget (OMB) in his office.

In presidential systems such as the United States, budget-making is the responsibility of the CEO of the country.

This way, you avoid a situation where one ministry (the National Treasury) does budgetary allocations for itself and other ministries, implements them, and is in charge of financial management.

I think that all departments with responsibilities that cut across all ministries such as ICT and procurement should all be domiciled at the OMB.

President Kenyatta also touched on procurement, arguing that the government must buy goods and services at market price. I do not agree. In my view, the government — the biggest consumer of goods and services in the economy — should leverage on economies of scale to procure goods below market price.

We need to go back to procuring common goods and services through one agency, as happens in the US under General Administration Services.

We had a similar system before when common user services were procured by the Supplies Branch Department under the Ministry of Works. The system collapsed due to corruption.

With the exit of Ms Anne Waiguru, the President should now create a separate Ministry of Planning.

Under her regime, critical institutions such as the Kenya National Bureau of Statistics, the Kenya Institute of Public Policy Research and Analysis, the National Council of Economic Advisers, and the Vision 2030 Secretariat were accorded inadequate attention, with  the focus being on the departments with large budgets such as the National Youth Service, the Uwezo Fund, the Youth Fund, and the Women Enterprise Fund.