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IFMIS is not to blame for NYS fiasco

By Ismael Kulubi | June 28th 2015

The media has in the recent past been awash with reports on how the automated public financial management system (IFMIS) did not stop the presumed theft of Sh826 million belonging to the National Youth Service (NYS).

The Integrated Financial Information Management System (IFMIS) has come under heavy criticism and scrutiny, with sceptics and naysayers dismissing the system.

The dirt thrown at the system is a classic case of shooting the messenger bearing the bad news. From the onset, it is clear that the alleged ills at NYS were brought to light by IFMIS. It is IFMIS that initially raised the red flag about the suspicious transaction that consisted of more than 30 transactions of different amounts — the largest being Sh54 million. The transactions were stopped hence NYS did not lose any money.

Furthermore, after IFMIS raised the alarm, the Ministry of Devolution and Planning, which houses NYS, requested the Cyber Crime Unit at the Directorate of Criminal Investigations Department (DCI) to investigate the issue. As with any other automated system, the users that had tried to make the suspicious transaction left trails that cannot be erased.

Having had the benefit of seeing the IFMIS printouts that are doing rounds, the audit trails are clear with names of both users and suppliers behind the suspicious transactions. These are already being followed up and with the developments at the Director of Public Prosecutions (DPPs’), they are certainly going to be tasked to account.

Again having had a look at the system printouts as well as other documents that are in the public domain, the IFMIS e-procurement platform has a 24-step approval process. The entire process requires the approval of six officials for a transaction to go through. These particular transactions had only gone through two steps before the system raised the alarm about the unusually many commitments that had been made totalling to Sh826 million in two days.

The fact that this was caught at the second step means the system is credible and is playing a central role in ensuring accountability and transparency in the management of funds in the country. The bottom-line is that NYS did not lose any money as these were just commitments made on the system and would have had to go through the 24-step process as well as the six approval levels. Conversely, the 60-million dollar question is this: “What would have happened had NYS been using the manual procurement system?”

The crux of the matter is that the entire Sh826 million would have been lost and it would have been hell of a task tracing the money. That is the truth of the matter. And assuming that the Ministry had been lucky enough to notice the missing hundreds of millions, it would be a Herculean task figuring out who okayed the transaction and who the money was paid out to.

In the old days of manual procurement, billion of shillings were lost and hitherto, we do not even have an inkling as to how much Kenya lost or whose pockets the money disappeared to. IFMIS has heralded an era where shredding and burning of files to hide evidence or briefcase companies being paid billions and not delivering will not fly anymore.

—Ismael Kulubi comments on governance issues

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