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Fears of fraud as new accounting system comes under scrutiny

By BY JAMES ANYANZWA | November 13th 2013


NAIROBI, KENYA: The Office of the Controller of Budget has commissioned a probe into the operations of the Government’s Integrated Financial Management Information System (IFMIS) on a possible case of fraud.

IFMIS was introduced to help automate procurement processes and seal all loopholes through which State officers steal public funds.

But the Controller of Budget Agnes Odhiambo yesterday revealed that the system has proved to be unreliable owing to a huge discrepancy between the data it generates and that obtained from the manual books.

Human error

Ms Odhiambo said the Auditor General would carry out a total review of the system to establish whether the discrepancy in data generated from the system is due to human error or fraud.

“There is a difference between the information coming from IFMIS and the information from the manual books,” Odhiambo told the Budget and Appropriation committee.

“There is a huge difference between data from IFMIS and data from manual books,” she said.

Ms Odhiambo also pointed out that there is inadequate infrastructure and corresponding human capacity to operationalise the IFMIS and G-Pay systems to track expenditure at the county level.

“We have made a request for the review of this system and the Auditor General has undertaken to cary it out,” she said.

“From there we shall know exactly what is causing the problem.”

According to Ms Odhiambo, IFMIS has been fully operationalised in all Ministries, Agencies and Departments (MDAs) at the national level but there still exist challenges on the capacity of the users.

As a result, she said her office could not produce reports on time if they rely on IFMIS.

Odhiambo also noted that there are some errors, which appear to be associated with the users of the system.

“This is likely to result in inaccurate reporting of the financial position of the respective spending entities due to incomplete data capture,” she said.

The Directorate of IFMIS has established an IFMIS Academy at the Kenya School of Government to train more users of the system at the national and county levels.

Already, the ministry of Finance has connected MDAs and all 47 county governments to the IFMIS in line with the Constitution and the Public Finance Management (PFM) Act 2012.

It is, however, the shortage of skills especially in counties on how the system works that is limiting the system’s adoption and application through all Government operations and across departments.

“There is need to train and deploy more skilled people at the counties to ensure the system is used across all government departments and levels,” she said.

The State watchdog said recently that a number of counties were experiencing hard times due to lack of capacity.

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