Ideas & Debate

How IFMIS turned out to have multiple defects

WEAK

Interfacing with other systems was rated as weak. PHOTO | FOTOSEARCH

It is time for Kenya to learn that modernisation is not reform. That “tech-everything” isn’t enough. Auditor-General Eddie Ouko has said, as recently as a Press Editors’ Guild luncheon, that we must split IFMIS into IFMIS I for national government, and IFMIS II for county governments.

IFMIS is Kenya’s Integrated Financial Management Information System, effectively the technology tool through which government runs our national finances, from planning through budgeting to procurement, payment, accounting and reporting. It helps in reporting by our Controller of Budget (CoB) to Kenyans - quarterly and annually – on how and on what our tax resources are spent nationally and in the counties. It forms one input into the Auditor-General’s own annual review and audit of these accounts.

The auditor’s sentiments make sense. As he says, there’s too much central control over IFMIS. Buttons can and are being pressed (or not) in Nairobi that affect a county’s finances. It is also well known that county finance officers are regular visitors to the National Treasury, pleading for budgets to be “uploaded” and funds to be “released.” This was not devolution’s intent. However, this is Kenya – 48 governments and one nation – many fiscals, one economy. So, what to do?

The auditor’s argument raises two important perspectives. One, did we devolve a “computerised mess”? Or, two, did we initially “computerise a mess”? Let’s start with the first question.

After the 2014 to 2017 public finance scandals widely blamed on IFMIS, the Auditor was in 2016 tasked with performing an “effectiveness review” of the hitherto highly regarded system.

His wide ranging report celebrated gains made in the development of IFMIS, in its 2010-2014 “re-engineering” phase, particularly in full rollout to ministries, departments, agencies (MDAs) and counties (a subject loudly celebrated in the Jubilee Administration’s 2017 electoral list of achievements).

Yet, this 2016 review also found a system rated highly ineffective in terms of configuration (set-up) and utility for key processes - Plan to Budget, Procure to Pay, Revenue to Cash, Record to Report, plus Interfaces (integration with other government systems), Infrastructure and Training. This is important because the “re-engineering effort” was predicated on an “end-to-end, not modular” approach.

As a simple analogy, if IFMIS was a mobile phone that a Kenyan had bought, the auditor’s report suggested that less than half of its promised features had been installed, and many weren’t that fit for purpose.

For Sh6 billion and 18 contracts thus far, the results looked poor, yet Sh6 billion was still planned. One example helps. Within the first Sh6 billion, two firms were awarded a similar contract.

One firm was contracted for $1 million to launch and integrate new IFMIS modules, a second got the same work for $15 million. The report notes that the latter submitted an $9 million invoice to government (ICTA – ICT Authority) without a name, signature or stamp. Apparently this was processed and paid.

The auditor’s report then noted that while “vendor payment performance” was at 90-100 percent (everything paid), actual benefits and usefulness of work scored between five and 40 per cent.

And, while adoption among users (government staff) was one in five (22 per cent), adoption by the system owner was 0.09 per cent (that is, 99.01 per cent of the National Treasury people preferred “the manual way”).

In an eerily “IEBC-like” scenario, it was further observed that no needs assessments were performed on network infrastructure and bandwidth outside Nairobi, and user equipment (hardware). Inadequate work was done on business continuity, data recovery and data centre controls.

Procedures weren’t in place for password approval or expiry, users could be duplicated, data encryption from remote access sites did not happen and both software patch (updates) and anti-virus processes didn’t exist. The system couldn’t produce 10 of the 12 financial statements required by law at the time. It’s not clear if this was fixed, or this was pretty much the IFMIS that was “rolled out” to counties.

Interfacing with other systems was rated, as noted above, as weak. This was based on the following possible linkages. IFMIS, CBK, KRA, Hyperion (our budget input system), the Debt Management System (CS-DRMS), payroll (IPPD - more of this below) and e-PROMIS (a system created to track donor projects). The initial answer should have been to correct IFMIS first, and make sure it’s fixed, then integrate it.

It gets more interesting. Traditional government is about “pay and rations,” a bit for your work and resources you work with. Today, simply, we separate public spending into personnel emoluments (PE), operations and maintenance (O&M), which together form recurrent expenditure, and development.

Let’s look at the emoluments, and where the Auditor has his first trouble, but also in light of our renewed wage bill debate.As a report released this month by the SRC (“Wage Bill Study”) tells us, we continue to maintain multiple HR systems. The Integrated Personnel and Payroll Database (IPPD) is where your pay is processed, and then paid through IFMIS. Another system, GHRIS (Government Human Resource Information System) manages your leave.

It is not wrong to think that a belief in systems and technology has masked the fiscal indiscipline that the Auditor has observed, but cannot tie down without being able to fully interrogate all of these systems. We devolved a “computerised mess.”