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Economy

MPs question ability of State IT payment system to curb theft

Insiders at the Planning ministry beached the government-based IT payment system and generated payments to fake suppliers. PHOTO | FILE
Insiders at the Planning ministry beached the government-based IT payment system and generated payments to fake suppliers. PHOTO | FILE 

The capacity of the Treasury to monitor, detect and deter theft of public funds through the government-based IT payment system was questioned after Parliament learnt it cannot flag suspicious expenditure similar to the National Youth Service (NYS) scam.

MPs put Integrated Financial Management Information System (IFMIS) director Jerome Ochieng on the spot regarding the theft of Sh791 million at the NYS that was made through the system.

Parliament learnt that IFMIS has no role in ascertaining payments made through the system.

IFMIS is a computer system that processes procurement and payment of goods and services bought by the government.

The NYS scam, where nearly Sh1.8 billion was lost, exposed its vulnerability.

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The Public Accounts Committee (PAC) grilled Mr Ochieng who distanced his directorate from the theft of the money at the NYS.

Insiders at the Planning ministry beached the government-based IT payment system and generated payments to fake suppliers.

“We are not responsible with the payments that happen at the various ministries including the Treasury, departments and agencies of government,” he said.

“Our responsibility is to ensure that the system is up since we do the maintenance part. It is the responsibility of MDAs (ministries, departments and government agencies) to conduct due diligence on the companies and suppliers they give us to upload in the system which is centralised at the Treasury.”

Mr Ochieng said the responsibility of IFMIS department is to upload the national budget into the system and ensure that the system is up and running.

“Once we upload the budget, respective spending agencies starts accessing the budget votes. We help MDAs to define suppliers in the IFMIS system for payments.

Mr Ochieng was responding to a special audit report, which blamed the IFMIS directorate for creating four companies linked to the theft of Sh791 million.

The firms linked to Josephine Kabura, the business woman at the centre of the scandal, are Form Homes Builders, Reinforced Concrete Technologies and Roof and All Trading that acted as suppliers of the NYS.

A total of Sh218 million was irregularly paid to Form Homes Builders, five months before it was registered as a company and the other two received money two months after they were registered.

Auditor General Edward Ouko tabled the special audit in which he said up to Sh1.8 billion was lost at the NYS scandal.

The scandal saw the resignation of Devolution secretary Anne Waiguru and her PS Peter Mangiti. Mr Mangiti has since been charged alongside former NYS director Nelson Githinji.

The IFMIS director was hard pressed to explain how a junior officer was allowed to define suppliers for NYS where four out of 10 firms that were to be put in the system are involved in the Sh971 million theft.

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