Good system with bad managers is the country’s biggest challenge
DAILY NATION By KENNETH OKWAROH
Monday November 28, 2016
I once wrote a case study report for Kenya on the status of the Global Partnership for Effective Development Cooperation in 2014. Part of my report lauded the government for significant progress in establishing systems to facilitate effective management of public money.
My research team was optimistic that with such reforms as the enactment of the Public Finance Management Act 2012, the operationalisation of the Integrated Financial Management Information System (Ifmis), review of procurement regulations, among a raft of many other finance sector policy reforms, Kenya was on track towards better handling of public finance.
We, however, cautioned that the systems still appeared weak and with loopholes that could be exploited by corrupt public officers. Nonetheless, we ended our report with an optimistic credit and faith that the people of Kenya and their government would continue to do the right thing.
It is, therefore, heartbreaking to consider the wave of reports of impropriety and outright theft that has apparently been going on in many government institutions both at national and county levels involving obscene amounts of money misallocated, misapplied or plainly stolen.
Reports from the Office of the Auditor-General and Controller of Budget and other informal audits by the media and civil society provide accounts of a machinery of kleptocracy driven by a cabal of government officers colluding with thieves to deprive Kenyans of hard earned tax money.
What is becoming increasingly difficult to separate from these reports is the mention of the word Ifmis and how it is being exploited and leveraged to facilitate the stealing. It is a shame that what was intended to do good and to take Kenya to a higher realm in public finance management has turned out to be itself synonymous with even more depressing realities of bad practices in the management of Kenya’s public finances.
Ifmis was touted as this unbeatable money fortress that would make it difficult for state officers to loot public resources.
So what happened? How did we get to this unfortunate circumstance where a progressive innovation became a facilitator of even worse violations of public finance management laws and standards? Did we perhaps overestimate and overstate what we could achieve from Ifmis? Or are we just being true to ourselves – Kenyans, the peculiar beings with that unique ability to always find ways to squander opportunities to improve our circumstances like we have always done with every progressive legislation or policy?
Foremost, I must admit that issues of public finance are fairly complex for many ordinary citizens, and will always be challenging to follow.
So for those wondering what on God’s earth is Ifmis, we could begin here. That Ifmis, simply put, is a set of technology driven solutions aimed at enabling government to effectively plan, execute and monitor the public budget through a centralised platform that allows reliable recording and reporting of financial transactions by government officers on a real time basis.
Globally, where it has worked, Ifmis has allowed government to comply with domestic and international financial regulations and standards. It has enabled countries to improve budget planning and expenditure control, through reduction of government accounts. It has also increased participation, transparency and government accountability by providing public finance information that is shared on open data platforms for example.
Notably, Ifmis was a World Bank initiative for providing digital solutions to public finance management. To date, the World Bank has helped over 84 countries globally to set up integrated financial management systems spending over $1.5 billion.
For Kenya, this began way back in 2003, though then existing as a narrower component, but expanded to what we now call Ifmis rolled out in all 47 counties in 2013.
The World Bank acknowledges, however, that it has not been all rosy and that despite notable progress in some countries — some anecdotal, others significant — there have been substantive challenges that must be dealt with for it to succeed in more places in the future.
Such challenges include the fact that Ifmis has made public finance management more complex to follow and as such it has reduced, in many instances, rather than increase political accountability. It is something we are experiencing in Kenya. Also that it has faced palpable resistance and negative attitudes from government for denying avenues for impropriety and because of its ICT orientation that many bureaucracies in developing countries do not like.
In Africa, just a handful of countries have demonstrated effective operationalisation of Ifmis and some significant returns in terms of improvement in public finance management. Such countries as Zambia, the Gambia, Tanzania, Madagascar and Morocco are said to be reaping benefits from it.
Where we are today, multiple reports have been made illustrating elaborate ways through which Ifmis can be compromised, broken into, illegally accessed and all manner of fraudulent transactions executed that have lost the public colossal amounts of resources.
Kenyans are thus justified to be angry about this and in order in their demands for a probe into the integrity of Ifmis. Whilst it was meant to open things up and increase efficiency, procurement processes remain opaque and shrouded in mystery and dark under-dealings.
If you asked me, three main things have brought us to the circumstances we are in with Ifmis today and they are not necessarily incurable. One, there are capacity challenges among government officers that limit full use of Ifmis.
This allows for a select few officers to be able to run the system and as such leaving it prone to manipulation, especially by senior duty bearers. Two, change management in the public sector requires a lot of political will. Ifmis, just like any other public policy, needed significant backing from the country’s political class to succeed. From what we are witnessing, it is clear that it has not seen that yet and as such will continue to under-perform.
CULTURE OF IMPUNITY
Lastly, we have assumed a culture of impunity in Kenya that not a system, not a law or policy will succeed in dealing with. If people are bent on corrupting and unduly benefiting from public coffers, they will go to great lengths to do so. And, for as long as we encourage and crown and cheer those who do so, we will not go far. Our values as a nation need much more work.
In sum, IFMIS is not necessarily a scourge in our public management framework but an enabler that has been beaten by bad people who are exploiting loopholes and challenges in the system that every other innovation normally faces.
Perhaps we also set ourselves up for failure by over-relying on it to sort out the problems in public finance management without supporting systems, policy and alternative accountability mechanisms that are equally effective.
There is space for improvement. That is why I believe that the debate on Ifmis and the fact that the system can still be used to trace back to public officers involved in malpractices is a good thing. The calls for abandonment of Ifmis altogether or blanket condemnation and vilification of it may not be the smartest thing to do. Let us not throw away the baby with the bath water.
There are significant gains that we have netted with the use of Ifmis that we must not allow ourselves to lose because of our anger at the failure of elements of the system.
Ultimately, for Ifmis to succeed, we must regard it as part of broader plans to improve public finance management in Kenya. It must be treated as a component of a broad range of reforms that must come with more political will and stronger oversight.