How IFMIS prevented theft of NYS funds

By / Published June 25, 2015 | 3:33 pm

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 Sh 826 million belonging to the National Youth Service (NYS).

The Integrated Financial Information Management System (IFMIS) has come under heavy criticism and scrutiny, with an outright dismissal of the system.

The dirt that has been thrown at the system, is a classic case of shooting the messenger that comes bearing the bad news.

From the onset, as per what is available publicly, it is clear that the alleged ills at NYS were brought to light by the system. It was the system that initially raised a red flag about the suspicious transaction that entailed over 30 transactions of different amounts the largest being Sh54 million. The transactions were stopped and the NYS did not lose any money.

Further, after the alarm raised by IFMIS, the Ministry of Devolution and Planning, which houses NYS, was able to request 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 that the system is credible and is playing a central role in increasing 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.

We could also look at the whole scenario from another angle. What would have happened assuming NYS was using the manual procurement system?

The simple and true answer to this is that the entire Sh826 million would have been lost and it would have taken us months, even years, to figure out that any money was lost.

And assuming that the country was lucky enough to notice the missing hundreds of millions, it would be another tall order figuring out who okayed the transaction and who the money was paid out to.

In the olden days of manual procurement, billions were lost and even to date, we do not even have an inkling as to how much Kenya lost or even who pocketed the money.

IFMIS has heralded an era where shredding and burning of files to hide evidence or brief case companies being paid billions and not delivering will not fly anymore.