Clearly, counties are yet to put their financial management systems in order. That is the picture you get going through the just published reports by the Auditor-General.
Internal audit systems are just not working. Neither are procurement systems and processes working sufficiently. We have seen several cases where governors have been involved in malfeasance and where public procurement systems have been blatantly breached.
But the fact that the financial irregularities reported by the Auditor-General in the accounts are widespread across counties point to a systemic problem.
I blame it all on institutional failure: the fact that the National Treasury has not been effective at exercising its powers under the Public Finance Management Act.
We must not forget that both the Constitution and the Public Finance Management Act give the National Treasury wide-ranging oversight powers in the management of finances of the country.
The National Treasury still retains the powers to issue guidelines and to order spending freezes across both the national government departments and counties.
In my view, the National Treasury should be taking a more proactive role in providing counties with capacity to execute public financial management laws and regulations.
And, from what is coming out from the reports of the Auditor-General the core computerised system for managing finances, Integrated Financial Management System (IFMIS) is simply not working.
Today, every county will tell you that they are on IFMIS. But how robust is the system and how has it helped in managing finances.
Methinks that IFMIS has not been made robust enough to meet the goals of the Public Financial Management Act.
I claim no authority in matters ICT. But what do you say of a core financial system which does not capture data on wages? Mark you, wages eat up nearly 50 per cent of recurrent expenditure.
Yet national and county government payroll systems run on a completely different system. If IFMIS was robust enough, ministries and counties should be able to publish their accounts within three months of year end.
As things stand, external audits by the Auditor-General cannot possibly to a thorough job. As they say, an auditor is as good as the system he is auditing. Right now, the systems are shambolic.
The way the public sector has expanded, we need robust core systems capable of producing data to the external auditors to apply computer-assisted audit techniques.
If Makueni County is spending millions in building three latrines, IFMIS should automatically stop the payment.
If the existing financial system was working and properly integrated, the government would be having data on all prices of goods and services procured across ministries.
Were IFMIS functioning robustly, the system would support the case of a single agency to procure all common user items like stationary, car tyres, motor vehicles, and computers.
In the past, when the public service was smaller, common user services were procured for all ministries by one agency — the
Supplies Branch still exists. But the system of procuring common user items from a central point collapsed several years ago.
In places like the
I have digressed. My point is that the National Treasury must start reasserting itself in the public financial management space.
What we are witnessing right now is a Tower of Babel, where multiple institutions — the
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