STRENGTHENING GOVERNMENT FINANCE & ACCOUNTING FUNCTIONS-

KENYA

Financial Problems

• Poor Control – Overspending• Unrealistic Budgets – Revenue & Expenditure• Focus on inputs rather than outputs• Growing Pending Bills Problem• Spending Not Aligned to Priorities…. Poverty, etc.• Fraud, Corruption Lack of Transparency & Good

Governance• Poor Management of transactions/documents• Lack of effective auditability• Procurement – Poor Value for Money• And many more leading to poor delivery of Public

Services

System Problems

• Fragmented PC Systems and Mainframe System• Duplication of Data Capture• Information Locked Away in Systems• Lack of Real Flexible Reporting – Lack of Analysis• Limited Support to Operations• Use of Runners to Collect Data Diskettes• No One Overall System….• Need for Truly INTEGRATED SYSTEM• And many more………

IFMISOracle FinancialsBest Practice

Business Project - NOT IT Project

New ProcessesNew proceduresIPSASEffective ControlsModernEfficient

Staff DevelopmentTrainingProfessionalism of CadreOrganisational Alignment

New Schemes of Service

Project Structure

UPDATED LEGISLATION

IFMIS Enabling New Procedures And Processes

Driving NewChanging RolesNew Skills sets

Effective Financial Management

Tighter Controls & Strong Audit Trails

Improved Resource Allocations

Overspending Curtailed

Improved Revenue/AIAManagement

Platform for MTEF

Transparency on Procurement

Fraud Detection& Deterrence

Timely reliable informationEIS for Senior ManagersTRANSPARENCY COMPLIANCEACCOUNTABILITYGOVERNANCE

REVISED REGULATIONS

IFMIS Project - Status• Software:

– Contract for Oracle Financials Mobilised Jan’03

– Oracle Financials – Leading ERP Package

– Horizontal Implementation – 5 Core Modules Initially…

– To All Ministries and Districts

– Purchasing, Accounts Payable, General Ledger,

– Cash Management and Public Sector Budgeting

• Consolidation Platform for Future Modules

IFMIS Project - Status

• Data Centre Established:

– 1 Training Development Server

– 2 (Clustered) Production Servers

• PCs to Ministries/Districts - Ongoing

• Also Ultra Thin Client Dumb Terminals

• Future Plans for Disaster Recovery Site

• Networking & Connectivity – Ongoing

• IFMIS Operations & Training Room Set Up

• GOK Implementation Team (25) Fully Trained up

IFMIS Project - Status

• Configuration & Piloting Completed

• Roll Out to Ministries Ongoing to May ‘05

• Roll Out to Districts to be completed July ‘05

• Planning to Roll Out to 300 Users

• Next Phases: 500-1,000 Users & Other Modules

IPPD

Public Sector Planning & BudgetingMTEFFinancial ModellingBudgetary ControlOutput basedPrioritised ObjectivesDissemination to Districts

Purchasing & APControl at Commitment& pre Commitment

RFQs, orders, invoices,Payments, etc.

Transactions part of System process

IFMIS Modules

Implement Activities/Progs

Procure Goods& Services

Budget Monitoring Reporting & FeedbackFinancial, physicaland process, etc.

General LedgerCash ManagementFinancial ManagementExpenditure ControlCash Flow M’gementCompliance, TransparencyOnline access to InformationAudit controls

Linkages/InterfacesWith Other Systems

Revised PrioritiesRevised ActivitiesRevised Resource Allocations

Public Debt

Activities, Programmes, Outputs, Impact

OtherSystems

KRA, CBK, etc.

Invitation To TenderRequest for Quotes

Quotations & Tenders

EvaluationDetails &

EvaluationReport

LPO & LSO

Purchase Orders

FULL AUDIT TRAIL THROUGHOUT WHOLE PROCESS

Award ofContract

Attached Against Order

Suppliers’Invoices

Receive GoodsServices Cheque

Payment

Bank Statement

Cheque Cleared

Bank Rec

All details entered in system. Approvals at each stage, including MTC. Procurement method validatedAgainst thresholds & regulations

Evaluation Reports, Contracts and other important documents available online

System VisionOne Financial System

For All Stakeholder NeedsMinicomputer

Central System

FMADIBM Compatible

BSDIBM Compatible

ERDIBM Compatible

MinistriesIBM Compatible

DistrictsIBM Compatible

RCSIBM Compatible Planning

IBM Compatible

Debt Management

IBM Compatible

Audit (& Anti-Corruption)

IBM Compatible

AGDIBM Compatible

Procurement Dept

IBM Compatible

Revenue Management

IBM Compatible

DonorsIBM Compatible Other Policy

Makers

IBM Compatible

Oracle Financials - Modules• Phased (Horizontal) Implementation• Future - Widening Vertical Implementation• Other Modules?

– E-Procurement– Asset Management, Estate Management, Fleet Management– Plant & Equipment Management– Human Resource Management – Treasury Management– Inventory – Accounts Receivable & Revenue Management– E-Government

IFMIS PLATFORM UPON WHICH GOK CAN CONSOLIDATE ALL ITS APPLICATIONS

CashManagement

Reporting and Analysis Thro’ Reporting tools

General Ledger

Core Accounting& Reporting

General Ledger

Core Accounting& Reporting

Purchasing

AccountsPayable

Public SectorBudgeting

Reporting Tools

Inventory

FleetManagement

Asset Management

E-Procurement

AccountsReceivable

TreasuryManagement HRMS &

Payroll

Challenges & Issues

• Changing Attitudes – Getting Buy In

• Numbers of People to Be Trained

• Infrastructure

• Resistance to Change

• Disaster Recovery

• Funding

• Capacity for Implementation & Support

• Retention/Reward of Trained Staff

• Engagement of ALL Stakeholders

Challenges & Issues

• Other Reform Initiatives

• Lengthy (Government) Procurement

• Getting Top (Political) Level Support

Other Issues

• “Not Just an Accounting System……”

• Full/Total Resource Management

• Role For Wider Stakeholder Group Needs to be

Understood

Other Issues

• Strategic Visioning

• IFMIS Needs to be Priority

• Looking Forward to Future Not Past (Firefighting)…..

• IFMIS - Hard Work, Huge Management Effort

• But all Work Throughout Budget Cycle Easier in

IFMIS

• IFMIS - Enabler for Effective Working – Easier in

Long Run

• Steering Committee Vital Role to Ensure IFMIS Meets

All Stakeholder Needs

Other Issues

• Commitment, Ownership & Participation

• Continuity of Right People in the Teams

• Institutional Linkages/Arrangements

• Strong Communications to All Levels

Benefits

• To All:

• Users of System

• Service Delivery Officers

• All Stakeholders & Managers

• All Civil Servants

• Kenyan Citizens

Benefits• Strong Audit Trails (for all Financial Transactions)

• Visibility of all Transactions…leading to TRANSPARENCY

• Secure, Robust and Reliable Systems

• Best Practice

• Full Expenditure Control at Commitment Level

• Improved Revenue Analyses…Targets, Trends, Improved Revenue Management

• Management, Analysis and Control of Pending Bills

• Treasury Management, Issuing and Redemption of T’ Bills

Benefits• Support to Procurement Reforms and Effective

Procurement• Support to MTEF – Costing Activities• Fully Integrated System – More Efficient and Effective• High levels of automation - Bank Recs, Expenditure

Returns • Linkages and Information Sharing with Other Systems• Flexible Information, Analysis & Reporting – Financial

and Process• TRANSPARENCY, ACCOUNTABILITY,

COMPLIANCE GOOD GOVERNANCE

Benefits• Value For Money, Effective Procurement

• ….More Resources Available

• More effective utilisation of funds

• Spending Aligned to Priorities & Policies

• Eliminate Un-authorised/Over spending

• Reduction of Pending Bills

• Effective Flow of Funds.. Districts

• Improved Delivery of Public Services

• Reduced Poverty

• Lives Saved