Auditor General Nancy Gathungu exposes IFMIS failures, Sh10.2 billion unapproved government spending
Auditor General Nancy Gathungu said the system has led to the loss of public funds through irregular transactions and the expenditure of over Sh10.2 billion without parliamentary approval.
The government’s Integrated Financial Management Information System (IFMIS) has failed to deliver on its core mandate of ensuring transparency and accountability in public spending, Auditor General Nancy Gathungu has revealed.
Gathungu said the system has led to the loss of public funds through irregular transactions and the expenditure of over Sh10.2 billion without parliamentary approval.
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In her 2023/24 report on the national government, Gathungu said the system, initially rolled out to enhance the accuracy, reliability, and timeliness of public financial data, has not achieved its intended objectives due to several critical inadequacies.
“The benefits expected from the deployment of IFMIS have not been realised due to inadequacies of the system,” reads the report.
A review of transactions recorded in IFMIS revealed multiple instances where transactions were cancelled, but no evidence was presented to confirm whether those cancellations were authorised.
Further, the Auditor General noted discrepancies between payments processed through IFMIS and entries in official financial statements. Some payments recorded in the system were missing in the statements, while others listed in the statements had not been posted in IFMIS.
“Override of internal controls was noted where an account was created in IFMIS under an individual’s name, which occasioned loss of funds, an indication that the internal controls in IFMIS were not effective,” reads the report.
Gathungu also flagged inconsistencies between balances reflected in financial statements or ledgers and those shown in IFMIS supporting schedules, raising further concerns about data accuracy and system reliability.
Beyond the system failures, the audit revealed that a total of Sh10.2 billion was spent without parliamentary approval, in contravention of Article 223 of the Constitution. This includes Sh4 billion used for the maize flour subsidy programme and Sh6.2 billion spent on the acquisition of Telkom Kenya shares.
“There are no guidelines in place on how unapproved withdrawals from the Consolidated Fund under Article 223 should be dealt with,” reads the report.
In light of the gaps, the Auditor General called for amendments to the Public Finance Management Act, 2012, to introduce legal provisions that define the steps to be taken when such expenditures fail to secure National Assembly approval.
“The Public Finance Management Act, 2012 should therefore be amended to provide guidelines on the actions to be taken where expenditure incurred under Article 223 is not approved by the National Assembly,” Gathungu said.
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