New financial management system to replace IFMIS by July 2025

The National Treasury plans to introduce a new integrated financial management system for both county and national governments by July next year.

National Treasury Cabinet Secretary John Mbadi announced that the development of this system is currently 40 per cent complete.

The new system aims to curb the annual loss of billions of shillings due to inefficiencies in existing financial management frameworks.

Mbadi explained that the new system will consolidate all government financial management systems into one streamlined platform.

"My ministry is in the front line of reviewing Ifmis as a whole to ensure that we have an integrated financial management system that would capture all the data so that by the click of the button, you can have a complete view of what is happening," he said.

The Cabinet Secretary pointed out the urgency of completing the remaining 60 per cent of development to meet the targeted rollout by the end of the current fiscal year.

Not kept up with developments

He acknowledged that while IFMIS was initially intended to unify various financial systems, it has not kept up with recent developments.

"The system has some failures or weaknesses which must be dealt with. So, we are looking at integrating our systems to have one where you can have a clear view of transactions," Mbadi added.

Kisii Senator Richard Onyonka expressed concern about inconsistencies in the various financial systems employed by the government.

He questioned whether the government intends to establish a simple financial system that interfaces with county governments, the national government, and all relevant departments.

This would allow for greater transparency in how taxpayers' money is spent.

"Do you intend to have such a system so that we can reduce the mismanagement or abuse that has been taking place using the system?"Onyoka posed.

The Treasury boss agreed that excessive interfaces between officials and systems have created opportunities for rent-seeking behaviour among those involved.

Vihiga Senator Godfrey Osotsi pointed out that the Controller of Budget, Margaret Nyakang'o, has been advocating for an end-to-end Ifmis solution to better monitor payments, but these efforts have not yet been successful.

The Cabinet Secretary also revealed plans to automate pension management through a new information system, which will integrate with the payroll of the Teachers Service Commission. Additionally, a similar automation initiative is in progress at the Kenya Revenue Authority to enhance tax collection efficiency.