Auditor General Nancy Gathungu has revealed that the government’s Integrated Financial Management Information System (IFMIS) has failed to meet its core goal of promoting transparency and accountability in public spending, contributing to irregularities and the expenditure of Sh10.2 billion without parliamentary approval.

In her 2023/24 audit of the national government, Gathungu said IFMIS, which was intended to improve the accuracy, reliability, and timeliness of public financial data, has not delivered due to several critical shortcomings.

“The benefits expected from the deployment of IFMIS have not been realised due to inadequacies of the system,” reads the report.

The audit found that some transactions captured in IFMIS were later cancelled, but there was no evidence to show the cancellations were authorised.

It also revealed mismatches between payments recorded in IFMIS and those in official financial statements. Some payments appeared in the system but not in the statements, while others in the statements had not been posted to 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 raised concern about inconsistencies between ledger balances and supporting schedules in IFMIS, calling into question the system’s reliability.

In addition to these failures, the audit uncovered Sh10.2 billion in public spending that bypassed parliamentary approval, in violation of Article 223 of the Constitution. This includes Sh4 billion used for the maize flour subsidy programme and Sh6.2 billion spent on acquiring 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.

Gathungu has recommended changes to the Public Finance Management Act, 2012, to clearly outline how to handle such cases.

“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,” she said.