OFFICE OF THE DEPUTY PRIME MINISTER &

MINISTRY OF FINANCE

KEYNOTE ADDRESS BY THE DEPUTY PRIME MINISTER & MINISTER

FOR FINANCE, HON. UHURU KENYATTA, EGH, MP, ON THE LAUNCH OF
THE IFMIS RE-ENGINEERING STRATEGIC PLAN AT KICC ON 28TH
FEBRUARY, 2011

Fellow Cabinet Ministers

Members of Parliament Present,
Permanent Secretaries,
Senior Government Officers,
Distinguished guests,

Ladies and Gentlemen,

It is indeed a great pleasure to be amongst you this morning as we mark yet
another milestone in the process of public financial management reforms. A
process whose outcome will ensure enhanced efficiency in the management of
public resources and increase accountability and transparency in the use of
taxpayers money throughout government. As stewards of the hard earned
resources bestowed upon us by hard working taxpayers, these reforms are a key
priority. Therefore, on behalf of my team and myself, I’d like to begin by
thanking you, most sincerely for taking the time to join us today as we
commemorate the Re-engineering of the Integrated Financial Management and
Information System (IFMIS).

As you are aware, the process of automating the public financial management
system commenced in the year 2003 when the government, through the Ministry
of Finance, coordinated the initial phase of implementation. At the time, the
public financial management sector was undergoing far reaching reforms as
espoused in the Economic Recovery Strategy for Wealth and Employment
Creation (ERS). IFMIS was one of the many interventions introduced in this
regard.

Unfortunately, the implementation of IFMIS encountered its fair share of

challenges. These challenges ranged from technology based systemic issues,
proliferation of independent public financial management initiatives, lack of
political will, change management challenges, capacity constraints, the existence
of parallel manual systems, and, a disjointed and often less than optimal internal
and external communication infrastructure. The full integration of all the financial
management processes was therefore never fully actualized.

Ladies and Gentlemen,

It is for these reasons that we sought to reinvigorate the potential that IFMIS
portends. In doing so, we have established an IFMIS department within the
Ministry of Finance, tasked with spearheading the re-engineering of IFMIS, and
whose first output – the IFMIS Re-engineering Strategic Plan – is what we are
launching here today.

The Re-engineered IFMIS envisaged in this strategic plan will ensure that all
users across the board are able to adhere to common standards, rules and
procedures. This adherence to common standards will reduce the risks of
mismanagement of public resources through greater comprehensiveness and
transparency of information. It will strengthen the efficiency of financial controls
by making comprehensive, reliable and timely financial information available. The
re-engineered IFMIS will improve accounting, recording and reporting practices
through the provision of timely and accurate financial data, a standardized
integrated financial management reporting system and an upgraded
computerized accounting system. For the first time, this information will be
readily available to users in Government, the Auditor General, Parliament,
investigative and prosecutorial agencies, Development Partners, and the general
public.

Numerous benefits of a re-engineered IFMIS can be cited, including: improved

efficiency in the management of resources leading to greater value for taxpayer’s
money; reduced fraud and corruption due to improved transparency and
accountability and real time processing leading to lower transaction costs. It will
also ensure readily available status reports that will enhance the capacity to track
budgets and thereby enable effective decision making and comprehensive real-
time recording of financial transactions as well as on-line electronic data
exchange between the Treasury system and central agencies.

Additionally, Ladies and Gentlemen, the Re-engineered IFMIS will play a great
role in improving financial planning processes by government. It will ensure an
enhanced ability to monitor revenue and disbursement and thereby inform policy
commitments during the fiscal year. IFMIS will provide accurate forecasts that
facilitate risk management and minimise the accumulation of arrears, and will
ensure an enhanced capacity to consolidate data from spending units as well as
the compilation of complete and up-to-date data for budget processes.

Ladies and Gentlemen, IFMIS will increase our capacity to produce relevant,
standard and accurate consolidated financial statements, thereby eliminating lags
in reporting. A key component of IFMIS will include the digitization of key
government documents that will ensure that financial accounting information is
assembled and reported objectively and that a backup and disaster recovery
system that will guarantee uninterrupted provision of government services is
created. Eventually, the Re-engineered IFMIS is expected to provide a platform
for the operation of a single treasury account.

The Re-engineered IFMIS will enhance the effectiveness and transparency of

public resource management by ensuring that all public financial management
processes are streamlined and integrated. This not only plays an important role
in streamlining the efficiency and effectiveness in the management of public
financial resources, but also will further contribute to fighting corruption through
the promotion of greater transparency of information across government
institutions.

Ladies and Gentlemen,

The need for a reinvigorated IFMIS has also been necessitated by the need to
ensure conformity to the institutional, administrative and process review
requirements of Vision 2030 and the new constitution. As a nation, we have
collectively affirmed our aspirations to become a middle income economy
through the devolved governance structure created in our new constitution. By
reviewing our IFMIS objectives at this time, the government seeks to streamline
the public financial management system in preparation for synchronization with
the new structures to be formed.

This initiative is further buttressed by the need to consolidate and further

capitalize on the full potential of IFMIS in promoting good governance and
supporting anti-corruption interventions, as well as an efficient and effective
management system for utilization of public resources. You will therefore find
strategic actions within this plan, proposing measures to be undertaken to
conscript all the necessary modules, software requirements, communication
structures and inter-agency linkages necessary to transform the framework into
the ideal “comprehensive, consolidated and integrated financial management
system.”

Through this re-engineering process, the government also intends to address the
change management and communication challenges previously experienced in
the pilot phase of implementation. The strategic plan has thus identified the
political, administrative and capacity constraints that require rigorous
intervention in order to secure the buy-in and ownership attributes necessary
within all ministries and departments to facilitate effective implementation of
IFMIS and improve the confidence of all relevant stakeholders. The IFMIS Re-
engineering strategic plan, has further identified the need to streamline existing
silo based Public Financial Management interventions into a coherent and
cohesive framework as originally intended. We therefore call for the support and
cooperation of the different institutions to help in meeting this core objective that
is intended to not only enhance, but expound on the common objectives.

Ladies and Gentlemen,

The strategic plan we are launching here today will guide the realisation of the
bold yet necessary objectives we have set out to achieve. It will provide a
roadmap, outlining the key processes, resource requirements, and priorities
necessary to achieve the set objectives within a specified timeframe.

Collaboration with other ministries and departments is key to the successful

implementation of this strategy. We therefore acknowledge the support given so
far, in developing the strategic plan, from the various ministries and institutions
through the many consultative meetings and interactions. All the contributions
have enriched the document that we are about to launch today. We especially
acknowledge the role and continued contribution of the Ministry of Information
and Communication, through the ICT Board, in supporting the development of
the form and structure of interventions we see in this strategic plan.

The IFMIS re-engineering process is also keen to take advantage of the

extended support, partnership and learning opportunities of all stakeholders
including our development partners and the private sector. In this regard, I wish
to extend my appreciation to the development partners of the PFM sector group
who have continued to provide the necessary financial and technical support to
the Government’s aspirations within public financial management reforms. In
particular, I wish to express sincere appreciation to the GTZ for providing
technical support in the development of this plan.

Ladies and Gentlemen,

The preparation of this plan has been guided by my ministry’s need to uphold its
vision, key operational values and the need to realize our mission. I therefore
pledge to maintain a keen interest in the way the plan is implemented, towards
the realization of these goals and will continue to render myself accessible for
the necessary leadership, support and guidance. I wish to invite all the
stakeholders to join in implementing this Strategic Plan and give support
whenever called upon to do so. I am confident that we will collectively achieve
the goals set out in this IFMIS Re-engineering Strategic plan of “An excellently
secure, reliable, efficient, effective, and fully integrated financial management
system for our country Kenya.”

It is now my pleasure to declare the IFMIS Re-engineering Strategic Plan

officially launched.

Thank you, God bless you and God bless Kenya.

__________________________
Hon Uhuru Kenyatta, EGH, MP
DEPUTY PRIME MINISTER & MINISTER FOR FINANCE
28TH FEBRUARY 2011