1. STRENGTHENING GOVERNMENT FINANCE & ACCOUNTING FUNCTIONS- KENYA

2. 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

3. 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………

4. IFMIS Oracle Financials Best Practice Business Project - NOT IT Project New Processes New procedures IPSAS Effective Controls Modern Efficient Staff Development Training Professionalism of Cadre Organisational Alignment New Schemes of Service Project Structure UPDATED LEGISLATION IFMIS Enabling New Procedures And Processes Driving New Changing Roles New Skills sets Effective Financial Management Tighter Controls & Strong Audit Trails Improved Resource Allocations Overspending Curtailed Improved Revenue/AIA Management Platform for MTEF Transparency on Procurement Fraud Detection & Deterrence Timely reliable information EIS for Senior Managers TRANSPARENCY COMPLIANCE ACCOUNTABILITY GOVERNANCE REVISED REGULATIONS

5. 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

6. 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

7. 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

8. IPPD Public Sector Planning & Budgeting MTEF Financial Modelling Budgetary Control Output based Prioritised Objectives Dissemination to Districts Purchasing & AP Control 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 & Feedback Financial, physical and process, etc. General Ledger Cash Management Financial Management Expenditure Control Cash Flow M’gement Compliance, Transparency Online access to Information Audit controls Linkages/Interfaces With Other Systems Revised Priorities Revised Activities Revised Resource Allocations Public Debt Activities, Programmes, Outputs, Impact Other Systems KRA, CBK, etc.

9. Invitation To Tender Request for Quotes Quotations & Tenders Evaluation Details & Evaluation Report LPO & LSO Purchase Orders FULL AUDIT TRAIL THROUGHOUT WHOLE PROCESS Award of Contract Attached Against Order Suppliers’ Invoices Receive Goods Services Cheque Payment Bank Statement Cheque Cleared Bank Rec All details entered in system. Approvals at each stage, including MTC. Procurement method validated Against thresholds & regulations Evaluation Reports, Contracts and other important documents available online

10. System Vision One Financial System For All Stakeholder Needs Central System FMAD BSD ERD MinistriesDistrictsRCSPlanningDebt Management Audit (& Anti-Corruption) AGD Procurement Dept Revenue Management Donors Other Policy Makers

11. 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

12. Cash Management Reporting and Analysis Thro’ Reporting tools General Ledger Core Accounting & Reporting General Ledger Core Accounting & Reporting Purchasing Accounts Payable Public Sector Budgeting Reporting Tools Inventory Fleet Management Asset Management E-Procurement Accounts Receivable Treasury Management HRMS & Payroll

13. 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

14. 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

15. 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

16. Other Issues Commitment, Ownership & Participation Continuity of Right People in the Teams Institutional Linkages/Arrangements Strong Communications to All Levels

17. Benefits To All: Users of System Service Delivery Officers All Stakeholders & Managers All Civil Servants Kenyan Citizens

18. 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

19. 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

20. 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