Govt defends financial management system that cost billions as PAC, AG point to inefficiencies, losses

By The Inspirer

The Ministry of Finance and Economic Planning (MINECOFIN) has said that the Integrated Financial Management Information System (IFMIS) on which the Government has spent about Rwf21 billion has enabled consolidated planning, budgetting and electronic payments in public entities.

Officials from the Ministry made the comments on Monday, September 27, 2021, while responding to queries by Members of the Parliamentary Standing Committee (PAC) that the Government was not fully realising value for money from the system, calling for its optimisation.

It was during PAC’s public hearings that were based on the Auditor General’s performance audit of IFMIS from its early development in 2007 until 2020.

The issues that were identified by the audit include that some entities were still using other systems outside IFMIS, and the debt and [grant] management component that was not yet integrated in the system.

Specifically, MPs and the Auditor General (AG)’s Office pointed to the first version of the system, which cost Rwf5.4 billion, was used from 2010 and was replaced by an upgraded version which started being used since 2016

Placide Mukwende, IFMIS coordinator at MINECOFIN said that system started to be developed in 2007 by a foreign company called ‘E-tools’, pointing out that Rwandans had not gotten capacity to develop a complex system of that level.

It was a web-based system intended to enable all public entities to connect online and address the issue where each had to use its own system for financial management.

The system started being utilised in 2010 with 172 budget agencies, he indicated.

He said that the sustainability aspect where the country wished that the system be owned by Rwandans was not achieved, pointing to the issue of employing foreign consultants which was not offering sustainable solutions.

The Ministry of Finance and Economic Planning, he said, decided to start the second system – version two of IFMIS – which was developed since 2014 and stared being used in 2016.

Its development, he explained, was through a partnership between foreigners and Rwandans, adding that all foreigners were phased out from the project in 2017.

“We cannot say that the money spent on the first version [of integrated IT system] was not a loss because it helped serve the country for a six-year period,” he said.

Talking about the importance of the version two, he said that before it, all sectors of the country were not in IFMIS.

Sectors were still using the Subsidiary Entities Accounting System (SEAS) which was an easy to use system not based on the web because in 2013, all sectors had not internet connectivity.

He said that the off-line system used excel programme which was in Microsoft Access because each computer had this programme and Excel.

MPs and the Auditor General voiced concern over Rwf700 million that was invested in this SEAS system, yet it was not an integrated system that connected various public entities in terms of financial management.

Grace Rwakarema, Assistant Auditor General said the performance audit of the IFMIS intended to assess its value for money and functionality.

Talking about SEAS which cost over Rwf700 million, she said that it would be rolled out in 416 sectors, then in [public] health centres and primary and schools.

But, she said that the Office of the Auditor General followed the roll-out plan of the system and realised that it did not go beyond sectors.

“It was not informed by a feasibility study on how it would operate,” she said, commenting on why the system was not implemented in health centres and schools.

She suggested that it was realised the system was not compatible such that it would not fit with IFMIS, which resulted in its phasing out after a short period.

However, Mukwende said that the over Rwf700 million was not spent on development the system, rather on training staff in 416 sectors of the county on how to use the system over four-year period.

Upgraded IFMIS  

Mukwende said that the second version of IFMIS had the capacity to accommodate all the sectors [in terms of finance management], all health centres, Rwanda embassies, and all [major] public projects such that they moved from 174 entities to over 1,200.

“Currently, the entire central government, and districts are no longer making payments by check. They all use electronic payments thanks to the successful integration,” he said.

In addition, he said, the system was integrated with the Integrated Personnel and Payroll Information System (IPPIS), where paying salaries to public servants is done electronically – paperless payments.

For debt management, a module not yet integrated in the system, he said that there is a plan to have negotiations with funders because [generally] they provide loans or grants and choose which system to manage them.

MP Jeanne d’Arc Uwimanimpaye said that the debt management module should have been integrated into the system because its lack results in using different systems and implies information gap in IFMIS.

“There should be a strategy to prevent poor planning in IT systems which cost money but they are not productive enough,” she said, citing the initial automation of Savings and Credit Cooperatives (SACCOs).