Treasury upbeat on new Ifmis

Ministry of Finance, Economic Planning and Development has expressed optimism on the success of the new integrated financial management and information system (Ifmis) despite the International Monetary Fund (IMF) raising concerns on human resource capacity during the transition period.

Treasury is in the process of procuring a new Ifmis—government’s electronic payment system— that is expected to cost taxpayers $14 million (K10.2 billion) to replace the current Ifmis that is said to have numerous loopholes and led to the loss of about K24 billion in 2013 during the infamous Cashgate.

Capital Hill, where loopholes in Ifmis led to massive plunder of taxpayer’s money

In an interview yesterday, Treasury spokesperson Davis Sado said government is working on concluding procurement and other administrative issues and hopes to find a consultant to manage the transition by December.

“Our initial report was submitted to the World Bank, but there are a few issues that have to be concluded before we roll the new system. Our target is that by December, we should engage a consultant to manage the transition and installation of the new system and we have been flying adverts in the newspaper to that effect.

“We are going to employ Ifmis adviser as well as a change management adviser in a bid to improve human capacity and we will keep on building the capacity here in the civil service which is part of the component. We are optimistic that things will run

smoothly,” said Sado.

Government is procuring a new Ifmis to replace the current one which was prone to abuse and led to the loss of K23 billion in 2013.

But in its technical assistance report published on Friday, IMF raised concerns on the overall adequacy of Ifmis pertaining to human resources to support both systems during the transition period.

In the report on strengthening fundamental controls and reporting, IMF advises government that to avoid holding up the vendor and incurring cost-overruns, the different roles and responsibilities need to be planned ahead.

In an interview yesterday, IMF resident representative Jack Ree warned that the migration to a new system is a serious undertaking which requires rigorous planning.

“From the macroeconomic point of view, getting the Ifmis right is a critical element of the public finance management reforms advanced under the Extended Credit Facility [ECF] programme. If we got stuck in moving the Ifmis project ahead, it would be difficult to safeguard and sustain, for example, the gains made in bank reconciliation.

“If we cannot safeguard these gains, it would be difficult for the country to switch gear to inclusive growth as investor and donor confidence may relapse,” he said.

Ifmis came into the limelight in 2013, between April and September, when it was discovered that about K24 billion taxpayer’s money was stolen whereas between 2009 and 2014, about K236 billion could not be accounted for.

The old version of the software, Epicor 7.3, has been due for extensive upgrading since it was installed in 2005, but Cashgate findings by British forensic auditors, Baker Tilly, established that it was grossly abused, especially by lower management accountants in the civil service some of whom are answering charges of theft in court.

Those behind the system, which relies heavily on the overall network infrastructure, failed to study and establish the network specifications required to meet Ifmis standard operations before its launch; hence, the frequent failures.

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  1. Malawians have become so adept at circumventing such electronic management systems, that this attempt becomes an exercise in futility. Just imagine how the Road Traffic electronic system has been overpowered and circumvented. I have yet to see this work in Malawi, where corruption is king.

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