E-procurement will spell doom for thieves and promote accountability

In its own unique way, history provides rare moments to a few individuals to rewrite it in a fundamental way for the betterment of a society. In addition to his unexpected rise to the Cabinet Secretary in-charge of the National Treasury, the gods have offered FCPA John Mbadi another moment to cement his legacy in the country’s public resource governance architecture.

Forget about the diversionary noise around the directive for the government to transition to a completely e-procurement system, popularly referred to as the e-GP. It is appalling that Parliament purported to annul Treasury’s circular for the mandatory transition and that Governors have dared to declare the move unconstitutional. This shamefully demonstrates the depths of ignorance of the law on the part of the men and women elected to high offices in the land.

While there may be challenges in the rollout of the Electronic Government Procurement system, this is no reason to suspend or defer it. Ceding to such noises would be conferring another win to thieves who have turned public procurement into their playground.

For context, e-procurement is not new in our public financial management architecture. It was one of the modules contemplated in the Integrated Financial Management Information System (IFMIS) that was first introduced in government in 1998. Rollout started in 2003 as part of the wider public financial management reforms by the Narc Government.

By the time the 47 devolved units came into being in 2013, IFMIS was the default financial management system introduced to them. How then can Governors claim a module contemplated in a system they have used right from the onset to be unconstitutional, when the system itself is older than the Constitution? During his tenure, former President Uhuru Kenyatta issued at least three executive orders for a mandatory adoption of governmentwide e-procurement, based on evidence trails available on the internet.

First it was during the launch of the e-procurement module in IFMIS on August 13, 2014, under then CS Treasury Henry Rotich. Seven months later, on March 11, 2015, he again gave all public entities one week to move to e-procurement. In June 13, 2018, he issued another executive order for all Accounting Officers to adopt e-procurement, effective from January 2019.

The troubling question that comes to mind is: why have all attempts to digitize public procurement been frustrated to the extent of outright rejection of even executive orders of a President?

This question must caution the public not to join the choir of the cry-babies, especially elected leaders who wield immense power over taxpayers money.

The Law

For clarity, the need for a transparent procurement system is contemplated in Article 201 of the Constitution, that sets the principles of Public Financial Management. Among these principles is the demand for an open, transparent and accountable system that includes public participation. The National Treasury, the agency behind the circular for mandatory transition to e-procurement, is contemplated under Article 225 that required Parliament to enact a legislation to establish it and prescribe a mechanism for expenditure controls and transparency across all government levels.

Parliament enacted the Public Finance Management Act of 2012 to fulfill the requirements of Chapter 12. Section 11 of the Act establishes The National Treasury, with Part III of the act detailing its general responsibilities, powers and those of the Cabinet Secretary in-charge of it. By deed of this part of the law, all executive powers in the administration of public resources, and designation of Accounting Officers in fulfilment of Article 226 vest on the CS in-charge of Treasury. Part IV, covering Section 102 – 186 details similar powers at the County Treasury level.

However, powers vested at the county level cannot contravene or be inconsistent with those provided in the National Treasury. In the event of such contravention or inconsistency, those of the National Treasury takes precedent. Article 227 demands Parliament enacts a legislation to establish a transparent and efficient public procurement framework. The Public Procurement and Asset Disposal Act of 2015 actualized this constitutional requirement. The Act vests responsibilities for policy formulation, training and capacity building, and publication of common user items on The National Treasury, established under Section 11 of the PFM Act, 2012.

Parliament and the caucus of governors is not part of the bodies contemplated in part II of the procurement act involved in regulation of public procurement. Section 7(1)  vests the responsibility for public procurement policy in the National Treasury, with section 7(2)(c) mandating it to design and prescribe an efficient procurement system for the national and county governments to ensure transparency. Further, the Treasury is to provide technical assistance in the implementation and operation of such a public procurement system.

How can MPs be so ignorant of the details of laws that they themselves passed? How can county bosses be so naïve of the frameworks that govern public resources that they keep demanding under the equitable share and their own local collections, yet they have County Attorneys? Is it not disgraceful for senior public officials to display such monumental ignorance of the law on their powers, and the limits of their powers thereof? Where else do they exemplify such mediocrity? Is it any wonder the management of public affairs seems like one hell of a pandemonium in the eyes of the public?

What is at stake

From an analytical point of view, the voices against e-procurement transition are not entirely unexpected. The trillions of shillings in approved public budgets at both the national and county level get spend through procurement. The manual procurement system has been a great enabler of wanton plunder of taxpayers money.

Politicians and senior public officials, through family members and cronies award themselves lucrative public tenders in direct conflicts of interest. A manual systems is easily manipulable in interfering with evidence trail. In extreme cases, the thieves have no problem eliminating physical witnesses to protect their loot.

In addition, tender-preneurs can easily bypass their tax obligations despite walking away with billions from inflated contracts or shift base from one public entity to another when the system catches-up with their wicked ways. More importantly, an opaque manual procurement system enables thieves a perfect opportunity to siphon taxpayers money and quietly emerge in our communities with money bags to buy their way into lucrative political or appointive public offices.

This explains why President Uhuru’s executive orders never saw the light of the day, and why fierce pushbacks against the current directive are emerging from the most unlikely quarters. In a way, this lifts the lid on who the real thieves are.  

While an e-procurement system is not full-proof, digital systems will leave permanent trails that can easily be uncovered in a professional forensic audit. Abuses of the system, proxy suppliers and tax cheats will easily be identifiable. If and when interfaced with the other IFMIS modules, it will provide an end-to-end financial management system that has eluded the government for over two decades.

A disclaimer here, however, is that citizen vigilance must be sustained since no digital platform can cure human greed or incompetence, that has characterized the management of our public affairs for most of our independent history.