Govt defies IMF on new system

Treasury has gone ahead with procurement of a new software to replace the Integrated Finance Management Information System (Ifmis) despite reservations from IMF which wants current software sustained for the next four years.

But government has defended the move, saying the acquisition of the new software is part of reforms which donor agencies, including the International Monetary Fund (IMF) which recently called the country’s Extended Credit Facility (ECF) programme off track, want implemented.

Minister of Finance, Economic Planning and Development Goodall Gondwe and the ministry’s spokesperson Nations Msowoya confirmed in separate interviews that government wants a new supplier to install software at least by 2016.

Msowoya added that the new system will also provide financial reporting tool, human resources management information systems (HRMIS), including payroll and pensions while interfacing with other systems of debt and aid management.

“The new system will be rolled out in 2016. Currently, we are doing evaluations of the bids that we received. Once a winner has been identified, the results will be shared publicly in the print media,” he said.

According to Msowoya, government has invited bidders “to bid to supply, install, configure, integrate, test, deploy (including training and establishment of the support structure), commission and support a web-based Integrated Financial Management Information System.”

He said the bidder is also expected to provide associated hardware support services.

Gondwe said the new system was necessary and was recommended after Cashgate, adding government was also working on other recommendations on addressing weaknesses in the public finance management system.

Treasury’s resolve on Ifmis contradicts what President Peter Mutharika told the National Assembly on Friday during the opening of the 46th session of Parliament that government will continue upgrading Ifmis and other related systems as one way of guarding against any mismanagement of the public resources. He did not elaborate.

However, communication to Malawi government dated September 2015 from the Bretton Woods Institution cautioned Lilongwe against rushing to procure a new system before addressing fundamental flaws in the public finance management system.

IMF says the procurement of the new system is a distraction and costly affair.

As reported by Nation on Sunday two weeks ago, the IMF is also concerned that government has failed to address several issues such as improving on reconciliations of its bank accounts, among others.

“FAD [Fiscal Affairs Department] continues to have reservations for acquiring a replacement of Ifmis before addressing basic financial management practices and controls. This project may be a cause for distraction of resources and attention from the priority PFM [public finance management] reforms.

“In any case, operations of the current Ifmis will need to be sustained for at least the next four years as the target of July 2017 for the replacement Ifmis appears very optimistic,” said the report.

The IMF country office in Lilongwe was not immediately available for comment as we went to press, but several envoys based in the capital city, have previously faulted government for focusing too much on system failures instead of addressing fundamental practice flaws of the financial management system.

In the aftermath of Cashgate Woeste famously remarked that “computers don’t steal money but people”. ermany Ambassador Peter

But Msowoya said a total cost of the exercise will only be estimated once the government has evaluated the bids, allaying fears that the move would put government at loggerheads with the international community.

“What you should consider is that after Cashgate, we received several recommendations from various stakeholders to replace the Ifmis. As an immediate short-term measure, soon after Cashgate, we upgraded the software but as a long-term measure we had to completely replace the system,” said Msowoya.

He insisted that Treasury was unaware of the criticism from the IMF FAD team but suggested that such criticism could not represent the views of the whole IMF but “perhaps a few officials or a department.”

“IMF has been notified of our intentions and generally speaking they have been positive about it,” added Msowoya. n