The Effects of Integrated Financial Management Information Systems, on Accounting Operations of Government Agencies in Kenya

Abstract

A good Public Financial Management (PFM) system has been found to be a critical tool in economic growth and development by the government to collect revenue, manage, and appropriate public funds and resources in a manner that is both transparent and efficient with the aim of enhancing service delivery to the public at large. The Integrated Financial Management Information Systems (IFMIS) was introduced in Kenya through the former ministry of finance and the now National Treasury in 1998, while piloting of the system in line ministries took place in 2003. Public finance management practices had been characterized by challenges in revenue mobilization and lack of transparency and accountability amongst the custodians of public resources in the management of revenue. The aspect of misappropriation of funds and corruption had been rampant in many developing countries. In government institutions, IFMIS is referred more specifically to as the process of computerization of public accounting and financial management (PFM) processes. Some of the processes that are computerized include execution of accounting and reporting as well as budget preparation. An integrated information system for financial management of ministries, departments and other public sector operations has become an essential tool for transparency and accountability. This research study aimed at assessing the effects of IFMIS on accounting operations of government Agencies in Kenya. To achieve this objective, the research was guided by the following specific objectives: To established whether IFMIS use in government Agencies in Kenya has improved access to financial information and to establish whether IFMIS use in Government Agencies in Kenya has improved timeliness of financial reporting. The study adopted descriptive research design and it targeted 59 government agencies in Kenya. Data used in the study was collected by the use of questionnaires and secondary sources. SPSS was used to analyze data and the study findings were presented using Tables, Figures, means and standard deviation. The study found out that staffs understand the different modules under IFMIS, the staffs are computer literate, IFMIS system has minimal down time, IFMIS system allows staff to share financial information, the agency has adequate hardware to support IFMIS, IFMIS hardware use latest state of technology, the use of IFMIS has improved the timeliness in submitting financial reports and the use of IFMIS has brought about easy record storage. The study concludes that 58% changes in dependent variable (accounting operations of government agencies in Kenya) is contributed by the independent variables of the study (IFMIS system reliability, Staff Competency, ICT Infrastructure) while 42% is explained by other factors, ICT infrastrucure has a largest effect, then staff competency and lastly IFMIS system reliability. The study recommends that all the accountants and other officers in Government offices should ensure that their staffs understand the different modules under IFMIS, management of government agencies in Kenya should be aware that IFMIS system has minimal down time, management of government agencies should ensure that there is adequate hardware to support IFMIS, ICT departments in these government agencies should ensure that their IFMIS hardware use latest state of technology, the top manaement of government agencies should realize that the use of IFMIS improves the timeliness in submitting financial reports, there is also need for government agencies to ensure that records are easily stored and retrieved from the data bases using IFMIS and government agencies ought to enhance financial efficiency in their agencies by the use of IFMIS.