An Idiot’s Guide to Government Procurement Processes that aid and abet corruption

An Idiot's Guide to Government Procurement Processes that aid and abet corruption
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Government procurement is cluttered with regulations that seek to enforce accountability.

Unfortunately, accountability is a value foreign to Kenyans. We are so crude, rarely accountable to ourselves. It gets more demanding when we expect people to be accountable to common resources.

The custodians of our common resources must be accountable to us, irrespective of the prevailing acquisitive culture. It’s limiting to assume the on-going rampant looting is a cultural issue that needs social engineering. Human beings are a messy species.

The structures in the public procurement processes aspire to minimize collusion among the players in a purchasing decision. This pursuit necessitates IFMIS and the voluminous public procurement and Assets disposal regulations.

Public entities are supposed to prepare a procurement plan that will guide the budgeting process. The Public Procurement Regulatory Authority (PPRA) enforces this but the compliance rates are relatively low. Ideally, government departments should budget based on the services and goods that they seek to purchase for a particular financial year. The lacklustre approach towards procurement plans is the first trouble signal in government procurement processes.

The requisition necessitates the start of the supplier identification process. Bias is entrenched here; there are categories that end up with prequalified companies that can be traced to an individual.

The budgeting process is where chaos reigns. From the guidelines in the Public Finance Management Authority, the budget process reflects ingenuity but in our structured corruption, the political process meets the evil bureaucrats. Looters with political connections sneak in their pet infrastructural projects that have sufficient policy orientations to pass the lucid tests in the prevailing political goodwill. This explains the obsessions with health, security, and transport. At the county level, the budgets will always have some agricultural value chain project without any supporting data on necessity and sustainability.

The budget estimates with the baked projects are presented to the National Assembly and the County Assemblies for the counties. The evil bureaucrats defend the baked projects to wade off the potential threat to the corruption eggs under incubation.

At the parliamentary level, lobbyists in charge of goodwill mining create media conversations about a crisis that can only be solved by the proposed baked project. If there is a proposed irrigation dam in Ukambani, the media will be awash with stories of hunger in South Eastern and renewed conversations on food security.

As our representatives review the budget estimates at the departmental committee levels, deals are struck. The tenderprenuers in a certain government department have a traceable relationship with the chairperson or a member in the respective parliamentary departmental committee. This explains why leadership and membership of certain parliamentary committees is a high stakes game.

After parliamentary approvals and the enactment of an Appropriations Act, the budget is uploaded to the IFMIS system as the reference point for all the requisitions in a particular financial year. Since our national crudeness knows no boundaries, there have been cases where evil bureaucrats have changed the figures passed by the Assembly and uploaded an altered budget to the IFMIS system.

With an approved budget, the government drafts a Finance Bill, this is the taxation law to fundraise for the budget. It gives legal credence to the lofty zero-rating pronouncements synonymous with budget speeches. The counties also enact their respective Finance Acts to legalize their rates. The double taxation arguments that agricultural multinationals are advancing emanates from conflicting taxation aspects due to exposure to two taxation laws. The faint demarcations are a haven for tax evaders in the agricultural sector.

The government procuring entities places adverts to prequalify suppliers now that the budget is in place. This should be guided by the procurement plan. The user department, say a government laboratory, raises requisition through the IFMIS system. The requisition necessitates the start of the supplier identification process. Bias is entrenched here; there are categories that end up with prequalified companies that can be traced to an individual.

The process of identifying a supplier is dependent on the amounts involved and the procurement class that a government entity falls under. In big money projects, an open tender is advertised, the bidders are evaluated and the best in terms of price, quality, delivery time and such other parameters is given the purchase order.

In projects with relatively small amounts, the pre-qualified suppliers are called upon to submit quotations that are subjected to the evaluation process before award. In instances where a tenderpreneur had influenced the prequalification, s/he will end up with all the quotations and quote as s/he pleases.

The open tender process is more open than the quotations way, but you rarely see counties placing open tenders and yet they have massive projects. There is the tender splitting dragon where projects are split to small works with minimal amounts that are within the call for quotations limits. A county that is building a social hall starts getting different suppliers for roofing, fencing, labour works and such. Eventually, the project is not subjected to the open tendering process thus creating room for a looter to overprice the supplies.

At the heart of the open tender or quotations is the conveniently neglected price indices set by the Public Procurement Regulatory Authority (PPRA). A casual check at their website reveals some blatant ineptness; the price indices are rarely updated and basic information like circulars that offer operational guidelines to government departments are not available to the public. One of the biggest pillars of tenders overpricing is the failure to integrate the IFMIS system with the PPRA price indices.

The government is not a major consumer of specialized goods whose price cannot be determined in all counties. It is scientifically possible to get a range of engineering estimates for building roads in areas of certain gradients and soils. With such integration, the IFMIS system should reject any billing beyond the set PPOA index during the ‘inputer’ and the ‘validater’ stages that come after the procurement process.

In times of crisis, diligence supersedes speed.

The IFMIS process assumes there is money whenever a purchasing process is initiated, the ‘approvers’ bonds a vote as par the approved and uploaded budget. This guides the internet banking stage where money appropriated to a particular vote should be used to pay the invoice raised for that very supply.

However, this is rarely the case as political expediency guides the process. The Controller of Budget (COB), that rarely questioned office, is yet to ensure budgetary discipline across government departments, every year, just before budget approvals, treasury takes ratification requests to the National Assembly for funds their used beyond the approved budget. This is made possible by a section of the Public Finance Management Act that ‘over anticipates’ emergencies.

At the county level, the controller of budget gives withdrawal approvals without proper diligence on the intended use thus enabling the governors to divert funds meant for certain payments to their political pets’ projects. This explains the accumulated county debts and the resultant tendency of oiling the county finance bureaucrats to facilitate payments.

There are political henchmen who have made careers in peddling invoice payment influence. Creating an approver stage for the controller of budget office at the IFMIS system may derail the payment process but in times of crisis,s diligence supersedes speed.

At the end of a financial year, there are reports of government departments that did not use the funds allocated to them. There is the general misconception that the money was in the entity’s account and treasury recovered the money upon the expiry of the budget period. The situation is usually precipitated by slow treasury releases, our bureaucrats’ appetite for projects cannot allow them to let g of an opportunity to implement a government programme.

At the county level, their budgets are always unrealistic, the anticipated local revenue is rarely met since nowadays no one cares how Kanjo payments are being done, automation systems are sabotaged all over, governors do not want their vote rich informal sector taxed and the general thuggery that characterizes all MCAs and MPs from urban areas where the informal businesses are rampant, hampers taxation. 

The counties end up with huge budgets that cannot be implemented, since we erroneously interpret huge budgets as performance indicators, we eventually end up with projects ‘money’ that was not utilized.

To streamline public procurement, we may need to devolve purchasing decisions to lower cadres with reduced allocations, a headmaster in a local primary school will eventually buy books even if she eats up 20% of the allocation but if Jogoo House was to purchase books for all primary schools, we will have a back and forth circus and ultimately primary schools won’t have books.

The Public Procurement Regulatory Authority has been pursuing e-procurement to manage bias in the prequalification and evaluation stages but we all know the process will take ages to entrench.

The IFMIS guys should stop acting deputy god and seek ways of integrating the system with databases from other government entities that ensures accountability.

KRA should be able to access data about paid government suppliers. In the long run, a Parliamentary Act to establish government payment entity that takes over the roles of the IFMIS department, PPRA and the COB Approval office will be necessary to entangle IFMIS from the current tentacles.

 

 

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