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information that staffs requires to carry out ought to enable the staffs to feel motivated
on their work. Public service staffs ought to to deliver better on their job. The ministry
be comfortable with the introduction of ought to have enough capacity to effectively
IFMIS. IFMIS ought to upgrade to improve promote use of IFMIS.
public service performance. IFMIS ought to
improve the effectiveness and efficiency of Key Words: implementation, integrated
public expenditure programs. Staff training financial management information system,
public sector, Kenya
INTRODUCTION
The study was aimed at investigating the factors affecting the successful implementation of the
Integrated Financial Management Information System in Public Sector in Kenya. The Kenya
Government has implemented the Integrated Financial Management Information System
(IFMIS) since the year 2005 as its sole accounting system. The reason why the Kenya
Government adopted the use of this system was as a result of the numerous benefits envisaged
from its effective use (ROK, 2005). However, for now over five years of implementation, this
system has still not been able to fully provide the expected benefits of integrated financial
planning, implementation and control of public expenditure.
The Government of Kenya has adopted the United Nations Standard Product and Services
Classification (UNSPSC) for all items to be used for Procurement of goods and services.
UNSPSC is a system of classification for commodities cutting across all private and public
sectors having a single version of cataloging for all known items to be used. The UNSPSC thus
become the new way of capturing all procurement items going forward. The items have been
defined in the system, thereby facilitating the procurement process.
According to Arnety & Wepukhulu (2013) IFMIS refers to the computerization of public
financial management processes, from budget preparation and execution to accounting and
reporting, with the help of an integrated system for the purpose of financial management.
According to (Dorotinsky, 2003) an IFMIS is an information system that tracks financial events
and summarizes financial information.
It supports adequate management reporting, policy decisions, fiduciary responsibilities and the
preparation of auditable financial statements. In its basic form, an IFMIS is little more than an
accounting system configured to operate according to the needs and specifications of the
environment in which it is installed (Rodin & Brown, 2008). In general terms, it refers to the
automating of financial operations. The existence of appropriate Systems, sound legal and
regulatory frameworks as well as a competent and productive Civil Service is the cornerstone of
an efficient Public Finance Management (PFM) regime.
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Public Financial Management reforms have been identified as the key drivers to efficient Public
service delivery and creation of wealth and employment, ensuring that the Government and its
Departments raise, manage, and spend public resources in an efficient and transparent way with
the aim of improving service delivery. Governments in developing Countries are increasingly
exploring methods and systems to modernize and improve Public Financial Management
(Govende, 2012).
All over the world there is increased determination to enhance the quality of public financial
management with many developed and developing countries making vital and impressive
achievements in strengthening management of finance in their public sector. According to a
report by the United States Agency for International Development (USAID, 2008), the
introduction of a new IFMIS system is accompanied by a plethora of issues which needs to be
planned for. These include aspects related to legal frame work, business/functional processes,
organizational arrangements, budget classification structures, chart of accounts, change
management, systems requirements/specifications, systems development, procurement of
software and hardware, configuration of software and hardware, and data conversion / migration.
Further, Diamond & Khemani (2005), assert that governments and their Departments have found
it difficult to provide an accurate, complete, and transparent account of their financial position to
parliament to other interested parties, including donors and the general public. This lack of
information has hindered transparency and the enforcement of Accountability in Government,
and has only contributed to the perceived governance problems in many of these Countries in the
past decade, developing countries have been encouraged to reform their public expenditure
management systems and have increasingly embarked on major projects to computerize their
Government operations (Musgrave, 2009).
For example, over the years, there has been an introduction of the Integrated Financial
Management Information System as one of the most common financial management reform
practices, aimed at the promotion of efficiency, effectiveness, accountability, transparency,
security of data management and comprehensive financial reporting. These cope and
functionality of an IFMIS varies across Countries, but normally it represents an enormous,
complex, strategic reform process. This study is expected to uncover weaknesses experienced by
developing Countries in rolling out new systems. Hendricks (2012) found that lack of
commitment, lack of capacity, institutional and technical challenges were risk factors to
successful implementation. This study therefore is aimed at investigating factors that lead to
successful implementation of IFMIS in Public Sectors in Kenya.
Public Sector in Kenya includes but not limited to Ministry’s, State Corporations, independent
Constitutional Commissions, Semi-Autonomous Government Agencies, Universities and
Hospitals. These organizations are established through institutional Acts of Parliament.
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Therefore, this study was limited to state departments. Various factors determine the success of
IFMIS development and implementation in these institutions at large. In this Research Project
Report the purpose was to identify some of the challenges and to present solutions that can serve
as best practice guidelines in the implementation of an IFMIS (Diamond & Khemani, 2005)
The Research study was aimed to address and identify the challenges relating to the
implementation of an IFMIS and to present best practice guidelines that was facilitate a
successful implementation of an IFMIS in Kenya Public Sector. The methodology used was that
of a literature study where theories are explored and used to solve a research problem. According
to (Cooper and Schindler, 2006), theory is a set of systematically inter-related concepts,
definitions and propositions that are advanced to explain or predict phenomena (facts). Good
theories and models provide causal accounts of the world allow one to make predictive claims
under certain conditions, bring conceptual coherence to a domain of science and simplify our
understanding of the world (Mouton, 2001).
Integrated financial management information system (IFMIS) has been incorporated in the
U.S.A Department of Homeland Security (DHS) as the official Accounting and financial
management system to track all financial transactions (Thaggard & Callahan, 2011). According
to a report by the United States Agency for International Development (USAID, 2008), the
introduction of a new IFMIS system is accompanied by a surplus of issues which needs to be
planned for. These include aspects related to legal framework, business/functional processes,
organizational arrangements, budget classification structures, chart of accounts, change
management, systems requirements/specifications, systems development, procurement of
software and hardware, configuration of software and hardware, and data conversion/migration
processes from budget preparation and execution to Accounting and reporting, with the help of
an integrated system for the purpose of financial management (Lianzuala & Khawlhring, 2008).
Arguably, using the term “IFMIS” can sometimes be erroneously interpreted as describing a
system that can capture all the functional processes, and the relevant financial flows, within
public expenditure management. However, the complexity of information systems within the
Government sector is, to a large extent, due to the multiplicity of functions and policy areas.
IFMIS can be explained to be a management tool, a system, and it should provide a wide range
of non-financial and financial information. Over the years, according to Chene (2009), there has
been an introduction of the IFMIS as one of the most common financial management reform
practices aimed at the promotion of efficiency, effectiveness, accountability, transparency,
security of data management and comprehensive financial reporting.
In the context of the current development planning and visioning strategy (ROK, 2008), Kenya’s
development goal is to create and sustain a high level of economic growth whose benefit are
invested to ensure a just and cohesive society enjoying equitable social development in a clean
and secure environment. To achieve this, the Public Expenditure and Financial Accountability
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(PEFA) Program founded in 2001 take a country’s public expenditure, procurement and financial
accountability systems as crucial in assisting Governments to serve their citizens better.
The foundations for establishing a viable and sustainable Information and Communication
Technology (ICT) industry and the opportunities it offers against the challenges many African
countries face in their concerted efforts to participate fully in the information society and
knowledge economy (Rozner, 2008). Key ICT Policy thrusts are discussed focusing on the ICT
as a sector, e-government, e-governance and the education and training sectors. It is important to
emphasize the need for Government to be E-literate in order to competently manage and monitor
the ICT sector. It is reaffirmed that ICT is Cross cutting and an enabler for growth and
development and for maximum benefit, countries must establish the right policy interventions,
resource investments, appropriate networks (partnerships) and enabling environment.
The Economic Recovery Strategy for Wealth and Employment Creation (ROK, 2003), identified
PFM reforms as key to achievement off is sustainability and balance in the Public economy,
restructuring and re-allocations for growth and poverty alleviation, improved public sector
performance and efficiency and effectiveness in the National Government. National Government
utilizes public finance to provide goods, works and services to members of the public and does
so by way of the public sector.
The Organization for Economic Co-operation and Development (OECD, 2007) describes the
public sector as comprising the general government sector plus all public corporations including
the central bank. According to the Oxford Policy Management (Oxford Policy Management
Limited; 2011), the way public sector budget is set, managed, and reported on and the
strengthening of public financial management is due to an increased demand for transparency in
the way public funds are used the realization of that Public Financial Management (PFM) is
pivotal to economic and developmental success.
The Kenya Vision 2030 (ROK, 2008) has a vision or Public service as “a citizen-focused and
results-oriented” institution serving a rapidly growing economy and society. Furthermore, Kenya
recognizes that a modern and results-focused public service is a pre-requisite for the country’s
socio-economic transformation as envisaged under Vision 2030. To this end, measures have been
initiated in order to improve public service delivery with the-government being one of them. The
Constitution sets out the overall guidelines on the management of public resources and provides
for enactment of specific legislation to give effect to the same.
The Strategy for Public Finance Management Reforms in Kenya 2013– 2018 (ROK, 2013)
provides a framework for implementing reforms envisaged in the Constitution, the Public
Finance Management Act 2012 and other Public Finance legislation (enacted pursuant to the
provisions of Chapter 12 of the Constitution), as well as taking forward the reform agenda started
under the 2006-2011 PFM strategy. Kenya has been implementing a broad-based public reform
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program partly founded on an e- Government vision which was officially articulated in 2004
with the adoption of the E- Government Strategy. Numbers of institutions have been setup to
help in the attainment of this vision such as the Kenya E-Government Secretariat and solutions
adopted such as Integrated Financial.
The IFMIS Re-Engineering Strategic Plan 2011-2013, said that the development of the IFMIS an
Oracle based Enterprise Resource Planning (ERP) Software, started in 1998 whilst deployment
of the system to line ministries, Accounts Payable, Accounts Receivable, General Ledger and
Cash Management as well as supplying analytical tools. There port says that this system has been
deployed inline Ministries and the IFMIS Re-Engineering Strategic Plan 2011-2013 states that in
line with the Public Financial Management Act 2012 (Article12), the IFMIS has been
implemented to connect all Government Ministries, agencies and departments to a core network
for purposes of effecting a single public financial management system, there has been
stabilization of three accounting modules i.e. General Ledger, Purchasing Order and Accounts
Payable and activation of additional modules such as cash management, accounts receivables,
and fixed assets.
The report further states that there has been the development of a new Single Chart of Accounts
(SCOA) mapped into the IFMIS system and the 2012-2013 National budgets developed using
the new SCOA. The district Vote book system was also updated with the new SCOA. IFMIS has
also developed and implemented Plan to Budget system that has enhanced the efficiency and
effectiveness of budget making which was used to develop the revised budget in December
2012. A Procure to pay system is under development and once fully implemented, the full
procurement process from planning, requisition, procurement of goods and services, and
payment of suppliers was be automated. Finally, an IFMIS Academy has been established to
build capacity of IFMIS end users in Ministries, Departments and Agencies.
Possible Factors
The implementation of IFMIS is said to be a complex, risky, resource –intensive process that
requires major procedural changes and often involves high-level officials who lack incentives for
reform. Chene asserts that indeed IFMIS implementation demands a commitment for change.
Rodin-Brown, (2008) argues that three some institutional challenges that hinder effective
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implementation of IFMIS. This is supported by the assertion that the introduction of IFMIS
involves more than only automation of public finance tasks and processes.
There are a number of institutional issues that should be anticipated and planned. These include
organizational arrangements, the legal framework, and business functional processes amongst
others. This research proposal is expected to examine factors affecting IFMIS across the central
government, the Judiciary, Parliament, Local Authorities, Disciplined Forces, and State
Corporations – shows that the basic pay in central government is substantially lower for the same
educational qualifications, experience and ability. The implementation of a new or upgraded
system in your distribution operations can be a daunting task. Many things can lead a system
project off track. To prevent this, consider five key project components that have proven
effective in providing successful outcomes to these implementations.
Upper management is always involved in the financial support of a systems project. Some
executives focus only on the financial justification and the payback of the project. However, the
key to a successful implementation is to also convince them of the business advantage of a
systems change. Success of the project depends on the executive team believing that the new
system was providing the company with a new competitive advantage to service customers
better.
When that belief is in place, executive sponsors can champion the project when it hits its
inevitable rough spots. They can effectively allocate additional resources to shore up tasks falling
behind, arbitrate differences in a timely manner and reinforce expectations during conversion.
They can spread the energy and excitement about what this change was mean to all involved.
The National Treasury of Kenya introduced the Integrated Financial Management Information
System (IFMIS), as part of PFM reform initiatives aimed at automating and streamlining,
Government’s Financial Management processes and procedures. The subsequent IFMIS Re-
engineering Strategic Plan (2013-2018) of the National Treasury of Kenya was developed by the
progress of implementation and the changes in the Government structure. The focus of the
second Strategic Plan was to ensure optimal use of the system in national and county
governments in contribution towards efficient and effective management of public funds.
Problems prior to IFMIS Re-engineering included frequent system shutdown due to lack of
professional support and inefficient infrastructure, insufficient networking, insufficient strategic
focus, limited system ownership and less than optimal human resource development to support
system users. The National Youth Service (NYS) lost about Sh1.5 billion to firms in a scandal
that is currently under investigation by the National Assembly’s Public Accounts Committee.
IFMIS has led to delaying salaries due to frequent shutdown. IFMIS connectivity has slowed
down approval of procurement requests. This phase of implementation is on-going, with
concurrent implementation of the IFMIS Security solution. Miheso (2013) studied the adoption
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MAIN OBJECTIVE
The broad objective of the study was to assess the factors that affect the implementation of the
Integrated Financial Management Information system in Public Sector in Kenya.
SPECIFIC OBJECTIVES
THEORETICAL FRAMEWORK
Diffusion of innovation (DOI) theory was developed by Rogers (1962), and is argued to be one
of the oldest social science theories. It originated in communication to explain how, overtime, an
idea or product gains momentum population or social system. The end result of this diffusion is
that people, as part of a social system, adopt a new idea, behavior, or product. Adoption means
that a person does something differently than what they had previously (that is, purchase or use a
new product, acquire and perform a new behavior, etcetera). The key to adoption is that the
person must perceive the idea, behavior, or product as new or innovative. It is through this that
diffusion is possible (Sahin, 2006).
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Adoption of a new idea, behavior, or product (that is, innovation) does not happen
simultaneously in a social system; rather it is a process whereby some people are more apt to
adopt the innovation than others. When promoting an innovation to a target population, it is
important to understand the characteristics of the target population that was help or hinder
adoption of the innovation (Rodgers, 2003). According to Medlin (2001), Rodger’s theory of
innovation’s diffusion is the most appropriate in understanding the adoption of a given
technology. In the context of the current study, therefore mentioned theory enables the
investigation of adoption of IFMIS by County Governments. As Rodgers posts, adoption is a
decision of full use of an innovation as the best course of action available, while rejection is a
decision not to adopt an innovation. This reasoning was be applied to explain embracing of and
resistance to IFMIS in County Governments.
In Partnership with Rodgers theory, four main elements in the diffusion of innovation sought to
be understood. These are the innovation, communication channels, time, and social system
(Sahin, 2006). As Rodgers (2003) defined, an innovation is an idea, practice, or project that is
perceived to be new by an individual or other unit of adoption. In this light, County Governments
regard IFMIS as an innovation since it fits the fore mentioned description. Communication is
asserted to be the process in which participants create and share information with one another
with the aim of reaching a mutual understanding. Communication is occurring through channels
between sources. To enhance the diffusion of IFMIS in County Governments, it should be
ensured that the system is communicated through the most effective channels. It is further
observed that innovation diffusion process includes a time dimension. More so, the nature of
social system affects individuals’ innovativeness, which is argued to be the main criterion or
categorizing adopters.
It is re commended that, as one way of enhancing the diffusion of a technology (or innovation), it
is of particular importance to understand the innovation decision process. The process entails
five phases which include knowledge, persuasion, decision, implementation, and confirmation
phases (Rodgers, 2003). The current study sought to investigate how the respective users are
informed of the introduction of IFMIS in the system of County Governments. Also, it would be
ration to understand how the elements of relative advantage. The above theory relates to the
effect of cooperate culture on implementation of Integrated Financial Management Information
System.
Social learning theory is a theory of learning and social behavior which proposes that new
behaviors can be acquired by observing and imitating others. It was proposed by Albert Bandura
(1977).This is a theory of learning and social behavior which proposes that new behaviors can be
acquired by observing and imitating others. It states that learning is a cognitive process that takes
place in a social context and can occur purely through observation or direct instruction, even in
the absence of motor reproduction or direct reinforcement. In addition to the observation of
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behavior, learning also occurs through the observation of rewards and punishments, a process
known as vicarious reinforcement. When a particular behavior is rewarded regularly, it was most
likely persisting; conversely, if a particular behavior is constantly punished, it was most likely
desisting. The theory expands on traditional behavioral theories, in which behavior is governed
solely by reinforcements, by placing emphasis on the important roles of various internal
processes in the learning individual. The above theory relates to the effect of training on
implementation of Integrated Financial Management Information System.
Initial development of the theory was undertaken by Delone and McLean (1992) basing it from
an earlier research on communications by Shannon and Weaver. This theory seeks to provide a
comprehensive understanding of IS success by identifying, describing, and explaining the
relationships among six of the most critical dimensions of success along which information
systems are commonly evaluated. The earlier model advances six key pillars of Information
Systems success i.e. System Quality, Information Quality, Use, User Satisfaction, Individual
Impact as well as Organizational Impact. The above theory relates to the effect of information
communication technology on implementation of Integrated Financial Management Information
System. This relates to whether the introduction of IFMIS has been successful in Public Sectors.
Using the six critical dimensions of IS success: information quality, system quality, system
use/usage intentions, user satisfaction, and net system benefits.
Resource based Theory argues that a firm has the ability to achieve and sustain competitive
advantage if it possesses resources that are valuable, rare, imperfectly imitable and non-
substitutable (Berrchicci, 2013). Initiated in the mid-1980s by Wernerfelt (1984) the resource-
based view (RBV) has since become one of the dominant contemporary approaches to the
analysis of sustained competitive advantage. The supporters of these arguments argue that
organizations should look inside the company to find the sources of competitive advantage
instead of looking at competitive environment for it (Vogel & Guttel, 2013). The resource-based
view is based on the idea that the effective and efficient applications of all useful resources that
the company can muster helps determine its competitive advantage.
The goal of an organization is to ensure it has access to and control of valuable resources by
developing and securing all the relevant resources either internally or externally. The source of
an organization’s competitive advantage lies mainly in how it exploits its distinctive internal
resources and competencies, by setting strategic objectives based on what they enable it do. The
above theory relates to the effect of cost on implementation of Integrated Financial Management
Information System.
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Rozner (2008) and Rodin-Brown (2008), assert that the most convenient method of overcoming
change resistance is by ensuring that there is clear communication, education and training and
also via ’quick wins’ that demonstrate the benefits of the change. Communication can be
executed through a variety of media, seminars, workshops, training sessions, organization’s
website, conferences and/or newsletters. Through the IFMIS Re-engineering process as outlined
in the Kenya’s IFMIS Re-Engineering Strategic Plan2011–2013, the Kenyan government hopes
to address the change management and communication challenges previously experienced in the
pilot phase of IFMIS implementation, which greatly contributed to lack luster performance of the
system.
The strategic plan identifies the political, administrative and capacity constraints that require
rigorous interventions with the object of securing the buy-in and ownership attributes necessary
within Government Ministries, Departments and Agencies (MDAs) to facilitate effective IFMIS
implementation and improve the confidence of all relevant stakeholders (ROK, 2010). The
Kenya’s IFMIS Re-Engineering Strategic Plan incorporates a change management strategy
(CMS) and recommended approaches for effective re-launch of the IFMIS components. The
CMS is drawn from lessons learnt from past IFMIS implementation experiences, as well as best
global practices for similar financial systems re-engineering programs or projects. The CMS’s
main object is to guarantee the requisite buy-in from all stakeholders and ensure that all
stakeholders work together in concert to successfully implement and sustain the IFMIS Re-
engineering process (ROK, 2010). Every organization has asset of unstated rules by which the
transformation process is managed. The IFMIS Re-engineering process was align the IFMIS.
It is not worthy that according to Brar (2010), low capacity for system implementation at the
sub-national level such as provincial and regional governments is one of the main challenges in
the implementation of the IFMIS in developing countries. This factor according to him is very
pertinent to the South African context with its nine provinces and the consequent demand that
the duplication of efforts creates for skills and knowledge, of which a shortage already exists.
Farelo & Morris (2006) further contend that the personnel development issue within government
needs prioritization, the education system needs to be aligned with the information and
communication technologies (ICT) demands of the country and scarce ICT skills need to be
attracted and retained particularly within the government.
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The external consultant should have extensive experience in the public sector financial
management. The consultant should essentially be an expert in design, implementation,
management and operation of government accounting, budget and financial management
systems especially in a developing country’s environment. He or she must have experience in the
management and operation of modern computerized financial systems in a government
budgeting and accounting environment. Complementary experiencing training, management
development, human resource management and organizational change in developing countries
ought also to be a prerequisite. The consultant, finally, should also have experience in project
management and implementation, working in the advisory and training capacity in developing
countries. The Scholars caution that the consultants need to be managed closely since they may
be inclined towards pursuing their own interests to the detriment of the institution’s IFMIS
objectives (Diamond & Khemani, 2006).
Murphy (2004) notes that weak human resource management and management capacity has been
responsible for the derailment of IFMIS implementation in Kenya. Systems improvements (that
is, macro model, MTEF, performance budgeting, cash management, IFMS, payroll / personnel
systems) are typically undermined by failure to address complimentary human resource (man
power planning, recruitment, incentives, training), organizational restructuring and improved
management capacity (delegation, middle management empowerment, team building).He further
posts that IFMIS implementation is hindered by over-complex change projects requiring high
levels of technical and management capacity. According to ROK (2010), the Kenya’s IFMIS Re-
Engineering Strategic Plan 2011–2013 has identified appropriate capacity building for system’s
sustainability, competent firms and consultants supporting the implementation as some of the
key success factors for the IFMIS Re-Engineering Strategy. Kwena (2013) in his study of
Kenya’s ministries found that the capacity and technical l know how was low due to lack of
training and hurried implementation of the system. Here commends that the users of the system
need to undergo on-the-job training in order to improve their skills and capacity to use the
system.
The scope and functionality of IFMIS canary from basic general ledger accounting application to
a comprehensive system covering budgeting, accounts receivable or payable, cash management,
commitment control, debt, assets and liability management, procurement and purchasing,
revenue management, human resource management and payroll (Rozner, 2008). Its role is to
connect, accumulate, process and then provide information to all parties in the budget system on
a continuous basis (Diamond & Khemani, 2006). It is therefore imperative that the system should
be able to provide the required information timely and accurately, because if it does not it was
not be used and cease to fulfill its central function as a system.
An IFMIS can improve public financial management in a number of ways, but generally seeks to
enhance confidence and credibility of the budget through greater comprehensiveness and
transparency of information. The purpose of using an IFMIS is to improve budget planning and
execution by providing timely and accurate data for budget management and decision-making
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(Chêne, 2009). A more standardized and realistic budget formulation process is allowed for and
improved control over budget execution is affected through the full integration of budget
execution data.
RESEARCH METHODOLOGY
Research Design
The researcher adopted Descriptive Research Design. Descriptive Research Design involves
measuring a set of variables as they exist naturally (Gravetter & Forzano, 2011) and seeks to
provide answers to immediate questions about a Current State of affairs (Matthews & Kostelis,
2011). Descriptive research design is suitable because it minimizes bias and maximize reliability.
According to Denscombe (2007), descriptive design emphasizes on producing Database done
real world observation through a purposeful and structured approach. Researchers can draw
inferences about relationships between variables from related variations so find dependent and
independent variables (Polit & Beck, 2001). Descriptive Research Design was used because of
its ability to provide a snapshot of the current state of affairs. In this study, the major variables
that studied was be factors that affect the implementation of the Integrated Financial
Management Information System [IFMIS] in Public Sector.
Study Population
A population is the total set of elements about which a researcher wishes to make some
inferences; where population elements refer to the subject on whom the measurement is being
taken (Cooper & Schindler, 2005). The population of the study is 45 state departments in 21
ministries currently implementing the IFMIS.
Saunders, Lewis and Thorn hill (2009), define the sampling frame as the complete list of all the
cases in the population from which a probability sample is drawn. Stratified random sampling
method was be used to select a sample of 45 State department representatives. The sampling
frame describes the list of all population units from which the sample was be selected. The
sampling technique was be appropriate since the population is divided into subgroups. Sample
size may be defined as a small section of apart that represents the larger whole (Saundersetal
2009). Hence, the 45 sample units were based on proportionate representation of the total
population. The target population of the study was 45 government departments which is small
and easily accessible. The study therefore included all the 45 state departments in the study
hence a census. Saunders (2009) argued that in situations where the population is small and
below 100, a census study would be more appropriate for the purposes of generalizing the
findings to the entire population.
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Data collection method was Primary Data gathered directly from respondents through
Questionnaires whereas secondary data was got from published reports. The business
dictionaries. Com (businessdictionary.com, 2013) define as a Questionnaire as a list of a research
or survey questions asked to respondents, and designed to extract specific information and that it
serves four basic purposes which are to collect the appropriate data, to make the data comparable
and amenable to analysis, to minimize biasing formulating and asking question, and to make
questions engaging and varied. To determine the extent of IFMIS adoption data in the
questionnaire is collected using a Likert scale to determine the extent of adoption of different
modules of IFMIS. To establish the challenges faced in the adoption of IFMIS, data in the
questionnaire is also collected using a Likert scale. To establish the determinants in adoption of
IFMIS data was be collected using a 5-point scale.
Data analysis was done using Descriptive Statistics to compute percentages of the outcomes and
draw bar and pie charts to show the outcomes of extent of IFMIS adoption and challenges of
IFMIS adoption in Kenya. The descriptive statistical techniques which were used include mean
and standard deviation as well as percentage frequencies. Descriptive statistics enable the
researcher to summarize and organized attained effective and meaningful way and provide tools
for describing collections of statistical observations and reducing information to an
understandable form. Inferential statistics were used to make decisions or inferences for example
correlation analysis, by interpreting the data patterns to establish the determinants in the adoption
of IFMIS by the National Government in Kenya. The procedure for data analysis began by first
coding and entering the data in the Statistical Package for the Social Sciences (SPSS), computer
software used for analyzing data. Coding, in essence, entails the attribution of a number to a
piece of data, or group of data, with the express aim of allowing such data to be analyzed in
quantitative terms (Denscombe, 2007). The factors affecting implementation of integrated
financial management was tested using linear regression analysis. Linear regression model was
be applied as shown below:
Before carrying a regression analysis, the researcher conducted diagnostic tests to determine the
suitability of data set for regressing. The diagnostics were used to test if the general information
of the respondents how it affects the main objective of the study implementation of intergraded
financial management information. These diagnostic tests included Multicollearity, Normality,
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and Heteroscedasticity. Normality test was done using Kurtosis and Skewness. Data analysis
proceeded if the kurtosis and skewness is between +2 and -2 as this was an indicator that the data
has a Normal distribution (Kothari, 2004). Multicollinearity was checked using the Variance
Inflation Factor VIF, to show how the variables are correlated. If VIF is between 1-5, the
variables were not correlated and hence the test deemed it valid. Heteroscedasticity test was
useful in examining whether there was difference in residual variance of the observation period
to another period of observation (Godfrey, 2008), and it was done using scatter plot.
RESEARCH RESULTS
The main objective of the study was to assess the factors that affect the implementation of the
Integrated Financial Management Information system in Public Sector in Kenya. The study was
guided by the following specific objectives: to examine the effect of Information Communication
Technology on implementation of IFMIS systems in Public Sector. To establish how cost affects
the implementation of IFMIS systems in Public Sectors. To investigate how Capacity Building
and Training affects the implementation of IFMIS systems in Public Sectors. To investigate how
Corporate Culture affects the implementation of IFMIS systems in the Public Sector. The study
adopted descriptive research design to establish the effect the implementation of the IFMIS. The
population of the study was 45 state departments in 21 ministries currently implementing the
IFMIS. Stratified random sampling method was be used to select a sample of 45 State
department representatives. Data collection method was Primary Data gathered directly from
respondents through Questionnaires whereas secondary data was got from published reports.
Data collection method was Primary Data gathered directly from respondents through
Questionnaires whereas secondary data was got from published reports. The descriptive
statistical and inferential statistics techniques was used.
The study found out that majority of the respondents agreed that IFMIS had improved the
effectiveness and efficiency of public expenditure programs as supported by a mean of 3.946
with standard deviation of 0.918. Majority of the respondents agreed that the implementation of
IFMIS work performance had improved as supported by a mean of 3.836 with standard deviation
of 0.816. Majority of the respondents agreed that that since the implementation of IFMIS, there
was enhanced confidence and credibility of the State Departments’ budget as supported by a
mean of 3.792 with standard deviation of 0.836. The study further established that majority of
the respondents agreed that they were comfortable with the introduction of IFMIS as supported
by a mean of 3.639 with standard deviation of 0.928. Majority of the respondents agreed that
built- in features within IFMIS facilitated effective monitoring and evaluation of State
Department’s effectiveness as supported by a mean of 3.527 with standard deviation of 0.856.
Respondents agreed that IFMIS was upgraded to improve their performance as supported by a
mean of 3.538 with standard deviation of 0.794. Majority of the respondents moderately agreed
that IFMIS had negatively affected their job performance as supported by a mean of 2.981 with
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standard deviation of 0.972. The findings of regression analysis established that corporate culture
significantly influenced implementation of IFMIS.
The study found out that majority of the respondents agreed that they can easily access non-
financial information such as employee number and cadre by a mean of 4.085 with standard
deviation of 0.926. Majority of the respondents agreed that they can easily extract and present
data from IFMIS in ways that facilitated analysis as shown by a mean of 3.958 with standard
deviation of 0.973. Respondents agreed that the IFMIS modern ICT equipment enabled them to
generate custom reports for internal and external use as supported by a mean of 3.938 with
standard deviation of 0.783. Respondents agreed that there were inbuilt analytical tools within
IFMIS that enables trend analysis of various elements of fiscal operations at the State
Department as supported by a mean of 3.839 with standard deviation of 0.848. The study pointed
out that majority of the respondents agreed that information security risks in IFMIS affected
specific information they required to carry out their work as shown by a mean of 3.746 with
standard deviation of 0.837. Respondents agreed that through IFMIS computer technologies,
they were able to reconcile transactions data in real time as supported by a mean of 3.682 with
standard deviation of 0.916. Majority of the respondents moderately agreed that IFMIS
accurately disclosed the financial position of the State Department as supported by a mean of
3.381 with standard deviation of 1.084. The finding of regression analysis further established that
ICT infrastructure influenced implementation of IFMIS in public sectors.
The findings show that majority of the respondents agreed that staff training enabled them feel
motivated to deliver better on their job as supported by a mean of 3.983 with standard deviation
of 0.918. Majority of the respondents agreed that training policy within IFMIS facilitated
effective monitoring and evaluation of State Department’s effectiveness as supported by a mean
of 3.983 with standard deviation of 0.811Respondents agreed that they had enough skills and
knowledge to implement the use of IFMIS as supported by a mean of 3.918 with standard
deviation of 0.837. Majority of the respondents agreed that since training of IFMIS, there was
enhanced confidence and credibility of the State Departments’ budget as supported by a mean of
3.879 with standard deviation of 0.981. The study pointed out that majority of the respondents
agreed that after going through training there was a positive change in job behavior as supported
by a mean of 3.866 with standard deviation of 0.928. Majority of the respondents agreed that the
ministry had enough capacity to effectively promote use of IFMIS as supported by a mean of
3.847 with standard deviation of 0.938. Majority of the respondents agreed that training on
IFMIS had improved the effectiveness and efficiency of public expenditure programs as
supported by a mean of 3.664 with standard deviation of 0.973.The findings of regression
analysis further established that capacity building significantly influenced implementation of
IFMIS in public sectors.
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The study found out that respondents agreed that IFMIS enabled them to trace all stages of
transaction processing in the State Department as supported by a mean of 4.082 with standard
deviation of 0.876. Majority of the respondents agreed that IFMIS had automated procedures and
internal controls which promoted accountability as supported by a mean of 3.961 with standard
deviation of 0.838. Majority of the respondents agreed that IFMIS made bank reconciliation
automatic thus allowing a closer monitoring of outstanding bill and cash in bank account as
supported by a mean of 3.928 with standard deviation of 0.732. Respondents agreed that IFMIS
had ensured that the State Department budget was executed in accordance with the rules to
prevent overspending as supported by a mean of 3.684 with standard deviation of 0.917. The
study further pointed out that majority of the respondents agreed that IFIMIS had streamlined
procedures and significantly reduced opportunity for corruption as supported by a mean of 3.586
with standard deviation of 0.942. Majority of the respondents moderately agreed that all State
Departments transactions, both receipts and payments were processed through IFMIS as
supported by a mean of 3.436 with standard deviation of 0.958. Respondents moderately agreed
that IFMIS had led to significant reductions in wasteful expenses and irregular expenditure as
supported by a mean of 3.428 with standard deviation of 0.834. The findings of regression
analysis further established that costs positively influenced implementation of IFMIS in public
sectors.
DIAGNOSTIC TESTS
The researcher conducted normality test to establish whether the datasets are normally modeled
by a normal distribution. The researcher used skewness and kurtosis to establish the normality of
the datasets. The findings are as shown in Table 1.
N Skewness Kurtosis
Statistic Statistic Std. Error Statistic Std. Error
ICT infrastructure 148 -.633 .199 .718 .396
Costs 148 -.597 .199 .256 .396
Corporate Culture 148 -.412 .199 .376 .396
Capacity Building and Training 148 -.351 .199 -.148 .396
The findings established that ICT infrastructure had a skewness of -0.633 and kurtosis of 0.718.
Cost had a skewness of -0.597 and kurtosis of 0.256, corporate culture had a skewness of -0.412
and kurtosis of 0.376 and capacity building and training had a skewness of -0.351 and kurtosis of
-0.148. The findings show that all the coefficients were ranged between +2 or -2 an indication
that all the variables were both skewed and kurtotic. The researcher conducted multicollinearity
test to establish whether the variables were highly correlated. This was measured by use of
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Variance Inflation factor (VIF) not to be more than 10 while the equivalent for tolerance, not to
be less than 0.1 (Okelo, Namusonge and Iravo, 2015). The findings are as shown in Table 2.
Collinearity Statistics
Model Tolerance VIF
ICT infrastructure .982 1.018
Costs .317 3.150
Corporate Culture .764 1.309
Capacity Building and Training .338 2.957
The findings in Table 2 show that ICT infrastructure had a VIF of 1.018, costs had a VIF of
3.150, corporate culture had a VIF of 1.309 and capacity building and training had a VIF of
2.957. The findings show that all the variables had a VIF coefficient of less than 10 an indication
that the variables were not correlated. This agrees with Okelo, Namusonge and Iravo (2015) who
established that Variance Inflation factor (VIF) not more than 10 is sufficient for the study.
Figure 1: Heteroskedasticity
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The researcher conducted heteroskedasticity test to establish whether the standard errors
estimates were biased. The researcher used scatter plots to establish the relationship the presence
of heteroskedasticity. The findings are as shown in Figure 1.
The findings in Figure 1 show that the dataset was concentrated forming a pattern. This implies
that the datasets were not heteroscedastic hence homoscedastic an implication that the data set
were not correlated which is desirable for modelling of the regression model.
INFERENTIAL STATISTICS
The researcher carried out multiple regression analysis to establish the factors that affect the
implementation of the Integrated Financial Management Information system in Public Sector in
Kenya. The findings of Model Summary, ANOVA and Regression Coefficients are as shown in
Table 3.
Unstandardized Standardized
Coefficients Coefficients
Std.
Model B Error Beta t Sig.
(Constant) 6.468 .201 32.179 .000
Corporate Culture 1.052 .612 .138 1.719 .000
ICT infrastructure .923 .125 1.096 7.384 .000
Capacity Building and Training .414 .117 .107 3.538 .000
Costs .324 .091 .123 3.560 .000
2 2
R=0.878 R =0.856 Adj R =0.851 Std. error=.0805 F=47.562 Df= (4,36) Sig=.00
a. Dependent Variable: Implementation of IFMIS
Table 3 shows that coefficient of correlation was 0.878 an indication that the study variables
significantly influenced implementation of IFMIS. Coefficient of adjusted determination was
0.851 which translates to 85.1%. This indicates that variations in dependents variable was
explained by the independent variables (ICT infrastructure, costs, corporate culture and capacity
building and training). The residual of 14.9 % can be explained by other factors beyond the
scope of the current study.
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From the findings, when all factors (ICT infrastructure, costs, corporate culture and capacity
building and training) were held constant, implementation of IFMIS would be at 6.468. A unit
increase in corporate culture when all the other factors were held constant, implementation of
IFMIS would be at 1.052. A unit increase in ICT infrastructure when all other factors were held
constant, implementation of IFMIS would be at 0.923. A unit increase in capacity building and
training when all the other factors were hold constant, implementation of IFMIS would be at
0.414. A unit increase in costs when all other factors were held constant, performance would be
at 0.324.
The study pointed out that corporate culture positively and significantly influenced
Implementation of IFMIS as supported by (β= 0.138, t= 1.719 and p=0.00<0.05). This was
attributed to the following factors; implementation of IFMIS improved work performance of
state departments, staffs were comfortable with the introduction of IFMIS, IFMIS upgraded
staff’s performance and improved the effectiveness and efficiency of public expenditure
programs. IFMIS facilitated effective monitoring and evaluation of State Department’s
effectiveness. This is supported by Rozner (2008) and Rodin-Brown (2008) who assert that the
most convenient method of overcoming change resistance is by ensuring that there is clear
communication, education and training and also via ’quick wins’ that demonstrate the benefits of
the change.
The research findings revealed that there was a positive and a significant relationship between
ICT infrastructure and Implementation of IFMIS (β= 1.096, t= 7.384 and p=0.00<0.05). This
was due to the following factors; information security risks in IFMIS affected specific
information that staffs required to carry out their work, IFMIS computer technologies was able to
reconcile transactions data in real time and there were inbuilt analytical tools within IFMIS that
enables trend analysis of various elements of fiscal operations at the State Department. This is
supported by Wafula and Wanjohi (2009) who states that governments are undertaking ambitious
reforms to further revitalize or transform their public sectors IFMIS projects to have the basic
system functionality clearly specified from the onset of the intervention.
The study further established that capacity building and training had a positive and a significant
relationship with Implementation of IFMIS (β= 0.107, t= 3.538 and p=0.00<0.05). This was
attributed to the following factors; staff training enabled respondents to feel motivated to deliver
better on their job, the ministry had enough capacity to effectively promote the use of IFMIS,
enough skills and knowledge to implement the use of IFMIS was embraced and training on
IFMIS had improved the effectiveness and efficiency of public expenditure programs. Briar
(2010) argues that low capacity for system implementation at the sub-national level, such as
provincial and regional governments, is one of the major challenges in the implementation of
IFMIS in developing countries.
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The study established that cost had a positive and a significant relationship with Implementation
of IFMIS (β= 0.123, t= 3.56 and p=0.00<0.05). This was attributed to the following factors;
IFIMIS had streamlined procedures and significantly reduced opportunity for corruption. FMIS
had ensured that the State Department budget was executed in accordance with the rules to
prevent overspending. IFMIS enabled them to trace all stages of transaction processing in the
State Department. This is supported by Berrchicci (2013) states that a firm has the ability to
achieve and sustain competitive advantage regardless of the cost, possesses resources that are
valuable, rare, imperfectly imitable and non-substitutable hence increasing its productivity
levels.
CONCLUSIONS
The study concludes that corporate culture was the most significant variable that influenced
implementation of IFMIS in public sectors in Kenya followed by ICT infrastructure, then
capacity building and training and the least significant variable in the study was costs.
The study further concludes that implementation of IFMIS had led to improvement of work
performance. Public service staffs were comfortable with the introduction of IFMIS. IFMIS was
upgraded to improve their performance. IFMIS had improved the effectiveness and efficiency of
public expenditure programs. Public sector staffs were able to reconcile transactions data in real
time through IFMIS computer technologies. There were inbuilt analytical tools within IFMIS
that enables trend analysis of various elements of fiscal operations at the State Department.
There was enhanced confidence and credibility of the State Departments’ budget due training of
IFMIS. Staff training enabled the staffs to feel motivated to deliver better on their job. The
ministry had enough capacity to effectively promote use of IFMIS. IFMIS had ensured that the
State Department budget was executed in accordance with the rules to prevent overspending.
IFMIS enabled public sector staffs to trace all stages of transaction processing in the State
Department.
RECOMMENDATIONS
The study recommends that implementation of IFMIS ought to lead to improvement of work
performance. Public service staffs ought to be comfortable with the introduction of IFMIS.
IFMIS ought to upgrade to improve public service performance. IFMIS ought to improve the
effectiveness and efficiency of public expenditure programs. Public service ought to be enhance
confidence and credibility of the State Departments’ budget due implementation of IFMIS. Built-
in features within IFMIS ought to facilitate effective monitoring and evaluation of State
Department’s effectiveness.
The study recommends that public sectors staffs ought to easily extract and present data from
IFMIS in ways that facilitate analysis. Information security risks in IFMIS ought to affect
specific information that staffs requires to carry out on their work. Public sector staff’s ought to
able to reconcile transactions data in real time through IFMIS computer technologies. There
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ought to be inbuilt analytical tools within IFMIS that enables trend analysis of various elements
of fiscal operations at the State Department. Staffs ought to easily access non-financial
information such as employee number and cadre. IFMIS modern ICT equipment ought to enable
public sector staffs to generate custom reports for internal and external use and IFMIS ought to
accurately disclose the financial position of the State Department.
The study further recommends that training policy within IFMIS ought to facilitate effective
monitoring and evaluation of State Department’s effectiveness. State departments ought to
enhance confidence and credibility of the budget due training of IFMIS. Staff training ought to
enable the staffs to feel motivated to deliver better on their job. The ministry ought to have
enough capacity to effectively promote use of IFMIS. Public service staffs ought to have enough
skills and knowledge to implement the use of IFMIS. There ought to be a positive change in job
behavior after undergoing training. Training on IFMIS ought to improve the effectiveness and
efficiency of public expenditure programs.
The recommends that IFIMIS ought to have streamlined procedures and significantly reduce
opportunity for corruption. IFMIS ought to ensure that the State Department budget is executed
in accordance with the rules to prevent overspending. IFMIS enabled public sector staffs to trace
all stages of transaction processing in the State Department. IFMIS ought to make bank
reconciliation automatic thus allowing a closer monitoring of outstanding bill and cash in bank
account. IFMIS ought to have automated procedures and internal controls which promotes
accountability. All State Departments transactions, both receipts and payments ought to be
processed through IFMIS. IFMIS ought to lead to significant reductions in wasteful expenses and
irregular expenditure.
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