Treasury tightens scrutiny on State suppliers

The National Treasury is seeking to enlist suppliers of goods and services in a master database in a bid to raise transparency and cut costs in procurement. FILE PHOTO | SHUTTERSTOCK

The National Treasury is seeking to enlist suppliers of goods and services in a master database in a bid to raise transparency and cut costs in procurement.

The Treasury is looking for a consultant to develop an item master database for the electronic-Government Procurement (e-GP) system where the State will have visibility of the spend analysis per item per procuring entity.

The e-GP system will be linked to the iTax system, Business Registration system, Integrated Financial Management Information System (IFMIS) and the National Council for Persons with Disability for faster verification and flagging of corrupt dealings.

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“The National Treasury intends to procure services of a consultancy firm to develop an item master database for the e-GP system,” Treasury says in the notice calling for interested consultants to apply by April 21.

At the heart of an e-GP system is its item master where every item is classified properly and structured with the appropriate attributes.

This standardisation is what enables the e-GP system to effectively analyse purchases at the item level, bringing visibility to spending analysis, thus promoting cost-effective procurement.

Treasury plans to roll out the e-GP system across all public entities, in compliance with the law on designing and prescribing an efficient procurement management system for the two levels of government to ensure transparent procurement and asset disposal.

Kenya’s e-GP system is modelled around the United Nations Standard Product and Service Code (UNSPSC) which is a global classification system of products and services.

The UNSPSC framework uses a multi-tiered categorisation system using the terms Segment, Family, Class, Commodity, and Business Function.

The consultant will be required to review all the items in the UNSPSC and align their description to conform to language and terminologies that are relevant to public procurement in Kenya.

The contract duration will be four months and the adviser will be mandated to conduct a survey in all the government economic sectors to identify the commonly used items.

The Kenya Revenue Authority (KRA) enforcement team has stepped up analysis of companies’ financial dealings, especially firms doing business with the national government and counties, to unearth tax cheats by matching their payments and income declared to the authority.

The authority notes tax evasion by county and State suppliers is mainly through faking invoices to inflate costs in a bid to cut duty obligations and failure by county governments to submit taxes withheld from the suppliers and employees.

Some government suppliers have also been filing nil returns even after earning taxable income.

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Running an end-to-end electronic procurement system will be a departure from the present tendering system which involves a lot of paperwork that has seen the taxman lose track of the billions involved in State tenders.

The e-GP system will be interoperable with other systems in both public and private sectors that are stakeholders in procurement.

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