Report: Sh7.6b meant for UHC was spent on Corona pandemic
Hillary Mageka @hillarymageka
A special audit on the procurement mess at the Kenya Medical Supplies Authority (Kemsa) has revealed that some Sh7.6 billion meant for the Universal Health Coverage plan was used to procure Covid-19 items without approval.
The report Auditor-General Nancy Gathungu tabled at the Senate joint committee on Health and Covid-19 shows that despite having no budget allocation, Kemsa issued commitment letters amounting to Sh7.9 million on Covid-19 related procurements.
Gathungu said the agency’s action contravened Section 53(8) of the Public Procurement and Disposal Act 2015 that prohibits accounting officers from initiating procurement proceedings without approved budgets.
“The procurement was not initiated based on need assessment and planning resulting in over-procurement of Covid-19 related stock worth Sh6.3 billion that is still being held at Kemsa warehouses, 97 per cent of the stock has been in the Kemsa warehouses for more than three months implying inadequate market forecasting and planning practices,” the auditor reported.
“Items were procured at a higher price compared to the current market pricing, implying that Kemsa may realise a loss of Sh2.3 billion if the products are to be sold at the current market price,” she added.
The special audit notes that UHC funds are specific programme funds planned and budgeted for by the Ministry of Health for Universal Health Coverage in counties.
The funds, therefore, do not form part of Kemsa capital budget, according to auditor.
During the 2019/20 financial year, the Kemsa board approved a total capital budget of Sh4.7 billion to finance capital operations at the agency.
However, according to auditors, there was no evidence upon the outbreak of the Covid-19 pandemic, the management and board of Kemsa either re-allocated any of the capital budget or requested for a supplementary capital budget to cater for the emerging Covid-19 related procurements.
“Therefore, the Kemsa capital budget for financial year 2019/20 did not have any allocation for Covid-19 related procurements,” the report said.
However, on June 12, Kemsa’s suspended chief executive Jonah Manjari sought Health Principal Secretary Susan Mochache’s approval to utilise UHC funds to pay for expenses incurred on emergency procurements for Covid-19 related procurements.
“This request was declined by the PS in her letter referenced MOH/FIN/1/4 VOL III (77) to Manjari,” the auditor said.
“There was, therefore, no approval by the Ministry of Health for Kemsa to utilise UHC funds to pay for expenses incurred on emergency procurements for Covid-19 related procurements.”