10 May 2017

Kenya: Auditor's Claims of Rot in Health Ministry Surface As US Stops Funding

Photo: Charles Lwanga/The Nation
Kilifi County Hospital Laboratory officer Raphael Nella, right, explains how the facility operates to Governor Amason Kingi, centre, and visiting officials from the US congress on October 27, 2016. The officials were inspecting projects funded by World Vision through USAid.

In a July 12, 2016 letter, former Health Principal Secretary Nicholas Muraguri expressed his concern that one man's activities were drawing the ire of donors.

He therefore asked National Treasury Cabinet Secretary Henry Rotich to transfer internal auditor Bernard Muchere.

This was just months after Dr Cleopa Mailu, the Health CS, had ordered an audit in the ministry.

Now a PS in the Lands ministry since March, Dr Muraguri argued that Mr Muchere lacked the skills and experience for the job.

This is despite the auditor having earned a reputation of unearthing scams -- such as the scandal at the Kilifi-based Ronald Ngala Utalii College and the Sh791 million theft at the National Youth Service.


He was also in the team that blew the cover on the Sh1.5 billion Tokyo Embassy scam.

"The purpose of this letter, therefore, is to request for posting of internal auditors in senior positions who are conversant with audit of donor projects and other funds," wrote Dr Muraguri.

Dr Muraguri's jitters about discontentment of donors seemed to have been confirmed on Monday, when the United States suspended its funding to several projects under the ministry. US Ambassador to Kenya Robert Godec attributed the decision to lack of accountability.

That Dr Muraguri did not copy Dr Mailu in the letter is just one bullet point in the litany of the rot in the ministry in 2015-2016, then under current Transport CS James Macharia.


Then Director of Medical Services, Dr Muraguri was elevated to the top echelons of the ministry on the same day as Dr Mailu -- in November 2015, when President Uhuru Kenyatta reshuffled his Cabinet, firing five ministers.

When Mr Muchere's draft report was leaked to the media in October last year showing the ministry could have lost at least Sh5 billion in shady transactions, there was an immediate contrast between Dr Muraguri and Dr Mailu.

Dr Muraguri, who did not deny the existence of the report, threatened a Business Daily journalist who confronted him with the facts.

The CS was initially defensive but later spoke against it.

Among the flagged items were two supplementary votes of Sh900 million -- one under the National Aids Control Programme and the other the Curative and Rehabilitative Health Services.


The US being a major donor to anti-Aids initiatives to fight the Aids scourge in Kenya, the questionable expenditure may have contributed to Monday's action.

Audit queries included Sh265.7 million paid to Co-operative Bank for "food and rations" from the NACP's Food and Rations recurrent vote yet civil society organisations later said they had not received supplements for four years, contrary to records.

There was also diversion of Sh889 million for county governments to support the free maternity programme.

The ministry closed FY 2015/16 with Sh2.4 billion in pending bills -- a huge anomaly given the government's cash-based accounting system.

With Senate hearings and pressure from various quarters, entities said to have reaped from the gravy train emerged.

They included the shady Estama Investments to Esaki Ltd, associated with former Ethics and Anti-Corruption Commission chairman Philip Kinisu.

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