Nairobi — The Office of the Auditor General (OAG) on Wednesday described the use of direct procurement by the Kenya Medical Supplies Agency (KEMSA) without adherence to applicable laws, recommending the cessation of further payments to avert loss of public funds.
The recommendation was contained in a preliminary report requested by the Joint Senate Health and COVID-19 Committee which had given the OAG until October 15 to conclude a probe into alleged embezzlement of public resources for the procurement of supplies to support virus containment efforts.
Auditor General Nancy Gathangu said further processing of COVID-19 related claims should be halted until an independent audit is done to confirm legitimacy of the claims.
In her preliminary report on the utilization of funds at the national medical supplier, Gathungu established that the taxpayer stands to lose close to Sh2.3 billion due to KEMSA’s failure to follow laid down procurement regulations.
Gathungu said the on-going audit had further established that KEMSA management went against advice from the Health Principal Secretary Susan Mochache and used funds which had been ring-fenced for the implementation of Universal Health Coverage.
“During the period under review, KEMSA irregularly utilized Universal Health Coverage and Capital Budget to procure COVID-19 related items worth Sh7,632,068,588 without evidence of approval of the budgets by relevant authorities,” she said.
“The procurement process 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.”
The Auditor General noted some of the companies that were awarded the contract were established in January and February 2020, pointing to possible collusion.