Kenya: Special Audit Reveals Misuse of Covid-19 Funds By Counties

26 February 2021

Auditor-General Nancy Gathungu has exposed mismanagement of Covid-19 funds by county governments, citing delays to procure critical supplies that might have exposed the public to infections.

A special audit conducted by her office on the utilisation of funds by county governments raises questions on the legality of items procured to fight the pandemic and recommends that the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations investigates the issue to establish criminality in the inventory management of the Covid-19 related items.

At the height of the pandemic, the national government advanced Sh7.7 billion to the counties in conditional grants as part of urgent Covid-19 interventions.

The funds included Sh5 billion as conditional grants, Sh2.3 billion as allowance for frontline health workers and grants from Danida totalling Sh350 million.

But in a damning report, Ms Gathungu says that other than the allowances for the frontline health workers and own county source revenue, the county governments had not utilised the grants as at July 31, 2020.

"This implies the absence of proper planning and inadequate preparation by county governments to respond to Covid-19 risks," Ms Gathungu says in the report.

The special audit, which was ordered by the Senate to review spending of the Covid-19 funds, reveals that at least 36 counties lacked work, training or procurement plans. Another 23 lacked approved budgets.

The report notes that the Sh2.3 billion was not sufficient to cater for the allowances for frontline health workers in all the 47 counties since some employees had not been included in the allocation sent by the national government.

The audit found records from Kenya Medical Supplies Authority (Kemsa) and receipts by county governments had inconsistencies between quantities supplied by Kemsa and quantities received by counties. These included Bomet, Elgeyo Marakwet, Embu, Kakamega, Kericho, Nandi, Narok and Nyeri.

The report shows that nearly three quarters of the counties had not achieved the 300-bed capacity required to set up isolation /quarantine centres in line with the presidential directive.

While the law requires heads of procurement to generate and conduct market surveys for items procured under alternative procurements other than open tender, the audit noted that county governments did not conduct market surveys to inform placement of orders of the equipment.

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