Auditor General puts Kemsa boss on the spot over Sh7.6bn fraud

The Auditor-General wants suspended Kemsa chief executive officer Johnah Manjari held to account over breach of procurement law and diversion of Sh7.6 billion meant for Universal Health Coverage (UHC) towards purchase of Covid-19 related items.

Auditor-General Nancy Gathungu wants the suspended Kenya Medical Supplies Agency (Kemsa) held responsible over seven counts of violation of the Public Procurement and Asset Disposal Act, 2015.

“Accountability in use of public resources is not set aside because there is emergencies. There are various violation in use of public resources spent on Covid-19 procurement,” Ms Gathungu said in a forensic audit report on procurement of Covid-19 items from March to September 2020.

The audit indicts Mr Manjari and other members of management for irregularly utilising UHC cash and Kemsa development budget to procure Covid-19 related items worth Sh7,632,068,588 without evidence of approval of the budgets by the Ministry of Health and the National Treasury.

President Uhuru Kenyatta’s universal access to healthcare under his ‘Big Four’ Agenda has suffered torrid early years, in part due to lack of a clear delivery strategy and inadequate direct cash allocation.

The Auditor-General says Dr Manjari diverted the Sh7.6 billion meant for UHC roll-out despite Health principal secretary Susan Mochache rejecting his request for approval to utilise the cash to pay for expenses incurred on emergency procurements for Covid-19 related procurements.

The Ministry of Health allocated Sh13.05 billion to Kemsa to finance Universal Health Care Coverage (UHC) in the financial year 2019/20. Out of this amount, only Sh8.5 billion was disbursed to Kemsa leaving a balance of Sh4 billion with the ministry.

The auditor put the Kemsa management on the spot for procuring Covid-19 items worth Sh8.4 billion without conducting market survey for the items being procured.

Kemsa is accused of violating the law by engaging non prequalified suppliers who had no experience to supply goods worth Sh871 million.

“We established that procurements amounting to Sh871,640,000 were made from firms that were not prequalified and therefore did not demonstrate adequate experience in dealing with medical products,” the report states.