Economy

Auditor says report on Afya House scandal is authentic

muchere

Mr Bernard Muchere testifies before the Senate Committee on Health Nov 15, 2016. He said his audit had uncovered financial malpractices at Afya House. PHOTO | JEFF ANGOTE

Bernard Muchere, the auditor who lifted the lid on multi-billion shilling questionable dealings at Afya House, yesterday defended his report before the Senate – offering a view that was markedly different from what top Ministry of Health officials told parliament last week.

Mr Muchere, whose audit of the ministry’s spending and procurement identified Sh5 billion worth of questionable deals, told the Senate Committee on Health that the leaked report was authentic and that he would have finalised the audit had it not been leaked to the media.

READ: Revealed: Taxpayers lose Sh5bn in NYS-style Afya House theft

The internal audit report had unearthed massive theft of public funds through forgery, double payments, illegal budgetary overspending as well as manipulation of the Integrated Financial Management System (IFMIS).

Mr Muchere told Senators of the many difficulties he faced trying to accessing payment vouchers from accounting and procurement departments at the Ministry of Health slowing down the work.

He said that he was particularly concerned that many of the ministry’s procurements had been pushed through the government’s digital financial management platform IFMIS without supporting physical payment vouchers as required by law.

He gave the example of the payment of Sh265 million to unknown recipients at Cooperative Bank which was not supported by any documents.

Mr Muchere refuted Dr Mailu’s earlier explanation to parliament that the money was sent to Coop Bank to open a Letter of Credit (LC) for an impending supply of goods arguing that the Treasury had in a 1997 circular made it clear the LCs could only be opened for overseas suppliers.

The auditor, whose report has dominated public discourse in the past two weeks, said he only got to see Estama Investments’ tax compliance certificate and PIN at the Ethics and Anti-Corruption Commission offices where he had gone to record a statement.

Mr Muchere’s audit found that more than Sh515 million was lost through outright theft and double payments made under the National Aids and STI Control Programme (NASCOM).

The amount was ostensibly used to purchase food supplements and ratios for Aids patients, whose storage or use the audit could not ascertain. An estimated Sh265.7 million of the amount was paid to Co-operatives Bank, an action the audit found to be expressly fraudulent.

Mr Muchere said that he handed in the interim audit report to Dr Mailu who had asked for it for use in decision making at the management level.

“This was not an investigation but an internal audit report for use by the CS. It was for him to look at and make decisions,” the auditor said adding that he was not even expecting a response from Dr Mailu.

A week after news of the Afya House scam broke, the CS told journalists that the Sh5 billion in the report amounted to ‘gross exaggeration of figures’.

Dr Mailu questioned the quality of the audit, saying the methodology used to arrive at the figure was inappropriate and did not tally with questions raised in the audit.

READ: Afya House paid Sh850m more for container clinics

Yesterday, Mr Muchere said the audit had focused on four areas deemed to be highly prone to possible financial impropriety.

The areas included the purchase of mobile clinics, diversion of free maternity funds, over expenditure and the purchase of food supplements for NASCOP.

Soon after the report was leaked to the media, it also emerged that Health Principal Secretary Nicholas Muraguri had been pushing to have Mr Muchere transferred from Afya House.

Dr Muraguri admitted writing the letter to Treasury Secretary Henry Rotich but denied identifying Mr Muchere as the officer he wished to be moved.

The Senate has questioned the timing of Dr Muraguri’s request to Treasury insisting it was suspect and could be connected to the multi-billion shilling scam at Afya House.

Mr Muchere told the committee chaired by Migori Senator Winfred Machage that he only learnt of attempts to transfer him from media reports.

“As far as I know I am in good terms with the PS and I am not aware of him trying to push me out of the Ministry of Health,” he said even as he confessed that he has been the subject of insults since publication of reports on mega corruption at Afya House.

Aside from the insults, he said he has received threats and accusations leveled against him that he was being used by politicians to achieve their agenda.

“My MP does not even know me. I am such a small person doing my work the best way I can,” he told Senators. He is expected to table the complete audit report on Tuesday.

Mr Muchere said he had prepared the interim document for Cabinet Secretary Cleopa Mailu and did not use any assistance in typing or printing it out.

“I personally typed it on my computer and took it to the CS (Dr Mailu),” he said even as he denied leaking the document to the media.

Mr Muchere said he had only shared the report with Dr Mailu and that even his personal secretary did not have access to information on his computer.