Auditor-General Nancy Gathungu Says Kenya Lost Sh2.3 Billion in the Covid-19 Scandal

Auditor-General Nancy Gathungu says Sh2.3 billion was lost in the Covid-19 procurement scandal at Kenya Medical Supplies Authority (Kemsa).

In a report presented to the Senate on Wednesday, Gathungu detailed how top Kemsa officials flouted procurement procedures leading to the loss of taxpayers’ cash.

For instance, the report indicates that some of the companies that won lucrative tenders for the supply of Covid-19 equipment had been registered a few months earlier, which points to possible collusion between senior Kemsa officials and these companies.

Companies that had been in existence for less than a year were awarded contracts despite having not met the necessary qualifications to supply medical equipment, according to the report.

"We established circumstances where companies that had been in existence for less than one year, were awarded contracts to supply Covid-19 equipment e.g Kilig Ltd and Shop ‘N’ Buy Ltd were registered on January 22, 2020, and February 14 2020 yet they were awarded contracts," Gathangu says in the report.

Further to this, the report states that Kemsa over procured items worth Sh6.3 billion which are still lying idle in its storerooms, and if they are to be sold at the current market price, the agency would recoup Sh4 billion, leading to a Sh2.3 billion loss.

The report further says Kemsa irregularly diverted funds meant for universal healthcare coverage (UHC) to purchase Covid-19 equipment without approval of the Health Ministry.

"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," the report adds.

"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."

Gathungu in her recommendations wants relevant State agencies to conduct an investigation with a view of establishing criminality in the procurement process.

She further wants Kemsa to withhold any further processing of Covid-19 related claims until an independent audit is completed.