The Ministry of Health procured ventilators at double the price, cannot account for millions spent on airtime and millions of shillings were transferred to individuals with the same name in a cash programme as the country battled the Covid-19 pandemic last year, a special audit shows.
The report by Auditor-General Nancy Gathungu on the utilisation of Covid-19 funds by national government entities tabled in Parliament further reveals that tens of ventilators bought have never been utilised by hospitals as they have no facilities to place them.
The audit thus recommends that the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations should conduct further investigations to identify irregularities cited and action taken on individuals responsible.
In the cash transfer programme, which was allocated Sh400 million, the audit shows some 97,515 persons benefited from the initiative. However, out of these, 95,727 were registered Mpesa users while 1,788 were not. The highest amount disbursed to a beneficiary was Sh24, 000 while the least Sh1, 000.
Shared names
Analysis of the data provided revealed that 7,850 beneficiaries shared names but had different telephone lines and they received Sh32.6 million. Further, some 38 payments were done to the same mobile phone number, but with different names amounting to Sh72,000.
The identity card numbers of the recipients were not provided for audit and analysis.
“In absence of the identity card numbers and in view of the time constraint, the special audit was not able to independently verify that the recipients of the cash transfers were the bona fide beneficiaries or that the cash was received. Consequently, the lawfulness and effectiveness of utilisation of the Sh400 million could not be confirmed,” states the audit.
In her report, Ms Gathungu faults Ministry of Health principal secretary Susan Mochache for procuring tens of ventilators without due diligence.
On March 30, 2020, the report says, a contract between the ministry and Gradian Health Systems, New York, US, was signed for the supply of 250 units of Gradian Comprehensive Care Ventilators (CCV) and related services. From the contract, the company was to be paid Sh424 million ($4 million).
Direct procurement
The company was selected through a direct procurement. The procurement was done using the World Bank Facilitated Procurement Method.
The report shows on May 22, 2020, Ms Mochache approved processing of the payment. A voucher N0. 282 for Sh170 million was prepared at the Ministry of Health dated June 3, 2020, which was 40 per cent advance payment.
On June 2, 2020, however, Ms Mochache wrote to Gradian Health Systems informing them that the Ministry of Health had decided that it would only procure 100 ventilators.
This means that Kenya bought a ventilator at Sh1.7 million each. A survey showed the price of the machine ranges from Sh800,000 to Sh1 million in the market.
On June 3, 2020, she wrote another letter instructing the firm on the distribution of 30 more ventilators for counties. The devolved units have never used them since they were never consulted and they did not have the capacity.
Out of the 100 ventilators ordered, only 75 had been distributed to hospitals at the time of the audit. Further, only 37 have been put into use as others are lying idle in various hospitals.
Hospitals not ready
The special report indicated that most of the hospitals that were given the machines were not ready since some of them did not even have intensive care units. As at the time of the audit early this year, the machines and the items were still in store and in their original packaging.
The special audit covered the period between March to July 2020 with the sole objective of confirming whether public funds utilised by national government entities for purposes of combating the Covid-19 pandemic were used well and legally.
The last batch of 25 ventilators had been received and were ready for distribution at the time of audit. However, the special audit team did not conduct physical verification of the 25 due to time limitation.
More shocking was that all the 18 ventilators that were handed to Mama Lucy Kibaki Hospital are not in use since there was no intensive care unit and the items are neatly kept in the store
All the 15 machines donated to Kauwi Level Four Hospital in Kitui County, Ngong Level Four Hospital in Kajiado and Ruiru sub county hospital in Kiambu – five each – are still in stores. There was no ICU at Kauwi, Ngong and Ruiru hospitals thus they were not ready for installation.
“Ventilators were dispatched to some hospitals that were not ready, hence they were not installed and were still in their original packaging,” the auditor states.
Some including Langa Langa Level 3 Hospital, Nyahururu Level Four Hospital in Laikipia and Othaya Level Four Hospital received five machines each but since they were not ready, the machines were transferred to other hospitals for use. Only four out of the 11 hospitals that were identified by Ms Mochache are using the ventilators. These are Kenyatta University and Referral Hospital (15), Mwatate Level 3 Hospital Taita taveta (five), Tigoni Level 4 Hospital, Kiambu (five) and Kamor Infectious Disease Hospital in Mandera.
Never inspected
The auditor also faults the ministry as some medical equipment delivered to counties have never inspected hence it is not possible to confirm whether the right quality and quantity of supplies were delivered.
According to the report, it was noted that medical equipment supplied and delivered by M/s. Surgipham Ltd at Sh11.6 million was not duly inspected. Therefore, the special audit could not confirm whether the right quality and quantity of supplies were delivered.
“This was contrary to Section 48 (1) of the Public Procurement and Asset Disposal Act, 2015, that requires an accounting officer of a procuring entity to establish an ad hoc committee known as the Inspection and Acceptance Committee to test the quality and quantity of goods delivered to confirm compliance with specifications,” reads the audit report.
Not centrally managed
In her report, Ms Gathungu notes that the Covid-19 funds accounts were not centrally managed contrary to the provision of the Covid-19 Emergency Response Fund Regulations, 2020 Part III.
“Some accounts were being managed by the National Treasury while the Absa account was being managed by an appointed board without an administrator,” reads the report.
According to records at the Ministry of Health, Sh25 billion was received from the National Treasury for the period March 2020 – July 31, 2020, for both Covid-19 and non Covid-19 related activities.
The report also indicated that some referral hospitals did not spend the Covid-19 funds allocated to the facility.
The Ministry of Health disbursed Sh4.6 billion to seven referral facilities with Kenyatta National Hospital and Kenyatta University Research and Referral Hospital getting Sh1.3 billion each. Moi Teaching and Referral Hospital got Sh549 million, Coast General Hospital Sh500 million with Jaramogi Oginga Odinga Teaching and Referral Hospital getting Sh400 million .
Kitui Referral Hospital and Mandera Referral Hospital were allocated Sh300 million each respectively.
At Moi, the special audit established that there was no evidence of existence of approved budget, procurement plan and training plan specific to Covid-19 funds utilisation for any of their sources of the Covid-19 funds.
Under funding
For Kitui Referral, it was established that the hospital only received Sh36 million from the Ministry of Health and a comparison between what the national government and what the county government had allocated and disbursed to the Kitui Referral Hospital reflects an under funding of Sh264 million
Jaramogi Oginga Odinga Teaching and Referral and Coast General hospitals did not spend the Sh400 million and Sh500 million respectively allocation from the emergency fund.
Kenyatta University Referral Hospital utilised Sh177 million out of the Sh527 million received as Covid-19 grant for development. Kenyatta National Hospital spent 600 million from the fund.
The Ministry of Health is also on the spot over airtime worth Sh2.4 million whose recipients could not be traced.
Telecommunication company Safaricom was contracted through direct procurement to supply airtime for officers manning the quarantine sites, surveillance teams, the Emergency Operation Centre (EOC) and the contact tracing teams for Sh3 million.
However, a review of the store’s ledger and stock control card No. 524481 of mobile airtime revealed that 2,400 airtime scratch cards worth Sh2.4 million were issued without any counter requisition and issue voucher.
“The special audit could not confirm whether the issuance of mobile airtime was duly sanctioned and approved,” reads the report.
The report also established that as at the date of the audit, all airtime worth Sh3 million had been fully issued. However, a review of the availed list of beneficiaries revealed that only airtime worth Sh869, 000 was duly signed for by the recipients.
The special audit identified that the ministry was not able to account for other Sh32 million public money.
In its recommendation, it states that Sh14 million was lost because of the inadequate control of management of fuel, un-surrendered imprests worth Sh8 million, conflicting documentation on notification of tender award and letters of acceptance for Sh5 million.
Quarantine facilities
The Ministry of Health also disbursed Sh700 million to 12 to quarantine facilities of which Sh154 million was paid to Kenya Medical Practitioners and Dentist Board as funds for payment of quarantine facilities verified bills while Sh500 million paid to Kenya Medical Training College for Covid-19 emergency response resultant expenditure on isolation services. It was established that Jomo Kenyatta University of Agriculture and Technology received Sh1.7 million for 57 quarantined persons. However, only quarantine expenditure schedules for 51 individuals had been provided.
The facility offered accommodation at the rate of Sh4,000 per day for 13 days meaning that Sh312, 000 for the extra six persons may have been incurred for services not provided contrary to section 104 of the Public Finance Management (National Government), 2015.
“Section 104 of the Public Finance Management (National Government), 2015 provides that all receipts and payment vouchers of public money shall be properly supported by pre-numbered receipt and payment vouchers and shall be supported by the appropriate authority and documentation,” states the audit.
The ministry is also on the spot over Sh12 million meant for the fight of coronavirus, which might have been used to fuel private cars.
M/s. Ramji Haribhai Devani Limited was awarded the tender for the supply and delivery of fuel worth Sh14 million. The Ministry of Health paid the entire amount to the supplier.
However, the report indicates that only Sh2 million was utilised between the period of May to July leaving Sh12 million unaccounted for.
Fuel cards
“The special audit established weaknesses in usage of fuel cards since the Ministry of Health did not designate fuel cards to each vehicle hence not possible to ascertain the amount of fuel consumed by each vehicle for the period under review,” reads the report
The auditor says it was not possible to trace the transaction amounts in the monthly fuel expenditure statements to respective work tickets hence the audit team could not confirm whether fuel expenses incurred by the cards marked for use by ‘Any Vehicle’ were for official assignments.
“There is a possibility of misuse of the fuel cards, especially fuel cards marked, for use by ‘Any Vehicle’, as such transactions cannot be traced to the drivers’ work tickets, ” reads the report.
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