Kenyans lost Sh2.3 billion in Covid-19 scandal, Auditor General confirms

Edward Ouko handing over to Nancy Gathungu

Kenyans lost Sh2.3 billion in the Covid-19 items procurement scandal at Kemsa, a special audit by the Auditor General has confirmed.

Auditor General Nancy Gathungu says Kemsa’s management stands accused for violating various laws leading to loss of public money.

In a report presented to the Senate Committee on Wednesday, Gathungu also reveals fraud in procurement and collusion between Kemsa management and the companies that “won” multi-billion shilling contracts.

“During the period under review, Kemsa irregularly utilised 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,” Gathungu said.
Gathungu revealed that Kemsa over procured items with Sh6.3 billion which are still lying idle in its warehouses.

This contradicts a position given by Health CS Mutahi Kagwe and PS Susan Mochache, who had told MPs that no money was lost.

In May, Mochache told the National Assembly Health Committee the matter had been blown out of proportion as preliminary scrutiny showed that there are no monies lost.

Early in September, Kagwe said no money was lost to graft but accused Kemsa of mismanagement of funds by over-procuring health equipment for Covid-19, and inefficiency.

ODM defends Kemsa against Covid-19 graft claims

Gathungu in her audit report said, 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,” she said.

The audit also confirmed some of the companies that were awarded the contracts were established in January and February this year, against procurement laws.

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

The Covid-19 funds Scandal produced political head, with Raila Odinga’s ODM party defending  Kemsa against corruption allegations.

In a statement by party secretary general, Edwin Sifuna, ODM said higher prices for Covid-19 equipment alone cannot be a basis for doubting the probity of those who undertook the procurement.

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