The UN-backed Global Fund has exposed more corruption at Kenya Medical Supplies Authority (Kemsa).
In an audit report, the Global fund found out that 908,000 mosquito nets, 1.1 million condoms and tuberculosis drugs worth Sh10 million had vanished from Kemsa warehouse.
The Fund has also flagged suspected fake suppliers demanding Sh1.66 billion from Kemsa.
Global Fund finances the fight against HIV/Aids, tuberculosis and malaria.
Kemsa is also accused of overstating the value of medicines by Sh640 million, with some types of drugs having been inflated 100 times, says an audit by Global Fund.
Some of the drugs, which were bought by cash from Global Fund, expired amid a shortfall in government hospitals.
The revelations come as Kemsa battles to clean its image after the State agency was engulfed in tender fraud over the procurement of Covid-19 medical supplies in 2020.
The anti-graft agency cited irregular expenditure of Sh7.8 billion following tenders allegedly given to politically connected individuals and businesses.
Now, Global Fund’s anti-graft unit — the Office of Inspector General (OIG)— has recommended further investigation of Kemsa in a move that could put its Sh50.6 billion funding to Kenya at risk.
Since 2003, the Global Fund has disbursed over $1.4 (Sh159.6) billion to Kenya to help fight HIV/Aids, tuberculosis, malaria, and most recently the Covid-19 pandemic.
“Kemsa has poor internal controls on warehousing and inventory management, resulting in 16 percent differences in batch numbers verified, and discrepancies of 908,000 long-lasting insecticidal nets (LLINs) between actual and expected stock balances,” says the Global Fund’s report.
“We identified 165 long outstanding/undelivered local purchase orders (LPOs) valued at $14.5 million (Sh1.66 billion). The high number of LPOs without an attached delivery notes poses the risk of fake suppliers or diverted procurements.”
The audit also revealed missing contraceptives, with the stock of condoms found to be 1.1 million less than expected.
The report also accuses Kemsa of lacking the ability to monitor the distribution of its drugs and commodities, making it vulnerable to theft and leaving health centres without lifesaving medicines.
“Kemsa’s Nairobi warehouse was overcrowded with commodities during our visit, making it difficult to trace commodities,” says the report.
“For example, in a physical sample count, Kemsa could not locate three of eight batches of TB medicines (worth $91,000 of a total $570,000).”
The inconsistencies in Kemsa’s information system included unexplained adjustments amounting to $544,000 (Sh62 million).
“This was in addition to adjustments of $5.6 million (Sh640 million) due to anomalies in commodity unit prices: prices for expired drugs were overstated by 100 times,” says the report.
Global Fund, whose principal donors are the US, France, Germany and Japan, is strengthening financial safeguards following corruption claims.
Kemsa did not immediately respond to a Business Daily request for comment on the Global Fund audit.
“The authority will respond shortly,” a Kemsa spokesperson said on the phone when reached for comment.
Kemsa was in 2020 embroiled in a Covid-19 kits procurement scandal said to have led to losses estimated at billions of shillings, prompting President Uhuru Kenyatta to order the disbandment of its board and top management.
Mary Chao Mwadime took over as chairperson from Kembi Gitura, who was moved to the Communications Authority (CA) on March 17, 2021.
Health Cabinet Secretary Mutahi Kagwe also appointed Lawrence Wahome, Robert Nyarango, Terry Kiunge Ramadhani and Linton Nyaga Kinyua to the board.
Despite the reforms, the Global Fund report portrays the agency as ineffective in its procurement systems.
The report also reveals the shame of idle billions meant to help in the Covid-19 fight, saying the utilisation of its funds has been low.
“Eight months after the first Covid-19 funds were awarded (31 December 2020), only 15 percent had been utilised, rising to 17 percent by 31 March 2021,” it says.
Its 2021 total Covid war chest awarded to Kenya amounted to $139.2 million (Sh15.8 billion).