OPINION: KEMSA needs to be brought to account
By Allan Chesang
This one is familiar. We have read about it many times in the past. A parastatal claiming bankruptcy asking for bail out from the government. Or claiming it has gone broke and needs capital injection to facilitate continued operations.
Let us look into why they become insolvent to start with. The reason is normally rampant graft, incompetent management. Basically those hired to run and manage these parastatals loot and run these public entities to the ground. Then they cry bankruptcy, insolvency –“sirkal saidia”.
The latest to go down this bail out road is the Kenya Medical Supplies Authority (KEMSA). It claims that it is broke and is asking the government for a bailout amounting to KES 5 billion. This is in the face of reports that KEMSA cannot account for a whooping Ksh.17 billion allotted to it in the last fiscal year (2019).
Also, KEMSA is in possession of medical supplies amounting to Ksh.6 billion which has become dead stock, as these supplies were purchased at inflated prices, and are now impossible to move. This is amid threats from two major foreign donors at the Ministry of Health to withdraw donor funding, claiming rampart corruption at KEMSA.
These donors, the United States Agency for International Development (USAID) and the Global Fund, are alarmed at how KEMSA has been spending their donor funding.
Audit reports show that KEMSA bought medical items worth an estimated Ksh.3 billion, at an inflated price of double that amount. In efforts to attain liquidity, KEMSA now intends to sell these items at a lower price of approximately Ksh.4 billion, as it awaits government bailout. This is ludicrous!
There’s more. In the initial phase in the fight against the Corona Virus, KEMSA was directed by the Ministry of Health to keep its budget at an approximate Ksh.750 million. KEMSA went ahead and ignored this cost management directive, reporting an expenditure close to Ksh.4.6 billion, which subsequently rose to an estimated Ksh.9 billion!
These are some of the irregularities red flagged by the two donors. Investigations by the Ethics and Anti-Corruption Commission, as well as audit investigations by Price Water House Coopers, are underway to determine just how KEMSA expenditure surpassed the initial approved figure by this absurd margin.
These KEMSA woes have resulted in the suspension of its top lieutenants, namely; its CEO, Dr Jonah Manjari, director of Commercial, Eliud Muriithi and director of procurement, Charles Juma.
Nonetheless, KEMSA needs to be brought to account. It should not be allowed to operate with impunity at the expense of tax payers. At the end of the day, it is the taxpayer who bears the cost of graft. The cost is too high.
Allan Chesang is a commentator on socio-political issues and founder of the Allan Chesang Foundation