KEMSA scandal: USAID, Global Fund threaten to withdraw Ksh.400B

Two key donors have threatened to withdraw up to Ksh.400 billion earmarked for Kenya following the latest COVID-19 scandal linked to a government agency.

Citizen TV has learnt that the United States Agency for International Development (USAID) and the Global Fund have written to the government expressing concern over the alleged corruption.

For weeks now, the rot at Afya house has refused to leave the headlines, with every ugly twist and turn of the COVID-19 scandal and even donors have been taking note.

The Global Fund and USAID are threatening to withdraw funds that were to support HIV/Aids, tuberculosis and malaria programs for the next three years.

They expressed concern over KEMSA’s procurement woes as well as management and implementation of the grants given to the institution.

The COVID-19 scandal has also created an internal crisis at the supplies agency: it stands to lose up to Ksh.2billion as it struggles to dispose of PPEs and other COVID-19 supplies.

KEMSA is said to be unable to find buyers for the items that were allegedly purchased at inflated prices and now many of them could be about to hit their expert dates.

Sources within the board indicate that the agency is holding a stockpile worth over Ksh.6 billion.

The Board is seeking a green light from the Health Ministry to sell off the stock at market value of around Ksh.4billion to recoup its initial capital.

Sources further indicate that the Board is seeking a re-capitalization of Ksh.5billion to cushion itself from the loss that would have been occasioned by such a write off should the Health Cabinet Secretary agree to it.

The medical supplies authority is in a financial hole with a liability of over Ksh.8 billion, out of which Ksh. 5billion was already committed.

The Board attributes the mess to the procurements that were allegedly done without its approval or that of the Health Ministry.

Documents seen by Citizen TV indicate that at the onset of COVID-19 in Kenya, Health Ministry PS Susan Mochache directed that KEMSA procure 25,000 PPEs, 10,000 N95 masks and 6,000 lab sample transport collection consumable kits.

The directive was issued on March 18, 2020 and the next day after a meeting with the COVID-19 emergency committee, she further ordered that KEMSA purchases 6,000 laboratory test kits.

Four days later, after another meeting with the National Emergency COVID-19 Response Committee, 30 ventilators were required to be distributed across the country.

However, this would open floodgates at KEMSA with its officials going on a shopping spree, with PS Mochache later calling for a meeting with the agency’s officials on April 6 for a progress report.

The next day, KEMSA sent a price list complete with the contracted suppliers to her.

In the email, the agency’s Director of Commercial Services Eliud Muriithi indicated that KEMSA had scaled down commitments to the budgetary limits as guided.

It is at this point that the PS Mochache moved to cap KEMSA’s budget for procuring the COVID-19 emergency supplies at Ksh. 758.69 million.

At some point, the agency’s MD Jonah Manjari–who has since been suspended–wrote directly to Treasury requesting Ksh. 5.14billion to facilitate COVID-19 services.

However, on June 22, Treasury noted that KEMSA had already mobilized COVID-19 emergency supplies worth the same amount without information on whether the commitment had the approval of the Health Ministry.

Treasury further expressed concern that the KEMSA boss had addressed the request directly to Treasury by passing the parent ministry.

Documents seen by Citizen TV suggest that Manjari was forced to channel the request through the PS who is the ministry’s accounting officer.

Treasury subsequently slammed the door on any additional budgetary allocation to KEMSA leaving the agency toying with the idea of diverting money meant for universal healthcare for payments against commitments it had made.

A letter sent from PS Mochache was however categorical in its warning against the use of universal healthcare funds to pay for the already delivered but overpriced COVID-19 supplies.

She told KEMSA that the Health ministry was not in a position to provide any additional funds.

With the government providing only Ksh. 300million, the bulk of the budget was now coming from the World Bank, which was also caught up questionable dealings.

The KEMSA Board is now said to be considering sending more officials packing as the web of graft at the agency continues to unravel.