The Management of the Kenya Medical Supplies Agency (KEMSA) violated the Public Procurement Act in all material aspects, the Senate Joint Committee on Health and Adhoc Committee on COVID-19 heard, Wednesday.

In a damning Special Audit Report on the Utilization of COVID-19 Funds by KEMSA, presented to the Committee by the Auditor General, Nancy Gathungu it emerged that the Agency’s budgetary management process for capital budgets did not comply with the Public Finance Management Act.

“Accountability in the use and management of public resources is not set aside because there is an emergency. Retrospective Direct Procurement is allowed with each entity having their pre-approved systems and procedures on how to apply them,” explained Gathungu.

The AG also observed that there was evidence of comingling of UHC and KEMSA Capital funds both of which were irregularly used to fund COVID-19 related expenditures.

The audit established that KEMSA had irregularly issued commitment letters amounting to Kshs.7.78b to various suppliers, out of which supplies of Kshs.7.632b had been delivered to KEMSA with an amount of Kshs.4.712b having been paid out already.

“Given the inefficiency in the procurement process and the fact that 97% of supplies [worth Kshs 6.35b] procured were still lying in KEMSA Warehouses as at the time of audit, there was no value for money realized,” Gathungu submitted.

The AG also reported that the Audit established red flags that pointed to possible fraud where Companies that had been in existence for less than one year, were awarded contracts amounting to over Kshs 1.25b to supply. For instance Kilig Ltd, Shop ‘N’ Buy Ltd and Nanopay Ltd were registered on 22 January 2020 and 14 February, 2020 and 22 August 2019, respectively yet they were awarded tenders.

Senators present at the meeting included: Sen Michael Mbito, Sen Sylviah Kasanga, Sen Mary Seneta, Sen Abdullahi Ali, Sen Beth Mugo, Sen Millicent Omanga, Sen Fred Outa, Sen Beatrice Kwamboka, Sen Mithika Linturi and Sen Mohammed Faki. Also participating in the meeting was Deputy Director Forensic Audit at OAG, Sammy Kimunguyi.