Kenyans are reeling in shock after revelations that Sh. 5 billion has gone missing at the Ministry of Health.
It is highly suspected that the money was stolen in a mega scheme that surpassed the looting involving the Ministry of Devolution and the National Youth Service (NYS) where Sh. 791 million was paid via the manipulation of the Integrated Financial Management System (Ifmis).
The billions are estimated to be enough to buy 16 state-of-the-art cobalt cancer fighting equipment to add to the only one available at the Kenyatta National Hospital.
According to a leaked report addressed to the Minister of Health Cleopa Mailu, the money was either stolen in the last financial year or paid to phoney companies.
One of the companies which received the money is owned by the family of Mr Philip Kinisu, the former chairman of the Ethics and Anti-Corruption Commission, who resigned in August to avoid scrutiny over its business dealings with NYS. Mr Kinisu had failed to disclose to the National Assembly’s Justice and Legal Affairs Committee that he had an interest in a company that did business with the NYS.
The other single largest receiver of the payments is Estama Investments Ltd, which got Sh200 million supposed to have been for free maternity meant for county hospitals.
In one of the internal memos, the head of the internal audit unit, Mr Bernard Muchere, complains that the head of the Accounting Unit had instructed his officers “not to allow auditors access to documents” without permission.
“Despite discussing the matter with you and agreeing that the situation will change, access to documents is still lukewarm,” says Mr Muchere in a letter dated September 20, 2016.
The scandal also involves the diversion of Sh889 million meant for free maternity in hospitals that are run by the counties and the referral hospitals. This money was diverted to other purposes rather than pay the counties.
Estama Investments, which was one of the beneficiaries, was also awarded another Sh800 million tender to supply portable medical clinics in June 2015.
Dr Kassachoon was the principal secretary in the ministry at the time. While three payments were made between January and June 2016, the invoices attached to the payments do not meet the Kenya Revenue Authority requirements of ETR receipts, tax compliance and PIN number.
In some cases, the Ifmis platform was manipulated and double payment of goods made. Some money was also diverted from their original vote without the right approvals.
For instance, the audit describes two supplementary votes of Sh900 million — one under the National Aids Control Programme and another under the Curative and Rehabilitative Health Services as “possible fraud schemes”.
The auditors could not understand why, for instance, Sh265.7 million was paid to Co-operative Bank of Kenya for the supply of “food and rations” from the National Aids Control Programme’s Food and Rations recurrent vote.
“The Co-operative Bank of Kenya cannot be a supplier of food and rations and hence the real payees were not disclosed,” says the report dated August 29, 2016. “The payment vouchers were not availed for audit in order to establish who the bank was instructed to pay.”
More money under this vote — Sh249.9 million — was paid on April 4 to four firms: Dentmed Kenya Ltd (Sh2.9 million), Life Care Medics Ltd (Sh201 million), Ryovac Industries Ltd (Sh4.9 million) and Sundales International (Sh41 million).
The audit found that similar food and rations had been procured through the Kenya Medical Supplies Agency (Kemsa) using the Global Fund’s money and that the National Aids Control Programme was coordinating the distribution.
Although the above payments were made by the Ministry headquarters, the report says the foods were received and stored in Kemsa warehouses.
“This posed a challenge in accountability of the two procurements and raises a red flag on possible double payments of the same supply.”
While the CS says that the audit is an ongoing process, the report says that this is an indicator “there could be a wider scheme” to siphon money.
