New twist as Gov’t now says COVID billions still intact at Treasury

The Ministry of Health has dispelled fears that close to Ksh.8 billion could have been misappropriated during the fight against the COVID-19 pandemic by haphazard purchase of vaccines without regard for procedures.

Health Principal Secretary Susan Mochache has said the money is intact at the Treasury and that out of Ksh.10 billion which the ministry had planned on spending through a commitment undertaking, only Ksh.2 billion was used as vaccines worth over Ksh.20 billion have been supplied to the country to date by donors,  at no cost.

On May 23, the Public Accounts Committee (PAC) summoned PS Mochache on issues flagged by the Auditor General; the purchase of masks, ventilators, and vaccines to boost the fight against COVID-19, first detected in the country in March 2020. A total of Ksh.19 billion is said to have been used.

The ministry had a budget of Ksh.16.42 billion to procure masks under the Transforming Health Systems for Universal care project.

Although specifications for the masks were the same, the Kenya Medical Supplies Authority (KEMSA) paid one supplier Ksh.250 per piece, three other suppliers got Ksh.700 per piece for the exact same masks. Mochache said the emergency caused the disparity.

“At that time, sitting here as a PS, we could not buy masks, the suppliers came to us and said we have masks and here is the price, take it or leave…it was a crisis,” she stated.

PS Mochache says the purchase of these masks was done at the very beginning, when the pandemic was causing havoc globally, not just locally.

“This was in April, first initial stage, then we rallied local manufacturers because we could not get masks globally, because of the prices. The audit report was done in 2020,” she said.

The Auditor General's report flagged the Ministry of Health's agreement to procure ten million doses of the Johnson & Johnson vaccine at Ksh.10.96 billion. Budgetary approval for the acquisition was Ksh.7.6 billion, an over commitment of Ksh.3.3 billion.

“We entered into a commitment with AVAT, and it was compulsory and a requirement for members of the AU to show firm commitment that a member state was capable of procuring a certain number of vaccines in order to save lives,” said the PS.

“We are even discussing whether to conclude the commitment undertaking because it was an international agreement. You can't use money if it is not in the budget, Treasury put all the money in the commitment but along the way we realized we will not utilize all the cash, the rest was left at Treasury.”

Mochache says that under the agreement by the Africa Vaccine Acquisition Trust, the Ksh.10 billion would ensure Kenya did not miss out on vaccines as countries scrambled for available doses.

About Ksh.2 billion was used to purchase about 1.55 million doses and thereafter donors started sending vaccines. She says the remaining Ksh.8 billion is at Treasury.

“The National Treasury provided the deposit and the balance was to be provided as and when consignment of vaccine was required. Government has spent so far Ksh.2 billion. When we signed this commitment we were desperate,” she added.

The Auditor General also flagged the ministry’s use of Ksh.300 million to procure Gavi vaccines without the National Treasury's approval, making it difficult to establish whether the money was procedurally spent.

“Due to capping of procurement, the ministry requested the Treasury to uncap the funds. This was done and we transferred the funds. There’s a letter from me to my colleague at Treasury. Funds were directed to UNICEF. Approval was granted by Treasury CS. This matter was corrected after the auditors raised the issue,” said PS Mochache.

The report notes that 13 out of 20 ventilators purchased at the height of the pandemic at a cost of Ksh.59 million, or Ksh.2.95 million each, remained at KEMSA stores. The ministry blames this on the Ethics and Anti-Corruption Commission.

“KEMSA was asking do we stop distribution of items? EACC said hold distribution of everything. That is how the ventilators remained in the warehouse, because of the investigation,” she said.

According to KEMSA, upto 100 ventilators have since been distributed to several counties that include Kisumu and Tana River among others.

The PS says Ksh.20 million set aside to support frontline workers was also used to hire psychologists.

The World Bank is said to have funded the COVID-19 Health Emergency Response Project with 53 psychologists hired to offer psychosocial support in various health facilities. A total of Ksh.49,400,000 was spent on salaries.

“Funds were granted late and handed to the KMTC facilities in all 47 counties. Honestly, Ksh.20 million to train people in 47 counties was very little. This support has been beyond Ksh.20 million because we hired psychologists and they have been on payroll by Ministry of Health and World Bank,” she said.

Mochache says the Auditor General's questions had not been raised by PAC members during a May 23 session to clarify expenditures and that some of the information required by the Auditor General's office was not readily available at the first instance of asking.

“It is true that financial statements indicated some misclassified items. The funds were used for research studies on items to be later acquired. Again this is an issue of accounting of books,” she said.

MOH and the government are working with USAID and other agencies to ensure transparency and efficiency at KEMSA.