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Eyes on new auditor as hunt for Covid-19 billions commences

By Dominic Omondi and Rawlings Otieno | August 7th 2020 at 00:00:00 GMT +0300

In a twin assault on those milking Covid-19 billions as the country bleeds, the National Treasury and Parliament have ordered immediate, special probes into government spending.

Against the backdrop of millions being minted overnight, runaway spending at inflated costs and missing essentials, Senate’s ad hoc committee on Covid-19 last evening ordered new Auditor General Nancy Gathungu (pictured above) to conduct a specialised probe into the monies national and county governments have channelled towards fighting the pandemic.

And in Treasury, Cabinet Secretary Ukur Yatani gave all government ministries, including the Ministry of Health, until Friday next week to give an account of their Covid-19-related expenditures.

In a budget review that was done towards the end of Financial Year 2019/2020, Yatani had said the Government would spend Sh40.3 billion on Covid-19-related expenditure.

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Most of the money was to be used to try to stop the spread of the disease and cushion the vulnerable population against the adverse its effects, including massive job losses.

The special audit will cover the period from March 13, when the first Covid-19 case in Kenya was recorded up to July 31.

“The committee requests you to undertake the special audit on the utilisation of funds allocated to and appropriated by the 47 county governments in responding to the Covid-19 pandemic,” reads part of the letter sent to Gathungu by the chair of the Senator committee, Sylvia Kasanga.

Besides the Government spending, Kenya secured billions of shillings from four international bodies, including International Monetary Fund (IMF) (Sh78.3 billion), World Bank (Sh108 billion), African Development Bank (AfDB) (Sh22.5 billion) and the European Union (Sh7.5 billion).

Since the first Covid-19 case was reported, Kenya Medical Supplies Authority (Kemsa) has awarded 12 firms contracts worth billions of shillings to deliver items that were not covered by the State agency’s 2019/2020 approved budget as at June 4, with some multi-million-shilling irregular bids going to friends and well-connected individuals.

In his Labour Day speech, President Kenyatta said every “shilling, every cent” that has been spent on Covid-19 will be accounted for.

“We will make it (money spent on Covid-19) public. Nothing will be hidden. But now is not the time to quarrel. It is the time to save lives, dear leaders. If you have mercy on your people, this is the time for you to be supportive of the efforts that we are all undertaking to ensure we defeat this virus,” said the president.

But in Afya House and satellite agencies, it has been business as usual, a time to make a killing. Initial complaints on a planned budget with non-essentials like tea taking away millions of shillings were brushed aside by the leadership. Threats to clean up the cartels dissipated as soon as public interest in the matter waned.

Journalists line up outside Afya House as they wait for a press briefing on coronavirus update. [Edward Kiplimo, Standard]

Locust infestation

In the new Yatani order, all departments, including parastatals, have until August 14 to give an account of these disaster-related expenditures, including on the recent desert locust infestation that threatened the country’s food security.

“Following catastrophic flooding that took place towards the end of the year 2019, desert locust infestation and the ongoing Covid-19 pandemic, the first submission should cover all the four quarters of financial year 2019/20,” said Yatani in a circular dated July 23.

He said going forward, the submissions shall only be for the respective quarters.

The circular unveiled a reporting template, which will facilitate quarterly data submissions that “as of the fourth quarter of FY 2019/20 has become mandatory for all MDAs that incur disaster-related expenses to report on these expenses,” said Yatani.

With the outbreak of the novel coronavirus, most governments faced with the urgency of the moment have been forced to procure certain supplies directly from one contractor.

Organisation for Economic Co-operation and Development (OECD), a club of rich countries, has, for example, some member countries resorting to single-source procurement due to time constraints where “traditional competitive tenders… cannot be run.”

OECD said the direct award of tenders has also been done where “there is only one supplier that has the capacity to deliver.”

Unfortunately, this direct award of tenders has resulted in prices of drugs, facemasks, testing kits and Covid-19 equipment going through the roof. Moreover, there have been murmurs of favouritism and nepotism in the awarding of contracts, with critics speaking of companies belonging to well-connected individuals hauling most of the tenders.

Now the Kasanga-led committee expects Gathungu’s team in her first major assignment to establish whether the funds from the national government specific to Covid-19 activities were spent in accordance with approved work and procurement plans.

Irregularities

She should also establish if there was training and review whether the county governments had approved work plans, procurement plans, and training plans in place specific to Covid-19 activities.

Gathungu must detect and point out irregularities involving the misuse of public funds and identify related weaknesses in management controls that may imperil the integrity of the organisation and the effective implementation of budgetary and other policy decisions.

“Identify instances and patterns of waste and inefficiency that, if corrected, will permit more economical use of available budget resources and provide reliable data about Covid-19 programme results as a basis for future adjustments in laws, policies, and funds allocations,” a letter addressed to Gathungu by Senate Clerk Jeremiah Nyegenye says.

She must also establish the bank accounts into which the funds were banked, whether financial and non-financial reports on funds from the Government were produced every month.

The report is expected on or before September 4. This means Gathungu has only less than a month to undertake the task.

Equally, the committee has written to Controller of Budget Margaret Nyakang’o to do a special Budget Review Implementation Report on utilisation of Covid-19 funds.

According to the letter, Nyakang’o is expected to submit the budget review implementation report on or before August 21.

The Senate Covid-19 Committee is mandated to oversight actions and measures taken by the national and county governments in addressing the spread and effects of Covid-19 in Kenya.

While there is no breakdown on how the Ministry of Health, which is at the heart of the fight against the pandemic, spent its allocated cash on the Covid-19, disbursement to Mutahi Kagwe-led ministry shot up significantly in the financial year that ended in June.

The ministry received a record Sh83 billion in the year to June as the Government loaded up ammunition in the fight against Covid-19.


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