Health PS Nicholas Muraguri gives his version of events in Afya House scandal

Health Principal Secretary Nicholas Muraguri. He has said the amount of money subjected to  an audit at the Ministry of Health was Sh3.1 billion, not Sh5 billion. (PHOTO: FILE/ STANDARD)

The amount of money subjected to  an audit at the Ministry of Health was Sh3.1 billion, not Sh5 billion, Principal
Secretary Nicholas Muraguri has said.

In a statement sent from his office late last evening, he termed the quoted figure of Sh5 billion “a gross exaggeration
and misleading”.

“There is no figure of Sh5 billion that correlates with the audit queries raised by the internal auditor,” said the PS,
adding that all the issues raised by theaudit had been fully addressed, and that budgetary reallocations had been approved by the Treasury and Parliament.

“Notwithstanding our concerns about the process and the quality of the report, the auditor has not identified any fraud or misappropriation of funds,” Mr Muraguri said in the statement that sought to give a detailed, official version of the events that unfolded at his ministry.

Health Cabinet Secretary Cleopa Mailu had promised a thorough investigation into the allegations raised by the internal audit.

Top on the list of questions the internal auditor raised was a reallocation of Sh800 million from the free maternity kitty. Muraguri said the law allowed the Government to spend money that has not been appropriated if the budgeted amount was insufficient, or in cases of unforeseen needs.

“With regard to the above query, both the National Treasury and Parliamentary approvals for reallocating funds in the Supplementary Estimates were granted,” he said in the statement.

Food supplements

About Sh517 million was reallocated and spent on acquisition of food supplements for patients living with HIV in arid and semi-arid areas.

The decision to buy the food rations was informed by the findings of a survey on nutritional status undertaken by the Health ministry, which indicated a high case load of malnutrition in arid and semi-arid areas, the PS said.

“As a result, it was agreed that the Ministry procures, as a matter of urgency, nutritional commodities in order to cater for at-risk population in arid regions and vulnerable populations living with HIV,” Muraguri said.

The funds were provided by the ministry to supplement grants given by the Global Fund, which provides nutritional prescriptions to vulnerable people living with HIV and Aids, who are estimated to be about 750,000 in Kenya.

Another Sh800 million initially meant to fund the construction of non-residential buildings for the ministry was re-allocated, with some of the money spent on mobile container clinics, which the supplier delivered to Mombasa, according to the PS.

Further, hospitals in Lamu, Nanyuki and Bungoma collectively received a total of Sh400 million.

Muraguri said the Kenya Medical Training College (KMTC), which trains healthcare professional at the diploma and certificate levels, was granted Sh250 million that had not been budgeted for, but was critical to avoid a workers’ strike.

“This expenditure was necessary in order to prevent industrial unrest in the college,” he said of the payment to KMTC, adding that it was to help in the execution of a collective bargaining agreement that was approved by the Salaries and Remuneration Commission (SRC).

The audit had also questioned over-expenditure relating to more than Sh647 million. The PS said this was not accurate as the ministry was operating within its approved budgets.

A total of 12 payments had been flagged by the audit, including Sh70 million paid to Nyaudi Architects, a firm contracted to build a hospital in Nanyuki. Muraguri said these payments were to settle, among other things, pending bills from the previous financial year.

On the question of whether Estama Investments, the firm that was awarded the tender to deliver the mobile clinics, was fit to transact with the State, the PS said the company had met all requirements.

Auditors had flagged the company because tax compliance documents, including electronic receipts, could not be found.

“However, and in accordance with the tender requirements, tax compliance certificates and PIN numbers were provided by the supplier with the tender documents. Attachment of ETR receipts for the purposes of awarding a Government contract is not a requirement,” Muraguri said.

Ninety-nine of the mobile container clinics, which were built in China, are awaiting deployment from storage in Mombasa to various slums in major urban centres. The PS said all 100 clinics requisitioned had been received, but the ministry had so far paid Sh800 million for 80 units. The balance of Sh200 million would be paid in the current financial year.


Many suppliers were, however, baffled by the speed with which the Health ministry settled one of the invoices made by Estama Investments, where a Sh200 million invoice was paid on the same day it was raised.

Muraguri said the transaction was made on June 30, 2016, the last day of the financial year, which was the same day the purchase order was raised.

“The reason for this is that the ministry has a running contract with Estama Investments Limited in which payments are made on deliverables. The purchase order was prepared on receipt of a delivery note by the supplier on 30th June, 2016.”

Payments for the portable clinics were made from the allocations to the free maternity kitty, the PS added, because these clinics are part of the urban slum upgrading programme, which is a priority flagship project.

Muraguri said Sundales International, the firm linked to President Uhuru Kenyatta’s sister Nyokabi Muthama, was one of only five companies that qualified as suppliers under the Access to Government Procurement Opportunities – a programme intended to help disadvantaged individuals transact with the State.