Kemsa woes, the long winding road to sanity

Kenya Medical Supplies Authority (KEMSA) acting CEO Edward Njoroge cuts a cake alongside Geoffrey Mwagwi, a customer, during celebrations to mark Customer Service Week at the company's offices in Embakasi. [David Njaaga, Standard]

One year and seven months since the suspension of top officials at the trouble ridden Kenya Medical Supplies Authority (Kemsa), no one has been prosecuted over myriad scandals.

Though President Uhuru Kenyatta ordered government agencies to take action against perpetrators involved in misappropriating Sh7.8 billion Covid-19 funds, focus has instead shifted to sacking employees under ‘human resource reforms.’

The situation has aggravated the delivery of medical commodities when the Universal Health Coverage (UHC) was recently rolled out.

Of the many Key reforms proposed by audit reforms, the Kemsa board lead by Mary Mwadime-who took over in April last year- has majorly initiated restructuring human resource-which has seen more than 900 employees sent parking, including cleaners, clerks and drivers.

The employees received redundancy letters on November 4, 2021 while the top managers and directors were sent on compulsory leave of 45 days.

A frustrated employee who is cooling heels on compulsory leave for over 100 days told the Standard that majority of colleagues sent home “had nothing to do with Covid-19 funds…but there were politicians who bagged millions worth of tenders, why are their jobs intact?

The aggrieved party went on to intimate that employees at Kemsa are not opposed to the reforms since their “dependants rely on public health facilities and therefore we want it to work,” but their grouse is about targeting staffers yet in the background “some politicians are still following up on tenders and payments.”

However, in a statement to media houses, Mwadime maintained the reforms were in adherence with legal regulatory protocols and that “the transformation and reforms at KEMSA are an essential government agenda.”  

As the wrangling continues, the court is expected to give a ruling on February 24, in regard to a case challenging intended sacking of 900 employees.

Kemsa has an annual budget of about Sh30 billion and dismissing the employees will cost the government Sh5 billion in compensation.

While the human resources reforms is underway, a copy of the approved organizational structure remains shrouded in secrecy.

The organizational structure was drafted by the Ministry of Health Officials, a section of the Kemsa board and members of the State Corporations Advisory Committee (SCAC) over a 30-day retreat in Naivasha, without involvement of the management at Kemsa.

Participants enjoyed hefty daily allowances of up to Sh18, 000 per person and sitting allowances of similar amount, an insider told the Standard.

Suspended Kemsa officials are enjoying salaries from the tax payers even while their positions are being held by other appointees in acting capacities.

In the meantime, tenderprenuers are secretly being processed before a new regime  checks in, despite some payment having been frozen by the Ethics and Anti-Corruption Commission (EACC).

Kemsa was in the spotlight in the wake of Covid-19 pandemic after it emerged that officials were using illegalities to award tenders to entities without even contracts or Local Purchase Orders (LPOs), but were paid, nevertheless.  By the time a red flag on the Covid-19 millionaires was raised some companies didn't have contracts or LPOs while others had not been paid.

EACC investigated the graft and handed over findings to the Office of the Director of Public Prosecution (DPP), but no one has been brought to book. 

A report by the Public Investments Committee (PCI) released in September 2021, revealed that the procurement of medical supplies was done without approval of budget.

Kemsa in the process, incurred about Sh8.4 billion towards procurement of Covid-19 related items.

Further, commitment letters issued under Kemsa amounted to Sh7.7 billion against a budget of Sh4.7 billion and “this exceeded the approved budget by Sh3, 060, 950, 000,” noted the report.

The Kemsa CEO at the time, Dr Jonah Manjari, has since been suspended.

But during his grilling, Dr Manjari told PIC Committee led by Abdulswamad Sharrif Nassir that Kemsa failed to conduct market surveys to establish the market rates for medical supplies.

Kemsa, he said, also engaged companies that had not been prequalified to supply Covid-19 Health Products and Technology (HPTs).

Among individuals illegally awarded tenders was James Njuguna, who told the PIC that his serendipitous walk outside Kemsa premises won him a Sh180 million tender to supply Personal Protection Equipment (PPEs).

The PIC report recommended a multi-agency team comprising Office of the Auditor General, the Attorney General, Public Procurement Regulatory Authority and Treasury under the leadership of Ministry of Health to probe the whole procurement of KN95, face masks and surgical marks.

EACC was also expected to investigate the Kemsa board and its role during the procurement of Covid-19 items and allegations on exaggeration of prices of items in the Local Purchase Orders.

Dr Manjari was also to be investigated for signing commitment letters, an instrument not recognized in the law and ignoring advice from Kemsa directors.  

Also to be investigated was Kemsa head of legal department Ferdinand Wanyonyi and top Kemsa management of graft.

 Besides Manjari, other suspended Kemsa employees include Eliud Muriithi (director commercial services) and Charles Juma, (procurement director) after   they were adversely mentioned in the Covid-19 funds scandal.

To date, no one has been prosecuted and Narok Senator Ledama ole Kina told The Standard in an interview that though the restructuring at Kemsa is aimed at improving service delivery, the “board and caretaker management team, with the Ministry of Health and Auditor General must conduct a forensic audit, for implementation of reports and prosecution of those involved in graft.”  

Irrespective of the ongoing reforms, Kina said counties owe Kemsa about Sh3.9 billion and which affects service delivery.

The former Pharmaceutical Society of Kenya CEO Dr Daniella Munene, attributed wrangling at the authority to lack of technical audit and political interferences.

The Authority is inspected financially, but not in terms of delivery of medicines, it was only inspected in the wake of Covid-19 scandal.

“Kemsa is the biggest warehouse of medicine in Kenya, yet it not inspected. Good distribution standards are not adhered to,” said Dr Munene adding “I am hoping that the reforms transform the organization, for the benefits of Kenyans getting access to good quality product at affordable prices.”

Dr Munene also reckons that Kemsa is a monopoly which breeds inefficiency and “the comfort that there is no competition is what got us into mess that we are experiencing at Kemsa,” which is supplying a fill rate of below 20 per cent.

She calls for amending laws to inject competition against Kemsa much Meds, a church based entity that supply quality medical items at fair charges, besides protecting staffers from political interference.

Dr Munene also think Kemsa should be treated as a wholesaler of medicines and “must be regularly audited" as per the World Health Organisation (WHO) good distribution practice standards.

Kemsa was established through an Act of Parliament and can be revoked through the same Act.

 Sidebar: Allow counties to procure items elsewhere

The scandals that rocked Kemsa saw a disruption in distribution of medical supplies and drugs especially at the counties.

Machakos County procured basics and non-basic medical supply from Kemsa, worth Sh50 million, but there were no basic items like gloves, painkillers and antibiotics.

Dr Ancent Kituku, the Executive Committee Member for Health who resigned to pursue political ambitions, said they were forced to order from Meds goods worth Sh30 million and he thinks the "the law should be changed to allow counties procure medical items from other entities for turnaround time.”

Kemsa is also not allowed to procure medical items directly from manufacturers, an issue that increases prices, but Dr Kituku maintained that the advantage of using Kemsa was its wider coverage and economies of scale.