There's no evidence money was lost, says Health CS

Health Cabinet Secretary Cleopa Mailu has poked holes into an audit that unearthed reported theft of Sh5 billion at Afya House, saying there is no evidence the money was lost.

Mailu who was flanked by his Principal Secretary Nicholas Muraguri told a press briefing yesterday that all expenditure at the ministry had been accounted for.

He questioned the accuracy of the audit which flagged suspicious expenditure at the ministry, including alleged diversion of money meant for maternity healthcare.

Mailu also questioned the methodology of the report and its findings and announced the Government will hire a private audit firm to “conduct further independent evaluation of the interim audit report.”

“We have so far been able to establish all the expenditure under the audit report have been accounted for. The ministry wishes to state, by way of providing clarification and context, that issues raised in the Interim Financial Audit Report were a misrepresentation of material facts and circumstances,” said the CS.

He added: “While we have serious concerns as to the quality of the report and the probity of its methodology and findings, we affirm we are committed to internal and external audits to improve our operations. Consequently, I hereby announce we shall be inviting a private audit firm of international repute. I also urge EACC, KENAO, DCI and other state agencies to expedite the ongoing audits and investigations to safeguard public interest.”

The minister said hiring of a private firm to conduct a further audit would help the government know ‘if there is something we have missed.’ However, this could also raise queries over how the government treats audits by its own officials.

“We have not kept the internal auditor aside. We are working together,” the CS said as he dismissed the report of an audit he had commissioned. The audit was conducted by Mr Bernard Muchere from the National Treasury.

On free maternity healthcare, he said the money allegedly diverted was for medical supplies which benefited the same patients.

“The issue of maternity is very emotive. As a ministry, we used money for maternity care to pay supplies. But equally so, the supplies were applied on the same patients. At the moment, as far as funds for free maternity care are concerned, I cannot tell you money was lost,” said the CS.

He said at least 586,491,796 was used to procure various medical supplies and not Sh 889,053,456 as had been indicated in the audit.

On claims of improprieties in a tender for the supply of Portable Medical Clinics, the CS said Estama Investment Limited, which was awarded the tender, supplied all the clinics and that the supplies are in Government custody in Mariakani.

He, however, did not state why the clinics have never been deployed since the tender was awarded in July. He said only one clinic was released ‘for demonstrations.’ The tender was awarded to Estama Investments Ltd, owned by former anti-corrupting agency boss Philip Kinisu’s family.

“Estama has supplied 100 clinics which are in a depot in Mariakani. One is in Nairobi which the supplier used for demonstrations,” Mailu said.

He said the company was paid Sh800 million and is yet to receive Sh200 million to complete payment.

On the question why Sh265 million was transferred into a Cooperative Bank account before Life Care Medics, awarded a tender to supply food supplements, could fulfill its obligations, Mailu said the government deposited the money in form of a Letter of Credit “as a form of comfort the supplier will be paid.”

“Opening of Letters of Credit is a standard and acceptable mode of payment for imported goods as it is a process that provides the supplier with payment in a form that ensures funds are used by the supplier for the service being rendered,” said the CS.

Four other firms including Sundales International Limited owned by President Uhuru Kenyatta’s sister Nyokabi Muthama, were paid a total of Sh249.9 million.