Kenya's 60-day deadline for returning the funds expended on the national malaria programme to the Global Fund expired on Thursday, with no clear indication of the actions taken to address the concerns.
On April 3, the Fund sent a letter to the Ministry of Health highlighting questionable spending of Sh72 million out of a total of Sh184 million, which potentially did not comply with the fund's 2020/2021 grant to the country.
In the letter, Paul McCarrick, the Senior Fund Portfolio Manager at GF, gave the country 60 days to either resolve the amount or refund it to GF's Kenyan account for the grant.
If Kenya failed to resolve or refund the amount by Thursday, the money would be returned to the main GF account and considered lost. The fund also demanded the removal of individuals involved in prohibited practices from the management of GF programs.
On Friday, Health Cabinet Secretary Susan Nakhumicha stated that the matter had been resolved but did not provide further details.
"I met the Global Fund CEO last week in Geneva, and we have a framework agreement," Nakhumicha said to the Saturday Standard, promising to provide more information next week.
According to GF's demand, the money was lost through overpayment, payments made without receipts, and inflated costs in mass camping exercises.
- KEMSA reveal a new face of their medical facility
- Experts poke holes in NHIF's new contribution model and rates
- Global Fund procured mosquito nets directly from manufacturers, Kemsa maintains
- Kemsa defends Sh3.7 billion mosquito nets deal amid irregularities claim
"The compliance with financial management controls around the 2020/21 campaign was inadequate. This is evident from the significant questioned costs and control gaps related to payments.
"Action should be taken by the Division of National Malaria Program (DNMP) and The National Treasury to resolve these issues within the allocated timeframe, otherwise the outstanding amount, up to $1.3 million, must be refunded," a section of the letter written by McCarrick stated.
The letter was addressed to the former State Department for Public Health and Professional Standards PS Josephine Mburu, the former PS of the state department for medical services Peter Tum, and Nakhumicha, demanding action.
In the 2020/21 mass campaign, the Ministry of Health, through DNMP, distributed approximately 16.2 million Long Lasting Insecticide Nets in 27 malaria-endemic counties across the country.
The gaps were also noted by The National Treasury in its internal audit review dated March 7, 2022, according to the donor. Control lapses were identified, including inadequate review of payment documents.
There were also inaccuracies in the descriptions of transactions in the mobile money (M-Pesa) statement. All transactions were indicated as salary payments, which was deemed erroneous and non-transparent by the Global Fund.
Procurement at the county level was not carried out in accordance with the law. Additionally, there were discrepancies in posting and reporting of expenditures, which did not align with the approved budget.
"Based on the Global Fund review and The National Treasury internal audit review, the total potential questionable amount is Sh148.6 million. Out of this, Sh72.8 million should be resolved within the next 60 days and refunded to the Global Malaria Programme account," GF stated.
According to the review, there were overpayments of Sh2.1 million and Sh2.8 million for fuel payments.
There was a follow-up on a double payment reported in Kilifi county, amounting to Sh6.4 million, while The National Treasury's internal audit questioned costs totalling Sh61.4 million.
Instances of overpayment to security officers were reported in Homa Bay, one of the malaria-endemic counties in Kenya.
Based on the attendance schedule, the security officers were supposed to work for a total of 240 days at a cost of Sh500 per day, resulting in a total payable amount of Sh120,000. However, contrary to this, Sh136,500 was paid per security officer.
"The Global Fund findings reveal that the total amount paid was Sh8,332,500, as opposed to Sh7.4 million, resulting in an overpayment of Sh892,500."
The audit also identified instances where allowances paid for respective activities exceeded the support document, resulting in an overpaid amount totaling Sh1.1 million.
Counties such as Turkana, Uasin Gishu, Kisumu, Migori, Kwale, Mombasa, and Nandi reported overpayments during the mass campaign exercise, amounting to Sh445,800, Sh123,000, Sh196,550, Sh37,500, Sh60,000, Sh112,500, and Sh132,500, respectively.
For example, in Vihiga, the review documented an instance of overpayment of an allowance to a sub-county malaria coordinator.
The available payment schedules indicated that the coordinator had worked in seven different wards, charging five days at each ward as a distribution supervisor.
However, the distribution in the different wards only spanned nine days between June 21 and June 29, 2021.
Regarding fuel, Marsabit reported a payment of Sh672,000, which lacked support from an invoice, receipts, or work tickets. Instead, copies of proforma invoices were presented as supporting documents.
"The total questionable amount related to fuel payment is Sh2,818,800," adds the report.
The double payment was reported in Kilifi, where an erroneous payment of Sh21.6 million was made on June 7, 2021.
"We note that the program followed up with the service provider (Safaricom) to reverse the payment. Only Sh15,160,249 was recovered/reversed, leaving a balance of Sh6.4 million," adds the report.
An insider informed The Standard, emphasising transparency, that "airtime was to be given directly by the communication provider."
Furthermore, the National Treasury's internal audit review conducted a review of the malaria program and issued a report dated March 7, 2022.
Based on the audit, concerns were noted regarding various questionable payments totaling Sh61.4 million.
These questionable payments included overbilling amounting to Sh3,762,000, unsupported airtime for mass net distribution at Sh28 million, and double claims amounting to Sh73,000.
Poor accounting of fuel during the mass net distribution campaign accounted for Sh7.2 million and questionable costs paid to security guards amounted to Sh22.3 million.
Despite the misappropriation of the allocation, the Global Fund acknowledges an outstanding payment totaling Sh30,265,320 to individuals engaged in the campaign.
An insider hinted that community health volunteers accounted for the highest number of those who were not paid, despite having performed a high volume of work.
Upon realising the outstanding payments, discussions took place between the donor, the Ministry of Health, and the National Treasury on March 23. It was agreed that the Ministry of Health would strengthen oversight of the reconciliation for the work.
A dedicated space at either the treasury or ministry was to be established, and the treasury audit was to provide real-time assurance on the payments to be made.
It was also made clear that the leadership at the Ministry of Health should be informed that the donor would not be able to provide further resources for the work.
The irregularities in payment did not deter the donor from supporting Kenya in the fight against malaria, which is among the leading causes of death.
Malaria claims the lives of at least 10,700 people in the country annually, with at least 3.5 million reported cases.
Following the irregularities in distribution, a tender was issued for 10 million mosquito nets valued at Sh3.7 billion.