Health Finance
We submit that the total amount of resources subject of the interim Audit Report is Ksh. 3,121,061,247 and not Ksh. 5 billion as alleged in the media reports. We also wish to confirm to Kenyans that all expenditure queried in the audit report is in accordance with the law and for the intended purposes.
To start with, Ksh. 515, 795,750 quoted in the audit as irregular Supplementary Estimates for 2015 / 16 was meant to augment funding from Global Funds on HIV / AIDS which targets over 750,000 people who use nutritional foods as medical prescriptions. Parliament and treasury approved this budget. The money was spent on procurement of nutritional commodities in order to cater for vulnerable population in ASAL [ Arid and Semi-AridLands ] regions and population living with HIV.
The ministry contracted four firmsnot five- to supply food supplements to Kenya Medical Supplies Agency( KEMSA). KEMSA received the supplements on behalf of the ministry for distribution to health facilities to ease access by the HIV / AIDS patients and other vulnerable populations.
The four firms are Dentmed Kenya Ltd, LifeCare Medics Ltd, Rayovac Industries Ltd and Sundales International Ltd. A total sum of Ksh. 249,996,696 was paid to the firms.
The audit report also queried expenditure of Ksh. 400,000,000. The ministry would like to say that this money was allocated to infrastructural expansion for Bungoma and Lamu County hospitals. Each hospital was allocated a conditional grant of Ksh. 100, 000,000 while Nanyuki County hospital got Ksh. 200,000,000 for payment of pending bills for consultancy for inception works.
MoH also deposited Ksh. 265,781,500 as the audit report says into the ministry bank account at the Co-operative Bank of Kenya during the 2015 / 16.
This payment was for establishing a Letter of Credit for Life Care Medics Limited for the supply of food supplements that were in the high seas. Payments were to be effected upon confirmation of the receipt of goods by KEMSA- the receiving entity.
Letters of Credit are standard practice for payment of imported goods.
The audit report also erred by stating that the ministry allocated Ksh. 800, 000,000 and from which an amount of Ksh. 530,000,000 was reduced during the Supplementary Estimates received an additional sum of Ksh. 350,000,000.
The correct position is that an allocation of Ksh. 800,000,000 under Head-1081001701-Item 3110202 under Programme-04-Health Policy Standards and Regulations was reduced by a figure of Ksh. 530,000,000 during the Supplementary Estimates, leaving a balance of Ksh. 270,000,000. This particular balance was spent on purchase of portable clinics.
Ksh
3.1B
total amount of resources that are subject of the interim Audit Report
The Supplementary Estimates for 2015 / 16 clearly indicate that a sum of Ksh. 400,000,000 and not the amount of Ksh. 350,000,000 mentioned in the report.
The interim audit also erred in stating that in order of IFMIS to accept transactions, the chart of accounts was manipulated. However, this statement is incorrect, as a user cannot manipulate the chart of accounts.
The internal audit also quoted payments of Ksh. 647,323,272.50 as being inconsistent with the purposes intended. We wish to confirm that the transactions complied with the public Finance Management Act and meant to pay suppliers and grants to Lamu and Bungoma county governments.
We also wish to state that award of tender to Estama Investment Ltd followed due process.
The Ministry had a valid contract with Estama Investments Ltd for the supply of 100 Units of portable medical clinics at a unit cost of Ksh. 10,000,000 each, thus totalling Ksh. 1,000,000,000. This contract was effected through contract agreement No. MOH / HQS / RT / 019 / 2014-2015 of 17th July, 2015.
We would like to confirm to Kenyans that the ministry received all the 100 Units. We have paid Ksh. 800,000,000 for 80 Units. The ministry will pay a balance of Ksh. 200,000,000 during the 2016 / 2017 financial year.
We take great exception with the Audit Report, as the Head of Internal Audit Unit did not share the Report with the management, as is the standard practice. This, in fact, would have enabled the management to comprehensively address the issues emanating thereof.
The ministry of health is committed to improving the quality of healthcare in the country. We will continue in our endeavour to make healthcare affordable to all.
November-December 2016 15