Auditor: Probe top State officials over Covid cash

By , June 9, 2021

The Auditor General has recommended top government officials be investigated over their role in the use of Covid-19 funds.

Auditor General Nancy Gathungu, in a special audit report on the utilisation of the funds by the national government, faults various agencies and public hospitals for operating illegal bank accounts, violating procurement regulations and purchasing unnecessary health equipment.

In a report tabled in Parliament yesterday, the Auditor General singles out institutions such as Mama Lucy Hospital in Nairobi County, Othaya Level 5 Hospital in Nyeri County and Ruiru Hospital in Kiambu County, for buying ventilators which they ended up not using.

She faulted Health Principal Secretary Susan Mochache for authorising the purchase of excess ventilators.

“On June 2, 2020, the PS, ministry of Health wrote to the suppliers, Gradian Health System, informing them that the ministry had considered the proposal to purchase the ventilators and decided that it would only procure 100 of them,” the Auditor states.

But one day later, Mochache wrote to the supplier instructing them on the distribution of 30 more ventilators to counties, only for the devolved units to fail to utilise them as some of their hospitals did not have capacity to use them.

“The ventilators were dispatched to some hospitals that were not ready, hence they were not installed and were still in their original packaging,” notes the Auditor.

She also fingered members of the Covid-19 Emergency Response Fund for operating an illegal account at a leading commercial bank.

“It was noted that various bank accounts were opened or had been in operation in relation to raising funds for the Covid-19 pandemic emergency response. The account operated by the Treasury had closing balances of Sh 9.9 billion as at July 31, 2022,” reads the report.

It was established that besides the four bank accounts that were operated by the Treasury, there was another account operated in ABSA Bank which was opened by the Emergency Response Fund Board.

However, it was established that the Board as constituted was not backed by any law or Act of Parliament or Public Finance Management Regulations which is essential in operationalisation of any public funds.

Board comprised Jane Karuku as chairperson, Interior and Coordination of National Government Cabinet Secretary Fred Matiang’i and Kakamega Governor Wycliffe Oparanya who was then chairperson of the Council of Governors.

Others are Equity Bank Chief Executive James Mwangi, Joshua Oigara (Kenya Commercial Bank CEO), Royal Media chief executive Wachira Waruru, Jeremy Awori (ABSA CEO), hotelier Mohammed Hersi, Phyllis Wakiaga of KAM, business tycoon Narenda Raval and senior state official Kennedy Kihara.

Gathungu concludes in the report that there was no evidence provided to show that the operations of the ABSA bank account was established within the law.

It was noted that the Covid-19 fund accounts were not centrally managed according to the law in that while some accounts were handled by Treasury, the ABSA bank account was being run by an appointed board without an administrator.

The Auditor recommends that the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations conducts further investigations to establish any acts of criminality in all irregularities identified by the special audit.

“The investigating agencies should open investigations on state and public officers found to have flouted the law,” Gathungu recommends.

Single cent

She says that her office sought advisories from the office of the Attorney General and the National Treasury on the status of the Emergency Response Fund but the advisories provided conflicting conclusions.

While the Treasury maintained that the Fund was within the law in opening separate accounts, the Solicitor General was of the opinion that the money raised through the framework of the Fund could not be deemed to have been collected under statutory authority because requirements for the establishment of such authority were not carried out in respect of the Fund.

In the utilisation of Covid-19 funds by referral hospitals, the Auditor found out that some institutions did not spend a single cent of the allocations.

For instance, Coast General Hospital did not utilise Sh500 million allocated by the Emergency Fund while the Jaramogi Oginga Odinga Referral Hospital in Kiasumu County did not utilise Sh400 million from the Fund.

Others were Kitui Referral Hospital and Mandera Referral Hospital which never spent the Sh300 million they each received from the emergency Fund.

However, the Kenyatta National Hospital utilised its allocation of Sh600 million from the Fund.

Other institutions that used the funds included Kenyatta University Teaching Research and Referral Hospital (Sh500 million) and Moi Teaching and Referral Hospital (Sh400 million).

The report indicates that Mama Lucy Hospital received 18 ventilators which were not installed as the facility did not have an Intensive Care Unit (ICU).

Kauwi Level 4 Hospital in Kitui County received five ventilators but were not in use since the facility had no ICU.

Five ventilators issued to Othaya Level 5 hospital were later transferred to KNH without explanation. Ruiru sub-county hospital received five ventilators but were not used as the facility was not ready for the machines.

At the Ngong level 4 hospital in Kajiado County, five ventilators are still in their original packaging at the facility’s stores.

The report also states that funds provided for the conversion of the day care centre to a Covid-19 ward for healthcare workers amounting to Sh140 million had not yet been utilised as at October 30, 2020.

Gathungu finds that frontline workers were overpaid in allowances, with some receiving payments exceeding the Salaries and Remuneration Commission (SRC) rates.

While the SRC approved rates at Sh15,000 a month, some received as much as Sh130,000.

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