KEMSA refutes Auditor General’s report on loss of funds

 

KEMSA Headquarters

Kenya Medical Supplies Authority (Kemsa) has refuted an audit report by the Auditor General on violation of various laws that may have resulted in loss of public funds.

In a statement, the state agency termed the allegations published in a section of the media of losing billions of shillings for the Financial Year ending June 30, 2023 as inaccurate, non-factual and misleading.

The Authority regretted that irregularities highlighted in the damning report were a misrepresentation of the activities implemented during the said period.

In particular, Kemsa singled out claims that Ksh 9B cancer drugs distributed to a private hospital stating that Nairobi hospital management was part of a longstanding arrangement with the government of Kenya and Max Foundation.

The partnership, which began in 2003, the authority said ensures distribution of free anticancer drugs to patients through specialized facilities.

“In 2003 MAX foundation entered an MOU with GoK on treatment of chronic Myeloid Leukemia using Glivec. This treatment is done in highly specialized facilities, which can offer routine treatment to patients. It partnered with doctors and Nairobi Hospital management to ensure patients with Chronic Myeloid Leukemia (CML) and Gastrointestinal tumors receive the anticancer drug free of charge for over 20 years” the statement read.

It explained that there was a shift in the programme in 2021 after the foundation agreed to decentralize the service to four public facilities namely the Moi Teaching and Referral Hospital (Eldoret), Coast General Hospital (Mombasas), Nakuru Provincial Hospital (Nakuru) and Jaramogi Oginga Odinga Hospital (Kisumu).

However, majority of the patients opted to remain at Nairobi Hospital while others have been transferred and enrolled at the four public centers.

“MoH through the National Cancer Program identified the above cancer centers as the most appropriate given the availability of the necessary human resource, the required systems as well as regional distribution to allow patients receive the service closer home and avoid long travels. Majority of the patients have opted to remain at Nairobi Hospital while others have been transferred and enrolled at the four public centers” Kemsa added.

Non-existent health facilities

The Authority further refuted claims of distributing supplies worth Ksh572M to non-existent health facilities.

KEMSA said the centralised stores in question were created as delivery points for distributing health care products to counties during the Covid-19 pandemic.

“The 23 counties and 275 sub-counties in question have centralized stores, where KEMSA delivered the program/ donated HPT’s as specified in the distribution lists. Many of these were created during Covid-19, where counties wanted to create a centralized store” Kemsa noted.

Similarly on the issue of billing issues the Authority stated that all ARVs are distributed free of charge through funding from development partners like the Global Fund and USAID, hence reports on supplies being billed to counties and the Ministry of Health are false.

Additionally, the authority acknowledged a Ksh168 M loss incurred after the global fund made procurement changes contracting Wambo.org, an international supplies agency, to supply Kenya with Long Lasting Insecticidal Treated Nets (LLITNs), for mass distribution.

“Despite this, KEMSA continues to handle warehousing and distribution, earning fees for these services” the statement explained.

On the issue of Quality Control, KEMSA asserted that all products are tested or inspected as per quality assurance procedures before being issued.

Further, KEMSA defended its procurement processes and contract extensions, citing compliance with relevant laws. It also explained that order processing delays were due to budgetary constraints and the need to address pending bills.

The report highlighted the issue of Excess Purchases and Reforms , which KEMSA acknowledged that changes in demand and supplier delivery delays could lead to stock imbalances. The Authority also confirmed that Ksh 300 million allocated for reforms was used to develop an ERP system, expected to be fully operational by December 2024 to enhance end to visibility throughout the supply chain.

“It also good to note that KEMSA is an agent of MoH tasked with procuring, warehousing and distribution of HPTs. Partnership agreements are entered into with the GoK through MoH. The Authority is well poised to optimally achieve the mandate of procurement, warehousing and distribution of drugs and medical supplies for the prescribed public health programs” it assured.

By Christine Muchira and Margaret Kalekye