A new report by the auditor general has exposed how county governments created avenues that enabled Covid-19 billionaires to thrive in the devolved units.
The report tabled in the Senate on Wednesday shows that county governments ignored procedures and legal provisions in their procurement for Covid-19 items.
In the report, Auditor General Nancy Gathungu said counties received Covid-19 related funding amounting to Sh7.70 billion in grants, own source budgets and donations.
The Senate ad hoc committee on Covid-19 situation in the country had directed an audit on the utilisation of funds channelled to fight the pandemic in the counties.
Akin to the procurement mess at the Kenya Medical Supplies Authority that birthed ‘Covid billionaires’, counties mutilated procurement laws and regulations, dished out tenders and engaged in ‘acts of criminality’, leading to possible loss of public funds.
The report shows that six counties did not conduct a market survey prior to the procurement of the items.
Twelve others hand-picked suppliers’ instead of using a competitive process.
Busia, Kakamega, Isiolo, Marsabit and Meru counties procured goods without market survey.
Baringo, Busia, Homa Bay, Lamu, Mandera, Meru, Migori, Murang’a, Narok Nyandarua and Trans Nzoia did not employ a competitive procurement process.
Kajiado, Kirinyaga, Laikipia and Tharaka Nithi procured the items without signing valid contracts with their suppliers.
“Section 8 (3) (z) of the repealed Public Procurement and Disposal Regulations of 2006 requires a procuring entity to carry out periodic market surveys to inform the placing of orders or adjudication by the relevant award committee,” the report reads.
And in what could have provided a fertile ground for tenderpreneurs to thrive, the report indicates that counties ignored Kemsa – the state-owned supplier – and instead opted to dish out tenders to private entities.
Most of the firms were not pre-qualified by the counties – indicating they were picked based on personal whims of the procurement bosses.
The report shows that 33 counties lacked procured plans and others had ineffective and inefficient procurement systems. Other devolved units lacked systems and procedures to guide emergency procurement during the pandemic.
“This could lead to inefficient and ineffective utilisation of the Covid-19 related funds thereby compromising the ability of the county governments to effectively counter the effects of the pandemic,” the report reads.
The auditor’s report also shows that 23 counties did not have approved budgets prior to procurement while 36 others lacked either work plans, training plans or procurement plans.
Further, the report shows that 13 counties did not have adequate record-keeping at their stores.
This raised concerns that some commodities procured never reached the counties, thus fears of loss of taxpayers’ money.
“Under the circumstances, the lawfulness and effectiveness of items procured for the Covid-19 pandemic could not be confirmed. In this regard, it is recommended that the EACC and the DCI conduct further investigation to establish the acts of criminality in the inventory management of Covid-19 related items,” the auditor said in the report.
In eight counties, the report shows that dispatch records of items at Kemsa and receipts by the county governments established inconsistencies between the quantities supplied and those received.
The affected counties are Bomet, Elgeyo Marakwet, Embu, Narok, Kakamega, Nyeri and Kericho. The auditor invited DCI and EACC to probe the discrepancies.
In addition, the counties opted to procure items such as masks and PPE from private companies instead of Kemsa. This was despite the supplies authority stocking items worth Sh6.2 billion.
The report indicates that despite receiving the millions, all the counties underfunded their frontline health workers, triggering risks of labour unrest.
The report rekindles the memory of the procurement mess at Kemsa, where top officials were indicted for breaching laws and dishing out tenders with total disregard to procurement laws.
The EACC has completed its probe into the scandal and forwarded to DPP Noordin Haji files for scrutiny before arrests are effected.
“Investigations revealed that Kemsa exceeded its available budget by about Sh3.2 billion. Further investigations established that Kemsa had no real justification for the use of the direct procurement method as much as it justified the same, citing an urgent need for the stocks in question because suppliers who were issued with commitment letters to supply the items did not deliver within the stipulated period,” EACC noted.