Medical supplies authority Kemsa has denied sending healthcare products and medicines to non-existent health facilities.
An audit report recently tabled in Parliament had queries that the authority supplied medicines worth Sh572 million to ghost facilities.
Auditor General Nancy Gathungu said the audit established that the 275 health facilities indicated as recipients did not exist on the ground.
Kemsa, in a rejoinder on the press reports, said the facilities in question were centralised stores used as delivery points.
The agency says the drugs and supplies were delivered to the stores for distribution to 23 counties and 275 subcounties.
The counties in question, Kemsa said, have centralised stores where they deliver donated products.
“This necessitated Kemsa to create the centralised stores as delivery points even though they are not actual health facilities,” the authority explained.
It said many centres were created during the Covid-19 pandemic “where counties wanted to create a centralised store.”
The authority has dismissed queries raised by the auditor on the review of its books for the year to June 2023.
Kemsa termed the issues reported as “inaccurate, non-factual, misleading and misrepresented activities during the implementation period”.
For the authority, it remains an agent of the Health ministry tasked with procuring, warehousing and distribution of health products.
In an attempt to exonerate itself, Kemsa says "the government enters into partnership agreements through the ministry".
In the scathing audit, Gathungu among others, questioned how donated cancer drugs worth Sh9 billion ended up at a private hospital.
She also flagged supplies to private health facilities that were billed on the government, and loss of money in a botched procurement.
Gathungu further queried excess purchases, procurement irregularities, supply of untested medicines and slow pace of reforms.
But Kemsa, in the blow-by-blow response, defended itself against the allegations saying the cancer drugs were sent to Nairobi Hospital because of the recipients.
The authority explained that the medicines were sourced following a 2003 deal between the government and an NGO trading as Max Foundation.
It explained that the NGO entered an agreement with GoK on the treatment of leukaemia, which is done in highly specialised facilities.
It partnered with doctors and Nairobi Hospital management to ensure patients with leukemia and gastrointestinal tumours receive the anticancer drug free of charge for over 20 years.
Kemsa stated that in 2021, the Max Foundation decentralised the service to public facilities including Moi Teaching and Referral Hospital, Coast General Hospital, Nakuru Provincial Hospital and Jaramogi Oginga Odinga Hospital.
“Majority of the patients have opted to remain at Nairobi Hospital while others have been transferred and enrolled at the four public centres,” the authority said in a statement.
On the Sh56 million supplies sent to private hospitals but billed to counties and the Health ministry, it said there was no question of billing as the consignment was for ARVs.
“All ARVs are issued to patients for free. Billing to counties is non-existent because ARVs are delivered for free courtesy of development partners like Global Fund, USAID to fight HIV/AIDS, TB and Malaria,” the authority said.
Regardless, only MPs in an audit committee can declare an audit query as resolved, and the same is backed by a vote in plenary.
Kemsa has in its response admitted to losing Sh168 million after Global Fund denied it the chance to procure long-lasting insecticide-treated nets.
“This was lost revenue from procurement fees when Global Fund changed the procuring entity from Kemsa to wambo.org. However, Kemsa still has the function of warehousing and distributing the nets to the last mile where it is earning fees,” the authority said.
It further dismissed assertions by auditors that products were distributed before testing, saying it has sufficient capacity and partners with other agencies to undertake quality tests.
The authority has also fought back accusations of procurement irregularities saying all contract extensions queried complied with the law.
“All procurements during the financial year were conducted in strict compliance with the Public Procurement and Asset Disposal Act, 2015, where various methods of procurement were used as outlined in the Act,” Kemsa said.
On the queried Sh3.5 billion excess purchase, Kemsa said requests for procurement are based on projected demand at that period.
It stated that changes in demand may arise due to various factors leading to either overstocking or understocking of certain commodities.
Kemsa further said delays in the delivery of goods from various suppliers also affect the stock levels at any given time.
On the unspent Sh300 million reforms budget, Kemsa said the money was earmarked for procurement of an Enterprise Resource Planning system, and that the same has been developed.
“This money was earmarked for procurement of the ERP system which has been developed and training on the same ongoing and expected to go live by December 18, 2024.”