Robbing the sick? Gathungu unearths procurement rot, delayed projects in county hospitals

Hundreds of millions of shillings are wasting away or lost at county health facilities through irregular procurement, unused equipment and delayed and stalled projects.

Auditor General Nancy Gathungu exposed the rot in the 2023-24 audit report of county executives.

In Nairobi county, the Auditor General could not confirm the regularity and value for money from Sh169.4 million spent on the Modern OPD Complex at Mutuini Hospital.

In the project, Nairobi county engaged a contractor to complete the construction of a modern outpatient department complex at a cost of Sh236.5 million, and which was to be completed in 18 months.

This is after the project stalled under the initial contractor, who had quoted at Sh149 million for the project with a completion timeline of 20 weeks.

The initial contractor was paid Sh84 million when the project was at 55 per cent completion, the stage the project stalled.  

The Auditor General raised issue with the addition of an extra floor and the reviewed cost for completion.

“In addition, awarding Sh236 million for completion works is deemed irregular, as the estimated cost for the remaining 45 per cent of the project under the initial contract amounted to Sh67 million,” Gathungu said.

“This implies that the additional cost of Sh169 million for an extra floor exceeded the original contract sum of Sh149 million, which was intended for a two-storey building. Physical verification of the project in October 2024 found that the work had stalled and the contractor had abandoned the site,” the report said.

During the audit period, Kilifi county failed to implement the County Integrated Hospital Management Information System, worth Sh31.6 million.

While the system has five modules that include outpatient module, inpatient module, medical health report module, pharmacy and commodity management module and financial module, the inpatient and financial modules were not implemented.

Further, the service-level agreement and handing over report were not provided for audit, which the auditor said contravened the Public Finance Management Act, 2012.

The report also flagged the irregular advance payment for supply and delivery of Computed Tomography (CT) Scan Machine.

Kilifi county paid Sh75.9 million for the CT scan machine on June 2024, but verification in October 2024 found it had not been delivered.

The county also bought an incinerator for Sh33.5 million, which was delivered on March 5, 2024. The machine had not been used by the time of audit in October.

It was the same case for a digital X-ray machine, for which the county paid Sh14.5 million and received it on February 22, 2024.

The machine was, however, still in the store at the time of physical inspection eight months later.

 “In the circumstances, management was in breach of the law and value for money on

the expenditure of Sh33 million spent on the equipment could not be confirmed,” the report said.

In Garissa county, drugs worth Sh107.9 million were distributed to various health facilities, but the deliveries were not charged in the store ledgers. The Department of Health also procured drugs worth Sh26 million from a local supplier, but the county did not provide records to support the procurement.

The county was also flagged for failure to complete medical records offices at Garissa County Referral Hospital despite extension of the completion date from April to September 2024.

The project, which cost the county Sh11.9 million, was only 60 per cent done when the inspection was undertaken, and the contractor was not on site.

In Wajir county, Sh156.2 million was paid to the Kenya Medical Supplies Authority for the supply and delivery of medical drugs to various facilities.

However, the auditor said, Sh97 million payment for the supply of drugs to dispensaries and health centres was not supported by stores records, including receipt vouchers, store ledgers and issue notes from the facilities that received the drugs.

“In the circumstances, the accuracy and completeness of supply of medical drugs expenditure amounting to Sh97 million could not be confirmed,” Gathungu said.

 In Kiambu county, the Auditor General also flagged irregular procurement of supply and delivery of pharmaceuticals and drugs.

 The county paid Kemsa Sh51.7 million for drugs, but the tender documents were not issued to the supplier.

In addition, various stipulations were not met, the auditor said, citing user requisition, advertisement, confirmation of the availability of funds, evaluation, professional opinion, negotiation or market survey and contract for supply of the pharmaceuticals.

And while Kemsa was issued with a LPO for Sh42 million, it supplied medical drugs valued at Sh40 million, resulting in an unexplained variance of unsupplied drugs worth Sh1.4 million.

“In the circumstances, the regularity of the expenditure totaling Sh93 million could
not be confirmed,” the report said.

There was also the delayed completion of a perimeter wall at Ruiru Hospital that cost the county Sh12 million and irregular supply of gravel worth Sh5.2 million to Burugu-Kinale Level 3 Hospital.

Among other issues raised by the Auditor General in Kiambu were the award of a contract for serialisation of oxygen cylinders at a cost of Sh1.15 million, construction of a level 3 health facility in Gitothua ward at Sh46 million and another level 4 facility in Gachororo in which the county paid Sh37 million.

This is despite the bill of quantities showing value of works done and paid was Sh22 million, thus an unexplained variance of Sh12 million.

 Other queries were on irregular procurement of refurbishment of ambulances in which the contract was varied upwards by Sh3.7 million, as well as an overpayment of Sh4.8 million on the rehabilitation of Gachika Dispensary.