MPs order audit of Covid-19 funds

The National Assembly’s Public Accounts Committee (PAC) has ordered a forensic audit on the Sh236 billion allocated for the fight against Covid-19 amid public uproar over misuse of the funds.

In a directive to the Auditor-General Nancy Gathugu, the public watchdog committee wants the audit to cover the expenditure period between March 13 when the first case was reported in the country and July 31.

“We will work professionally as provided for in the law to ensure that we get to the bottom of the matter so that Kenyans can know how the money was used,” said PAC chairman Opiyo Wandayi after a meeting of the committee at Parliament building.

The PAC directive comes in the wake of suspected Covid-19 related procurement fraud at the Kenya Medical Supplies Authority (Kemsa), which buys drugs for all public health facilities in the country.

The authority’s CEO Jonah Manjari has since been suspended alongside directors Eliud Muriithi (Commercial) and Charles Jume (Procurement) to allow for the investigations into claims of procuring Covid-19 emergency kits at exorbitant prices.

According to the National Assembly Standing Orders, Ms Gathungu will have 60 days to present a comprehensive audit report to the committee for action.

The PAC set the audit scope on the procurement, warehousing and distribution of essential medicines including Personal Protective Equipment (PPE’s) and requires the office to verify whether the expenditures were incurred lawfully and in an effective way.

PAC also wants a review of the fiscal measures undertaken by the government to mitigate against the spread of the pandemic, including a Sh13 billion stimulus package passed in the last financial year.

The Sh13 billion includes a Sh10 billion cash transfer programme to the urban vulnerable and the poor and Sh1 billion to recruit health workers to strengthen the human capital capacity of the Ministry of Health.

The amount also comprises Sh400 million for food and non-food commodities for affected households and Sh1.5 billion for purchase of testing kits and reagents.

In the current financial year, the government set aside Sh53.7 billion for Covid-19 response.

The national government has also received significant assistance from both bilateral and multilateral partners to support the fight against the pandemic.

The World Bank gave Sh6.8 billion under the Contingency Emergency Response to the Ministry of Health for prompt preparations and response towards procurement, warehousing and distribution of essential medicines including PPEs.

The government also received Sh78.3 billion under the Rapid Credit Facility of the International Monetary Fund (IMF) to address the impact of the pandemic and Sh108 billion from the World Bank under the second Development Policy Operation as both budgetary support and extra resources to help fight the pandemic. 

There is also a concessional loan of Sh22.5 billion advanced to the country from the African Development Bank (ADB) to support the government measures against pandemic and additional Sh7.5 billion commitments from the European Union inform of grants.

The government also established a private Covid-19 Emergency Response Fund to receive voluntary contributions from well-wishers towards defraying expenses associated with the disease.

The general objective of the forensic audit is to identify the types of fraud, corruption and other financial improprieties if any.

The Auditor-General is further required to quantify the amount of loss, who was involved, when it began, why it was possible to perpetrate it and how it was concealed.

The specific objectives is to determine whether the funds allocated for Covid-19 interventions have been used for the purposes intended while establishing if appropriate controls are in place to prevent or detect other irregularities.

The committee expects to receive an interim report within the first 30 days of the assignment and, thereafter, fortnight progress reports and final report by the end of the task.

Audit requests

Section 34 of the Public Audit Act, 2015, empowers the National Assembly to make requests for periodic audits which are proactive, preventive, and deterrent to fraud and corrupt practices.

The purpose of such an audit is to evaluate the effectiveness of risk management, control and governance processes in State organs and public entities

Article 229 (4) of the Constitution requires Auditor-General to undertake annual financial audit and report to Parliament within six months after the close of the financial year.

However, due to the seriousness of the present matter and the uniqueness of the circumstances, coupled with the urgent need for the public to be informed, the audit of the use of the Covid-19 funds cannot wait for the routine cycle of audit.