US cuts back Sh2bn health support over corruption claims

The Sh5 billion health scandal was on Tuesday thrust back into the limelight as the US government suspended financial support worth nearly Sh2.1 billion to the ministry due what it called corruption, weak accounting procedures and lack of accountability.

The move is likely to hurt outreach and training programmes by the ministry, which on Tuesday sought to downplay the cuts describing them as only a small portion of overall US health investment in Kenya, which exceeds Sh65 billion annually.

“This suspension only affects programme administrative support and does not affect health service delivery to Kenyans,” said Health Cabinet Secretary Cleopa Mailu.

“Consequently, we assure Kenyans that stock-outs or non-availability of medical supplies will not be experienced. Therefore, there will be no interruptions of health care provisions during the period of suspension.”

MAJOR ACCOUNTING GAPS

US Ambassador to Kenya Robert Godec had earlier in the morning said that Washington was concerned whether the billions of shillings it spends on health programmes in the country really serve the interests of the majority since there were major accounting gaps.

He said US taxpayers — whose money is used to fund health programmes such as nutrition supplements, family planning, maternal and child health, HIV/Aids, disease outbreak, surveillance and training — require that such resources are spent appropriately.

The suspension is, however, not expected to affect direct support to patients, including provision of anti-retroviral drugs to nearly one million HIV patients, HIV test kits, nutritional supplements, family planning products and other essential equipment.

These are considered part of a larger group of commodities and equipment related to life-saving treatment, prevention, outbreak or emergency response.

REVOLVE AROUND CORRUPTION

“What we have done on health assistance is to temporarily suspend technical support that goes directly to the Ministry of Heath because of the ongoing concerns about accounting processes and procedures that revolve around corruption,” said Dr Godec during a training session of vernacular radio station journalists on election reporting in Kisumu.

He added: “We are working with the ministry on ways to improve accounting and internal controls and hope to restore the funding when appropriate progress is made.”

These remarks reinforce the subject matter of a two-page letter dated May 8 by Brian Woody, the USAid Kenya and East Africa contracting officer, to various implementing partners announcing the suspension to national level programmes at Afya House, “until such a time that certain specific conditions are met.”

The letter, addressed to implementing partners, says in part that “whether you receive a separate letter or not, you are to refrain from any activities further specified in this letter and inform your contracting or agreement officer immediately.”

STOPPED EXPENDITURE

“Any activities conducted with the Ministry of Health during the period of suspension will not be reimbursed by the United States government,” warns Mr Woody.

By that simple letter, the US government immediately stopped expenditure on salaries and wages, operations, domestic and international travel as well as meetings and workshops for the ministry’s employees.

The costs of printing of communication material such as brochures, training materials and guidance documents, as well as provision of security services, building and equipment maintenance, fleet maintenance and fuel will also not be reimbursed.

The funding cuts come barely eight months after Afya House was embroiled in graft allegations over the loss of Sh5 billion in tender scams in the 2015/16 fiscal year.

The graft deals involved diversion of funds, double payment for goods, payments of millions of shillings to phony suppliers and manipulation of the Integrated Financial Management System.

APPROPRIATE LEGAL ACTION

Shortly after the lid on the graft allegations was opened, several aid agencies wrote to the Health ministry asking that individuals found responsible for any wrong-doing be held accountable and subjected to appropriate legal action.

“This measure would help strengthen development partners’ confidence that both government and external investments can be well protected for the benefit of all Kenyans,” the aid agencies wrote.

On Tuesday, Dr Mailu said the ministry is addressing matters raised in the internal audit investigations over the Sh5 billion scandal and added that the National Audit Office and Ethics and Anti-Corruption Commission are conducting independent investigations “whose outcomes will inform further action.”

He added that his ministry has been in touch with development partners and had shared with them measures taken to strengthen financial management systems and “address any internal control weakness”.

DEVELOPMENT PARTNERS

Dr Mailu also sought to assure development partners and Kenyans of his commitment to “prudent financial management and accountability of the resources placed under our stewardship,” saying his officers will “continue to engage the US government to address their concerns with a view to lifting the suspension.”

The Nation has learnt that as a result of the suspension, several organisations have halted programmes, including field trips, trainings and related activities, that were to be funded by the ministry through USAid.

The ministry’s accountability has been under the microscope in the past one year.

For instance, in May last year, an audit by Gavi – The Vaccine Alliance – put Kenya on the spot over a Sh97 million hole in its vaccine procurement processes.

CONTROL SYSTEMS

Auditors noted that the country’s vaccine procurement was dogged by ineffective control systems, questionable bid documents and lack of transparency.

There were inconsistencies and incomplete information relating to the selection of suppliers, bid evaluation, award of contracts and delivery of goods, they reported.

They said the ministry’s internal controls were ineffective, bid documents were not credible, conflict of interest in the procuring entity was not checked and officials did not give assurance on transparency and value for money.

Kenya eventually refunded nearly Sh160 million to donors, with Afya House vowing to put in place measures to “prevent future losses.”