alexa No money has been lost, says Mailu as he defends suppliers - Daily Nation

No money has been lost, says Mailu as he defends suppliers

Monday October 31 2016

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The Health ministry on Sunday fought back against corruption claims within its ranks and defended its suppliers against claims of fraud.

Cabinet Secretary Cleopa Mailu said no money had been lost in his ministry, contrary to claims that about Sh5.2 billion had been paid out to suppliers in dodgy circumstances.

At a press conference in his Nairobi office, Dr Mailu who was with his principal secretary, Dr Nicholas Muraguri — the man believed to be at the centre of the controversy— shifted the blame to the ministry’s internal auditor, whom he accused of leaking an incomplete document.

“We have so far been able to establish that all the expenditure under the audit report has been accounted for.

“It is also vitally important for me to clarify that the report under reference only raised audit queries based on an assertion of unaccounted expenditure, not fraud or theft,” he said.

He added that he would hire an independent auditor to verify claims of corruption and accused financial assessors for “double counting” figures and leaking the findings to the media.


“We have serious concerns as to the quality of the report which is in your possession, and the probity of its methodology and findings. However, it doesn’t negate the concerns raised in there. We affirm that we are committed to internal and external audits as a way to improve our operations.”

The findings in question emerged last week after an internal auditor’s report showed payments to various companies may have been made illegally.

Some of those companies have denied claims that they were favoured in the contracts or that they failed to deliver the goods.

President Uhuru Kenyatta’s sister Nyokabi Kenyatta Muthama and cousin Kathleen Kihanya have been named as beneficiaries of tenders in the ministry.

Sundales International, the company owned by the two, won a Sh41 million tender for supplies to the Kenya Medical Supplies Authority.


The directors, whose company is listed among a list of companies described as disadvantaged because they belong to the youth, disabled and women, on Saturday sought to clear themselves of any wrong doing, saying their business was clean.

On Sunday, Dr Mailu said the actual details of how the money was spent was unknown, but refuted criticism that the ministry had given tenders to firms with questions about possible conflict of interest.

“As a country, we have made a lot of strides in ensuring that we create an environment for people to conduct business ... and we have seen efforts in government documents to allow more women, youth and the disabled to do business,” he said.

“A Kenyan is a Kenyan and, therefore, anybody can conduct business with the government as long as there is no conflict of interest. The auditor did not raise the question of conflict of interest in his report. I do not want any Kenyan to feel lesser ... we are encouraging businesses.”

The auditors, on assignment from the Cabinet secretary himself, found that the ministry may have spent money under the Supplementary estimates before the National Assembly could approve it, an issue that Dr Mailu disputed.

It also found out that the ministry had transferred Sh265 million to Co-operative Bank. The bank and the CS, however, said the money was paid in order to obtain Letters of Credit for LifeCare Medics Ltd, a company contracted to supply fortified nutritional supplements.

The ministry defended the move, saying it was seeking to avoid making upfront payments before delivery and assured the company that the money would be paid on delivery of goods.

“The opening of Letters of Credit is a standard and acceptable mode of payment for imported goods, as it is a process that provides the supplier with payment in a form that ensures that the funds are used by the supplier strictly for the service being rendered,” he said.