Kemsa heads ignored Covid-19 supply rules

Top managers at the Kenya Medical Supplies Authority (Kemsa) flouted the agency’s rules by not cancelling tenders awarded to suppliers who failed to meet strict delivery deadlines, MPs heard yesterday.

Acting Kemsa Chief Executive Officer Edward Njoroge told the National Assembly’s Public Investment Committee that senior managers met at the end of April to assess the country’s state of preparedness in combating Covid-19.

At the time, said Mr Njoroge, only essentials worth Sh169 million had been delivered against Sh5.4 billion in Letters of Offer granted to suppliers.

“We resolved that due to the slow rate of delivery, we would only grant tenders to suppliers who had the goods in their stores, and not those going to source them from out of the country,” said Njoroge.

But despite Kemsa taking this position, the committee noted that suppliers who delayed deliveries were not only allowed to do so and paid, but the agency tendered for more essentials worth Sh2.2 billion.

The MPs took Kemsa Finance Director Waiganjo Karanja to task for paying the suppliers despite knowing that the agreement between both parties stipulated that failure to deliver the goods within the stipulated time would lead to cancellation of the Letters of Offer.

“By the time of payment, you knew that there was a mess. You knew that these essentials had been supplied out of the stipulated time and they were technically cancelled, both by the letter of the wording of the agreement and also following a meeting that you personally attended. Why did you continue to pay for them?” asked committee chairman Abdullswamad Nassir.

In his defence, Mr Karanja said he only paid against documents, and that he could not tell they were the result of fraudulent activity. “Looking at the documents, they were all in order. They were valid documents, so I had to pay.”

The finance boss told the committee that out of nearly Sh6 billion worth of essentials that are gathering dust in the agency’s warehouses, only goods worth Sh2.9 billion have not been paid for because they lacked proper documentation.

The parliamentary committee blamed the mess on suspended CEO Jonah Manjari, whom they also accused of generating and offering Letters of Offer contrary to the requirement that this should be done by the procurement director.

At one point during the hearing, as details of how the tenders were awarded emerged, the Kemsa witnesses requested that the session be held in camera. The MPs granted their request.

Unusual step

The committee was told that by end of June, Kemsa had awarded tenders worth Sh7.6 billion but lacked funds to make payment. This led Dr Manjari to take the unusual step of seeking financial assistance from the Treasury Cabinet secretary.

“That is not the normal protocol. He would have done a letter, with the approval of the board, and sent it to the PS Health who in turn would discuss the matter with the CS Health. It would be CS Health to reach out to the National Treasury. I agree that it is total breach of protocol,” said Njoroge.

Manjari’s request to Treasury was, however, turned down after the board was alerted of the move.