How Kenya Red Cross spent Sh86 million on meetings at own hotel

The Kenya Red Cross Society (KRCS) spent Sh86 million on conference facilities in their own hotel without a competitive procurement process.

According to the Global Fund Audit report released yesterday revealed that KRCS awarded 69 percent of procurement for conference facilities (valued at $836,000) to Boma Inn Hotel, a subsidiary of KRCS, without a competitive procurement process.

The UN-backed Global Fund has revealed that the tender award was between 2018 and June 2021 and that a framework agreement for the provision of conference facilities was only issued to Boma Inn, rather than to the three lowest bidders, as stipulated in the KRCS procurement manual.

“There were three lowest bidders but 69 percent of the tender worth Sh86million was awarded to Boma Inn without a competitive procurement process,” says the report.

Kenya Red Cross Society (KRCS) was given an Sh14 billion HIV/Aids grant by the Global Fund after it was taken away from Amref.

The KRCS now becomes Kenya's principal recipient receiving the HIV grant, as well as money for Malaria and Tuberculosis. Global Fund, which finances the fight against HIV/Aids, tuberculosis and malaria, has since given Sh8 million to the KRCS for the fight against HIV in the country.

The report also revealed that Kenyans could be paying expensively for drugs that are given for free by the donors. This is after some private hospitals were found to be selling the drugs.

The lost medicines are believed to have been stolen and resold on the black market and to private chemists hence shining yet another spotlight on Kenya Medical Supplies Agency (Kemsa) over its graft record.

In four out of the seven sampled pharmacies spread across four counties, branded Global Fund drugs were being sold on shelves with others being inflated 100 times.

Kemsa is also accused of overstating the value of medicines by Sh640 million, with some types of drugs having been inflated 100 times, says an audit by Global Fund.

It is also stated in the report that most of the drugs that are released at the Kemsa warehouse in Nairobi do not arrive at their respective depots on time with most of the drugs missing in health facilities.

At the time of the audit, Kemsa did not access this GPS tracking system to track commodities in transit. With 23 percent of the deliveries not in the system.

“Kemsa lack of oversight over commodity distribution has resulted in poor operational practices that were pervasive across our sample including a duplicate of deliveries, deliveries are done after three months, no signature acknowledging receipt of commodities officers; no signature by health facility officers acknowledging receipt of commodities,” says the report.

The report indicated that only 31 percent of commodity receipt documents (proof of deliveries) were delivered to Kemsa by the delivery company on time in 2021. Which means out of ten deliveries that were made seven either arrived late or never arrived at all in the said hospital,

A limited market survey found Global Fund-financed commodities, including some of which Kemsa had reported as not being distributed.

The matter has since been referred to the Office of the Inspector General unit for investigation and further analysis.

And out of the 21 health facilities visited, 19 of them (90 per cent) had unexplained stock count variances of sampled commodities, culminating in a net un-reconciled difference of Sh27 million. These were due to unjustified adjustments following stock counts, and variances between physical and stock card balances on the day of the visit.

“We also noted weak internal controls over the accuracy of health facility data in Kemsa inventory system, which have led to discrepancies between the Ministry of Health’s list of approved facilities and Kemsa system. Poor controls over IT systems are compromising data reliability and contributing to poor stock management,” the report says.

The audit also noticed that there are inadequate controls to ensure facilities receiving drugs are legitimate and approved by the Ministry of Health.

The audit noted that there were 122 duplicate entries for health facilities in the Kemsa management system. Of the around 11,000 facilities on the Kemsa system, 14 percent (1,626) did not have a MOH Kenya Master Health Facility List code and 153 health facilities with standard codes on the Kemsa master facility system were not on the health ministry approved list.
 
Of those 1,626 entities, 300 were supplied with Global Fund-funded commodities worth US$9.1 million between Jan 2019 and April 2021.

This means that there are two separate lists of facilities being maintained by Kemsa and health ministry using two different systems, it is vital to ensure appropriate controls are in place when health facilities are migrated from one system to another.
 
This is even as the report reveals the disappearance of 908,000 mosquito nets, 1.1 million condoms, and tuberculosis drugs worth Sh10 million from its warehouse and fake suppliers demanding Sh1.66 billion from Kemsa.

Some of the drugs, which were bought by cash from Global Fund, expired amid a shortfall in government hospitals.

The revelations come as Kemsa battles to clean its image after the State agency was engulfed in tender fraud over the procurement of Covid-19 medical supplies in 2020.