The Kenya Medical Supplies Authority (KEMSA) has strongly denied allegations presented in a report by the Office of the Auditor General, which claimed that the Authority lost billions of shillings in the financial year ending June 30, 2023. The report highlighted several concerns, including the supply of healthcare products to non-existent facilities and the procurement of excess goods. KEMSA, however, has come out to refute these claims, offering explanations to counter the allegations.
Allegations of Supplying Non-Existent Facilities
One of the most striking allegations in the Auditor General’s report was the claim that KEMSA supplied goods worth Ksh.572 million to non-existent health facilities. Addressing this issue, KEMSA clarified that the goods were delivered to centralized stores, which serve as distribution points for healthcare products across various counties. These centralized stores, while not actual health facilities, appeared on the distribution list, leading to the misunderstanding.
KEMSA explained that the procurement and distribution processes were conducted according to the distribution lists provided by the respective programs. The Authority emphasized that the centralized stores were established to streamline the distribution process, ensuring that healthcare products reach the intended beneficiaries efficiently.
Quality Assurance Concerns
The Auditor General’s report also raised concerns about the quality assurance of the health products supplied by KEMSA, accusing the Authority of issuing products before conducting necessary tests. KEMSA responded by reaffirming its commitment to quality control, stating that all products undergo rigorous sampling and testing procedures as per the Quality Assurance sampling guidelines.
The Authority elaborated that the testing procedures vary depending on the nature of the product. Some products require chemical and physical analysis, while others are subjected to visual inspection. KEMSA’s statement also highlighted that they operate an ISO-certified laboratory and collaborate with other agencies, such as the National Quality Control Laboratory (NCQL), to conduct further quality tests on products before distribution.
Financial Losses and Global Fund’s Decision
While KEMSA dismissed many of the allegations, they did confirm a loss of revenue amounting to Ksh.168 million. This loss resulted from the decision by the Global Fund, an international organization dedicated to combating global epidemics, to drop KEMSA as the procuring entity for long-lasting insecticidal nets (LLINs). However, KEMSA clarified that they have retained the roles of warehousing and distributing these nets, continuing their involvement in the fight against malaria.
Procurement Irregularities
The Auditor General’s report also accused KEMSA of procurement irregularities, particularly regarding the extension of contracts and the procurement of excess goods valued at Ksh.3.5 billion. In response, KEMSA stated that all contract extensions were granted in strict adherence to the Public Procurement and Assets Disposal Act 2015. The Authority further explained that procurement requests are based on projected demand, which can fluctuate due to various factors, leading to either overstocking or understocking of certain commodities.
KEMSA acknowledged that delays in the delivery of goods from suppliers could impact stock levels at any given time, contributing to the apparent discrepancies noted in the report. The Authority stressed that these challenges are not uncommon in large-scale procurement processes and are managed as part of their operations.
Progress on Reforms and Future Plans
Addressing concerns regarding the lack of progress on reforms despite a Ksh.300 million budget allocation, KEMSA provided an update on their efforts. The Authority revealed that the funds were utilized to procure an Enterprise Resource Planning (ERP) system, which is expected to go live by December 18, 2024. This system is anticipated to enhance KEMSA’s operational efficiency, particularly in procurement, warehousing, and distribution processes.
In their statement, KEMSA reiterated their commitment to fulfilling their mandate of procuring, warehousing, and distributing drugs and medical supplies for public health programs across Kenya. The Authority assured the public and stakeholders that they are well-positioned to achieve their goals and continue contributing to the country’s healthcare system.
Conclusion
KEMSA’s response to the Auditor General’s report underscores the challenges and complexities involved in managing large-scale healthcare procurement and distribution in Kenya. While the Authority has refuted many of the allegations, they have also acknowledged areas where improvements are needed. As KEMSA works towards implementing reforms and enhancing their operations, the focus will likely remain on ensuring transparency, efficiency, and accountability in their processes.
