COB faces probe over Sh63bn medical kits

CoB Margaret Nyakango defends her officer and predecessor against any wrongdoing

In Summary

•A damning report says the Office of Controller of Budget violated the law in approving withdrawal of funds for MES projects.

• It recommends investigation of the OCOB for unlawful authorisation of withdrawal of the funds.

Senate ad hoc committee on MES Senator Fatuma Dullo of Isiolo.
PROBER IN CHIEF: Senate ad hoc committee on MES Senator Fatuma Dullo of Isiolo.
Image: FILE

Former Controller of Budget Agnes Odhiambo and top officers in the office are likely to be investigated over the bungled multibillion-shilling medical equipment leasing programme.

A damning report has recommended the investigations of the office of the Controller of Budget (COB) for its role in the Sh63 billion Managed Equipment Service (MES) programme.

The report tabled in the Senate last Tuesday has indicted the COB over what it termed the irregular and illegal approval of billions of shillings withdrawn for the MES project that leased equipment to the counties.

The report indicates the COB failed to ensure prudent use of public money in approving the withdrawal of funds that resulted in "suspicious and unjustifiable" expenditure by the Ministry of Health.

“The committee recommend the relevant investigative agencies investigate the office of the Controller of Budget for approving the withdrawals,” reads the report filed by the Senate ad hoc committee that investigated the project.

On Sunday, CPB Margaret Nyakango defended the office and her predecessor Odhiambo, who was in the office in 2015-16, when the first approval was made.

“There are a lot of monies that never come to our office. The Treasury does that directly. If it [money] never got to the County Revenue fFund, then the CoB would never get to see the details,” she said.

“It would be important to find out how the withdrawals were made before we can respond substantively,” Nyakango told the Star.

The report tabled by committee chairperson Fatuma Dullo (Isiolo) accuses the COB of violating Article 201 of the Constitution and Section 5 of the Controller of Budget Act, 2016.

The reports shows that the COB approved the withdrawal of funds despite the huge variations in the amounts charged to counties, without raising any concerns, and without mandatory documents in which to anchor the approvals.

“COB failed to ensure prudent and efficient use of public funds as required under Section 5 of the Controller of Budget Act, 2016 by authorising the withdrawal of funds, and further by failing to raise questions regarding the glaring anomalies in the variations,” the report reads.

Further, the committee faults COB for failing to process the MES monies through the county Treasury as stipulated in the law.

Section 109 (2) of the Public Finance Management Act, 2012 requires that all money raised or received by or on behalf of the county government be paid into the County Revenue Fund.

The report shows that in 2015-16, Sh4.5 billion was allocated through the County Allocation of Revenue Act, 2015, as a conditional grant by the national government to the county governments to lease specialised medical equipment.

The monies were, however, not deposited in the County Revenue Fund. Instead, they were withheld at the source and approved in the budget estimates of the national government to facilitate technical assistance to county health facilities.

In 2016-17 and 2017-18, a similar amount of Sh4.5 billion was allocated as conditional grants to the counties through the annual County Allocation of Revenue Acts.

However, in 2018-19 and 2019-20, allocations were varied upwards to Sh9.4 billion and Sh6.2 billion, respectively.

“Under these variations, county allocations to the project rose to Sh200 million in the FY 2018-2019 and then marginally dropped to Sh131,914,894 in FY 2019-2020,” the report reads.

The report also accused the COB of demonstrating double standards in favour of the Ministry of Health by failing to apply the same high approval thresholds that it applies to approvals for spending by county governments.

“It is for this reason that the Committee finds that this failure resulted in suspicious and unjustifiable expenditure by the MoH in relation to the MES project,” the committee said.

For instance, the report says that CoB approved payments towards the MoH’s contractual obligations to MES service providers without the necessary minutes of the Inspection and Acceptance committees.

Further, COB continued to approve the disbursement of monies towards the MES project though the equipment remained non-functional in various counties due to the lack of personnel and infrastructure.

In addition, the office authorised blanket withdrawals from each county despite the counties not receiving the same value of equipment.

This, according to the committee, violated the principle that public money should be used prudently.

“From the foregoing, the Committee finds that the COB failed to ensure prudent and efficient use of public finances in contravention of Article 201 of the Constitution and Section 5 of the Controller of Budget Act, 2016 while authorising withdrawals," the report reads.

(Edited by J. Muchangi)