• According to the CEO, the currency picked by the person raising the order was in US Dollars instead of the Kenyan Shilling, and the order had to be canceled.
• Kabuchi had been summoned to explain what actions KEMSA had taken to address concerns raised by donors and development partners
Image: MAGDALINE SAYA
The discrepancies flagged by the auditor as missing from the Kenya Medical Supplies Authority warehouse were due to a system error, the authority has said.
The acting CEO John Kabuchi told the Senate Health Committee on Thursday that there was no loss of drugs and commodities for HIV/AIDs, TB, Malaria, condoms, or mosquito nets.
He noted that there was an oversight from the office of the Inspector General in reconciliations of stocks and their calculations did not take into consideration various stock adjustments.
Kabuchi had been summoned to explain what actions KEMSA had taken to address concerns raised by donors and development partners with a particular focus on improving the warehousing and inventory management system.
He told the committee chaired by Trans Nzoia Senator Micheal Mbito that for the mosquito nets, the discrepancy arose out of an error that was within the KEMSA system and the error was picked out when preparing a local purchase order.
According to the CEO, the currency picked by the person raising the order was in US Dollars instead of Kenyan Shilling, and the order had to be canceled.
“Upon cancellation of the order, a subsequent order with the correct currency was raised and therefore this particular quantity was not received because it was reversed,” he told the committee.
“What this means is that we refunded the funding that was allocated to the LPO with the wrong currency so the quantity was never ordered because an LPO had been issued with a wrong currency and had to be cancelled and a subsequent one with the correct currency was issued replacing that,” he added.
He further noted that another discrepancy raised of 37 mosquito nets had been drawn as part of the quality assurance process.
He told the committee that the quality assurance department randomly samples products which are then subjected to analysis in order to determine their compliance to the required specifications.
In that case, an adjustment has to be made to recognise the fact that the item has been withdrawn and taken out for analysis and the issue had been clarified despite ending up in the report.
Another discrepancy of 930 mosquito nets were in the Kisumu depot batch number 808000 which was a return from the field but had not been reconciled at the national level. It was the adjustment is what was queried by the auditor.
He further said there was stock management variance within the system for male condoms which was picked by the auditor.
The agency said the stock in question which was in two batches of 975,888 pieces and another quantity of 487,440 pieces had been returned to the suppliers after they failed quality tests.
“After we returned these stocks to the supplier, this was picked as a variance by the audit team and again we did explain to them the reason why these items were returned and that resulted in the overall negative effect of the stock balances,” he said.
Another 33,696 pieces had been taken by the quality assurance teams for analysis, based on the nature of the quantities involved. That resulted in the negative adjustment leading to the 1.1 million condoms queried in the auditor’s report.
Kabuchi noted that the reason the adjustment had not gone through at the time of audit was due to their bulky nature they were stored in the Eldoret depot which is not live on the KEMSA management system.
The transactions were sent to Nairobi for processing in the system this was done on January 15 2019 after reconciliations with the depots.
“We have these offside depots which are currently not connected to the warehouse management system in our central supply chain centre in Embakasi.”
Similarly, he explained that some close to 50,400 items were damaged on transit based on the damages reports that were received during the transfer, resulting in the adjustments.
The summon followed reports by the Global Fund report that 908,000 mosquito nets, 1.1 million condoms and tuberculosis drugs worth Sh10 million had disappeared from the Kemsa warehouse.
Global Fund is a UN-backed organisation that finances the fight against HIV/Aids, tuberculosis and malaria.
Global Fund suspected that the lost medicines are stolen and resold on the black market and to private chemists.
The organisation also accused Kemsa of overstating the value of medicines by Sh640 million, with some types of drugs having been inflated 100 times.