Auditor-General Edward Ouko has raised questions over a Sh13.7 billion expenditure at the Ministry of Health in the 2015/16 financial year.


In a special audit of the accounts of the ministry, Mr Ouko questions how public funds were committed to expenditures, some of which did not have the approval of the National Treasury while others were not budgeted for.

Funds at the ministry were also reallocated to other programmes contrary to the Public Procurement and Disposal Act of 2005, which requires that approval of the Treasury be sought before any reallocation of funds is done. However, this was not done.

The latest revelations come as the Public Accounts Committee (PAC) of the National Assembly prepares to grill Health Principal Secretary Peter Tum on Monday over the expenditures and other attendant issues.

The grilling of Mr Tum, a recent appointee to the ministry, will determine whether the accounting officer, who was in office at the time, will have a date with the watchdog committee.

Among the issues the PS is expected to respond to include the controversial lease of medical equipment for county governments at Sh4.6 billion, the Sh4.3 billion free maternity funds disbursement to hospitals and purchase of portable clinics at Sh1 billion.


The others are Sh600 million used for construction works at Nanyuki, Lamu, Bungoma and Othaya county hospitals, the purchase of medicines and food rations and supplements at Sh512 million and the Sh3 billion in disbursements by development partners.

On Saturday, Ugunja MP Opiyo Wandayi, who chairs the PAC, said the committee expects a detailed explanation on the issues raised and why the ministry failed to avail the required documentation to the auditors at the time of the special audit.

“We have invited the PS to come and clarify all the issues raised by the Auditor-General. We expect that he will come because the mood of the public is expectant,” Mr Wandayi said.

For instance, on the portable clinics, the audit established that M/s Estama Investments Limited was contracted to supply the equipment at Sh1 billion.

Though the items were procured, they were not factored in the annual procurement plan for the financial year 2014/15 as required by the Public Procurement and Disposal Act of 2005.


“The ministry initiated the procurement process for the portable clinics without evidence of availability of sufficient funds, which is a requirement under the law. Based on the aforementioned, the ministry reallocated funds from the other programmes without the approval of the Treasury,” Mr Ouko notes in the audit.

The affected programmes were family planning, maternal and child health programme Sh200 million and medical equipment services Sh600 million.

Further, an allocation of Sh270 million from the supplementary budget was used to partly finance the expenditure of Sh282 million for supply of laboratory consumables and blood bags which do not relate to portable the Treasury.


Interestingly, at the time the special audit was being concluded early this year, the portable clinics had not been put to any use and were still held up at the National Youth Service (NYS) yard in Miritini, Mombasa. The portable equipment was meant for the counties.

“The special audit noted physical wear and tear of the containers and was uncertain of the content of the containers as they were inaccessible for verification,” the audit says.

Mr Ouko has also questioned the procurement of the Sh4.6 billion medical equipment through direct tendering saying that the ministerial tender committee did not record in writing the reason for using restricted tendering process contrary to the procurement law of 2005.