Audit reveals poor planning, weak controls in Sh7.2bn health initiative

A joint health project between Kenya and Denmark meant to improve services for pregnant women and children has been thrown into disarray after serious funding and accountability problems emerged across several counties.

The Sh7.2 billion Danida Primary Healthcare (PHC) support programme was designed to provide critical services such as antenatal care, immunisation, family planning, and skilled birth attendance.

However, delays in disbursement, failure to meet funding obligations, and weak internal controls have derailed its impact.

The Auditor-General Nancy Gathungu, in a report on the State Department for Medical Services, said the Ministry of Health only disbursed Sh440.9 million on June 21, 2024—barely a week before the close of the financial year—forcing counties to rush implementation or delay projects altogether.

"Analysis of Danida PHC special purpose account statements from the counties revealed that the funds were transferred on June 21, 2024, nine days before the closure of the financial year," said Ms Gathungu.

Under the terms of the partnership, which began in 2021, Denmark pledged Sh3.6 billion, with counties required to match this with equal contributions.

But the report shows only 36 counties received funding amounting to Sh1.66 billion by June 2024, which was under half of Denmark’s commitment.

The remaining 11 counties failed to get any disbursement due to not providing the required counterpart funding.

According to the audit, Sh136.5 million had been allocated to the 11 counties during the financial year ending June 2024, but none of the funds were released due to their failure to meet the set conditions.

"In the circumstances, programme activities were not implemented in the 11 counties that did not meet the funding requirements, resulting in denial of essential primary healthcare services to the public," said the Auditor-General.

Even in counties that received the money, not all managed the funds as required.

The audit found that eight counties had not transferred Sh87.6 million to the project accounts by August 2024, two months after the financial year ended.

An additional six counties delayed moving Sh45.25 million to health facilities for up to two months, affecting service delivery.

Counties were required to provide a combined total of Sh450 million during the 2023/24 financial year.

However, 12 counties failed to contribute their share, amounting to Sh102.67 million.

The situation worsened with findings of weak internal controls at the facility level.

A review of 17 health facilities in Laikipia, Murang’a, and Isiolo exposed several financial and procedural flaws, including non-remittance of statutory deductions, unapproved casual hiring, and unaccounted funds.

Procurement rules were also breached, and some facilities did not reconcile their bank accounts.

"Physical verification of 17 healthcare facilities in three counties (Laikipia, Murang’a, and Isiolo) sampled revealed various internal control weaknesses such as inadequate financial accountability: uncontracted casual worker accumulated casual wages, non-compliance with statutory worker benefits deduction and remittance, missing bank reconciliations, discrepancies in fund utilisation, breach of procurement regulations and unused funds that hindered programme implementation," the report stated.

Despite the programme’s goal of improving maternal and child health, the current challenges have cast doubt on its ability to reach its intended beneficiaries before it ends this year.