Audit exposes waste, delays, and poor procurement in county hospitals

Millions of shillings meant to improve healthcare services across several counties have gone to waste due to poor procurement practices, delayed projects, and abandoned facilities, according to Auditor General Nancy Gathungu’s latest report.

In Nairobi County, the audit revealed that Sh169.4 million spent on completing the Modern OPD Complex at Mutuini Hospital lacked proof of regularity and value for money.

Initially, the project was awarded to a contractor for Sh149 million, with a completion time of 20 weeks.

However, after reaching only 55 percent completion, the contractor stalled and was paid Sh84 million.

The county then engaged a new contractor to complete the work at a cost of Sh236.5 million over 18 months.

However, the Auditor General raised concerns about the addition of an extra floor and the sharp increase in costs.

"In addition, awarding Sh236 million for completion works is deemed irregular, as the estimated cost for the remaining 45 per cent of the project under the initial contract amounted to Sh67 million," Gathungu stated.

"This implies that the additional cost of Sh169 million for an extra floor exceeded the original contract sum of Sh149 million, which was intended for a two-storey building," she further noted.

A visit to the site in October 2024 found that the work had again stalled and the contractor had abandoned the site.

In Kilifi County, efforts to install a County Integrated Hospital Management Information System worth Sh31.6 million were unsuccessful.

The report indicated that out of five planned modules, outpatient, inpatient, medical health report, pharmacy and, commodity management, and financial—only three were operational, leaving the inpatient and financial modules unimplemented.

Moreover, the county failed to provide a service-level agreement and a handover report, breaching the Public Finance Management Act, 2012.

Kilifi County also faced queries over advance payments made for a CT scan machine, which cost Sh75.9 million.

Although the payment was made in June 2024, the machine had not been delivered by October 2024 during the audit.

The county had also procured an incinerator at Sh33.5 million, delivered in March 2024, but it remained unused months later.

Similarly, a digital X-ray machine purchased for Sh14.5 million was found still stored and unused eight months after its delivery in February 2024.

“In the circumstances, management was in breach of the law and value for money on the expenditure of Sh33 million spent on the equipment could not be confirmed,” the report read.

In Garissa County, the audit found that drugs worth Sh107.9 million were distributed to health facilities without proper recording in store ledgers.

Additionally, drugs worth Sh26 million were procured from a local supplier without supporting documentation.

The construction of medical records offices at Garissa County Referral Hospital also stalled at 60 percent completion despite the extension of the project deadline from April to September 2024.

By the time of inspection, the contractor was not on site.

Wajir County was flagged for questionable use of Sh156.2 million paid to the Kenya Medical Supplies Authority for drug supplies.

The auditor said that Sh97 million worth of drugs delivered to dispensaries and health centres lacked accompanying store records, receipt vouchers, or issue notes.

"In the circumstances, the accuracy and completeness of supply of medical drugs expenditure amounting to Sh97 million could not be confirmed," Gathungu observed.

Kiambu County also featured heavily in the audit report, with several cases of irregular procurement flagged.

The county paid Sh51.7 million to Kemsa for medical drugs without issuing tender documents to the supplier.

Other standard procurement steps, such as user requisition, advertisement, funds confirmation, evaluation, professional opinion, negotiations, market survey, and contract signing, were not followed.

Kemsa had also been issued a Local Purchase Order (LPO) worth Sh42 million but supplied drugs worth only Sh40 million, leading to an unexplained shortfall of Sh1.4 million.

"In the circumstances, the regularity of the expenditure totaling Sh93 million could not be confirmed," the report noted.

Further, the county was cited for delayed completion of a Sh12 million perimeter wall at Ruiru Hospital and an irregular supply of gravel worth Sh5.2 million to Burugu-Kinale Level 3 Hospital.

Other flagged projects included the award of a Sh1.15 million contract for oxygen cylinder serialisation, the construction of a level 3 health facility in Gitothua Ward at Sh46 million, and another health facility in Gachororo, where Sh37 million was paid against works valued at Sh22 million, causing an unexplained variance of Sh12 million.

The audit also highlighted issues around the refurbishment of ambulances, where the contract cost was increased by Sh3.7 million, and an overpayment of Sh4.8 million on the rehabilitation of Gachika Dispensary.