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Auditor-General Edward Ouko has raised doubts over the recoverability of Sh3.4 billion owed to the Kenya Medical Supplies Authority (Kemsa) by the Ministry of Health and the counties.
In his latest report for the year ended June 2017, Mr Ouko pointed out that the ministry owes Kemsa Sh1.1 billion while the counties owe it Sh2.3 billion.
“As similarly reported in the previous year, the receivables from exchange transactions balance of Sh3,964,035,099 reflected in the financial statement as at June 2017, includes long outstanding receivables balance totalling Sh3,404,520,984, comprising the Ministry of Health and counties, whose recovery is doubtful,” the report says.
Nairobi owes the most (Sh285 million), followed by Nakuru (Sh147 million) Narok (Sh98 million), Kitui (Sh97 million), Kilifi (Sh96 million), Homa Bay (Sh91 million) and Nyeri (Sh90 million).
“No explanation has been provided by the Kemsa management for failing to recover these long outstanding debts,” Mr Ouko adds.
Kemsa has an agreement with the counties through which they should pay within 45 days after the delivery of drugs and medical supplies.
The ministry’s debt arose from the supply chain services offered by the medical agency to various national programmes under the ministry, including family planning and the East Africa Public Health Laboratory Networking Project.
Kemsa Chief Executive Officer Jonah Manjari told the National Assembly’s Public Investments Committee (PIC) that the management has been following up on the ministry’s debt through correspondence with the principal secretary and meetings with top ministry officials.
On the county debts, Dr Manjari said the agency has so far collected Sh1.9 billion.
Mr Manjari said the agency is constantly communicating with the counties, and that there are signs that they will clear their debts.
He further said the agency was told by Cabinet Secretary Sicily Kariuki not to deny counties medical supplies despite their outstanding debts.
“Kemsa has since written to the Principal Secretary, who has referred the matter to the National Treasury to provide funds to clear the outstanding amount. Kemsa is seeking this committee’s assistance to recover the debts,” Dr Manjari told the committee chaired by Mvita MP Abdulswamad Nassir.
“The debt remains valid and that is the reason it formed part of the receivables from exchange transactions,” he added
He explained that there was reduction of payment by the counties last year since many of them went through leadership transitions.
Other counties with big debts include Meru (Sh78m), Bomet (Sh63m), Kakamega (Sh62m), Murang’a (Sh61m), Machakos (Sh59m), Wajir (Sh56m) and Siaya (Sh51m).
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