Audit firm denies advising ministry to lease Sh63bn medical kit

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Audit firm PKF Kenya, the financial consults for the project, told Senators they did not tell the ministry chiefs to lease.

Managing Director David Kabeberi on Tuesday told the Senate ad-hoc committee probing the scheme that the firm did not shape the ministry’s decision to lease the equipment.

“We were not consultants at that stage. We did not advise the government to acquire the equipment via MES,” Kabeberi told the committee.

Isiolo Senator Fatuma Dullo chairs the ad-hoc team.

“In fact, they were midway through the evaluation. Our roles were very specific,” he said.

Kabeberi, however, did not explain the specific role the firm was contracted to perform as he was cut short by Dullo who adjourned the meeting because some directors were not present.

According to a list of shareholders tabled before the committee, PKF has 18 directors (shareholders). The committee argued at least half of the shareholders should appear before it.

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“It is important we hold our meeting when all of them are there so that everybody is able to defend themselves. If we listen to one person, the information that we will get will be inadequate,” Nyandarua Senator Mwangi Githiomi said.

Kabeberi told the committee that the ministry did not seek the advice of the company when it varied the contract sum of the programme from the initial Sh38 billion to Sh63 billion in 2017.

A special audit by former Auditor General Edward Ouko says that PKF is the consultant that conducted a financial analysis to justify the choice of MES over a direct purchase.

The audit conducted in 2015-16 showed that the ministry procured PKF alongside M/S Iseme, Kamau and Muema Advocates (IKM) – a legal consultant, through a restricted tendering at Sh68.6 million.

The audit was done following an order by the National Assembly’s Public Accounts Committee.

“The urgency cited as a basis of using direct procurement could not be justified since procurement of legal services would have been foreseen at project initiation level and planned for adequately to allow for a competitive process,” the report reads.

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On Tuesday, the senators accused the firm of misadvising the government to go for the leasing arrangement instead of the cheaper and shorter route of direct purchase.

“The amount of money involved in this project is enormous in terms of service delivery to Kenyans. Some of the equipment is lying idle in most of the hospitals,” Dullo said.

Githiomi said, “You realise that even the goods that were recommended by PKF are very expensive. Just a trolley costing Sh280,000 and it is worth about a maximum of Sh90,000 in the market.”

The MES deal was signed at State House in 2015 between the Ministry of Health and six international equipment manufacturers for the supply of assorted medical equipment.

A fixed sum of Sh95.7 million was supposed to be deducted annually for seven years at source from each of the 47 counties to service the equipment. The figure was, however, varied along the way and the deductions increased to Sh200 million.

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