Cronyism: Kemri executives in the eye of a storm

Executives at the Kenya Medical Research Institution are on the spot after an audit revealed serious financial malpractices that involved funds from the Centres for Disease Control.

An audit report by the Auditor General’s office has shown that executives in charge of the Kisumu research station that hosted the co-operative agreement between the two organisations awarded employees excessive salaries, employed some of them without giving them any letter, ignored procurement regulations and awarded contracts to third party firms that were not prequalified. The auditors queried how an administration officer was allowed to pocket $7,500 “to boost her morale.”

Boost morale

“On query, the executive said that the money was meant to boost her morale in line with the duties that she and other human resource officials were performing,” the report states.

Interestingly, the Kemri board sees nothing wrong in this. In its report to the Cabinet Secretary for Health James Macharia, the board says the officer could be excused because she believed that her seniors had sought the necessary approvals before awarding her the money.

In another instance, a deputy director was paid $16,000 as allowances without approvals or reasons.

Kemri also failed to ensure correct tax computations touching on 17 employees leading to a receipt of $30,000. The tax was based on graduated scale instead of the normal 30 per cent.

The accountant in charge of collaborative projects has also been put on the spot for raising $38 millions worth of payment vouchers that were not in the system and allowing third party projects to overspend by $9.9 million.

“In his response, the accountant stated that the projects operated on a reimbursement schedule while some projected delayed payment,” the report says.

The acting head of finance is also accused of failing to advice Kemri and configuring the Kemri/CDC ERP system to allow manual keying.

This failure is said to have either been as a result of capacity challenges or fraudulent reasons. The $19 million transport and other expenditure also raises queries on how the transport base manager allowed the use of documents not defined in the system to be used for expense accounting.

The audit also puts the research firm’s chief operating officer on the spot with claims that his office allowed the processing of $96,000 for travel without necessary documentation or approvals.

The officer in his response noted that his office was not in charge for the approvals.

“Expenditure was approved by Kemri’s office with authority to incur expenditure,” the officer responded to the audit queries.

Kemri director Prof Solomon Mpoke admitted that the audit has highlighted various systemic and control weaknesses in the operations of the programme.

“The auditor cautioned that the ERP system had challenges and hence the questionable reliability of the reports. Indeed, some of the figures provided were generated by the ERP system used at the time. The board has asked the Auditor General to further review and investigate the ERP system.

These findings will inform final decision in this matter and the board will not hesitate to recover any monies that are verified to have been lost,” Prof Mpoke said

OP The East African