Office of the Inspector General - Updates

Message from the Executive Director: Global Fund Grants in Kenya

11 March 2022

Kenya has made great progress economically in the last decade, moving from a low-income to a middle-income economy. However, the country still faces challenges in inequality, poverty, transparency, and accountability. The COVID-19 pandemic has compounded some of these challenges.

Nonetheless, Kenya continues to make progress in the fight against HIV, TB, and malaria. New HIV infections declined from 1.18 per 1,000 population in 2015 to 0.72 in 2020. HIV prevalence declined from 4.9% in 2018 to 4.5% in 2020, and the HIV incidence rate reduced from 0.27% in 2016 to 0.14% in 2020. The TB incidence rate fell by 11% between 2018 and 2020. Malaria prevalence among children under 5 declined from 8% in 2016 to 6% in 2020.

Kenya has also done very well in adapting HIV, TB and malaria programs to the COVID-19 pandemic and is successfully mitigating the pandemic’s impact on the three diseases. Partners in the country have leveraged technologies and strong networks of community health workers to continue HIV, TB and malaria services in the time of COVID-19. For the fight against COVID-19, the Global Fund has awarded US$139 million to Kenya through the COVID-19 Response Mechanism (C19RM) to support the procurement of diagnostics, personal protective equipment and oxygen, and reinforce key investments in health and community systems.

The Global Fund and partners have invested in resilient and sustainable systems for health in Kenya, including strengthening the national procurement and supply chain system. While challenges in providing end-to-end visibility of health products and strengthening accountability and reporting at all levels of the supply chain remain, the Global Fund grants were able to deliver over 90% of Global Fund-financed commodities by the end of the 2018-2020 funding cycle, including over 95% for HIV commodities. Moreover, in response to country-level supply disruptions experienced in 2020 and 2021, the Global Fund worked closely with the government of Kenya to accelerate procurement of health products for grants committed for 2021-2024 period to reduce gaps emanating from other areas of the supply chain and mitigate stock-outs of critical commodities.

Despite this progress, the 2021 audit of the Kenya portfolio performed by the OIG found that the Kenya Medical Supplies Authority’s (KEMSA) warehousing and distribution systems were affecting traceability and accountability of commodities received and distributed. The audit showed that significant improvement is needed in internal controls and assurance over the procurement and supply chain. It also found that improvement is needed in financial management and controls for better accountability, and better absorption and utilization of investments such as the C19RM funds.

The Global Fund is committed to working with the government of Kenya and partners to address the key issues and risks identified under the audit.

The Global Fund takes a keen interest in the concerns raised by the audit regarding KEMSA. The Global Fund had already responded to a decline in KEMSA’s performance due to deficiencies in the governance structures of the organization. Building on the joint Global Fund/USAID assessment of KEMSA in 2019 and recognizing the Kenya Office of the Auditor-General KEMSA audits, and the challenges at KEMSA following the 2020 corruption allegations, the Ministry of Health engaged with stakeholders, including partners, to form the KEMSA Reforms Implementation Committee (KRIC), which developed an action plan to address gaps in all the critical functions of the organization. Implementation of the KEMSA reforms action plan is ongoing under the leadership of the new KEMSA board and acting CEO, with support from the Global Fund and partners. The key objective of the KEMSA reforms is to address challenges in the national supply chain, specifically by establishing end-to-end visibility of health products and strengthening accountability and reporting at all levels of the supply chain.

KEMSA’s reform program continues to make progress. A KEMSA strategic team was recently established to steer the reform agenda toward concrete implementation, and priorities have been established and cascaded down through KEMSA’s structure. While protracted procurement processes and ongoing weaknesses in monitoring and oversight pose challenges for the achievement of programmatic objectives, improvements have already been realized in achieving timely delivery, reinforcing IT infrastructure and enhancing coordination with the Ministry of Health disease programs. The Global Fund continues to maintain regular oversight of Global Fund-financed procurements and is supporting Principal Recipients, the Ministry of Health and KEMSA in pursuing opportunities for improved controls, increased efficiencies and strong collaboration at all levels – from health facilities to counties and to the national level.

Despite the achievements to date, the Global Fund recognizes that more work is needed to respond to the impact of COVID-19 on HIV, TB and malaria programs in Kenya. Disruptions and movement restrictions have undermined the implementation of program interventions specifically at a community level and the delivery of routine testing. Treatment services at health facilities have been most affected. The Global Fund is providing strategic support to the government of Kenya and implementing partners to target their efforts and increase adaptive measures to ensure programs get back on track to achieve the targets in the fight against HIV, TB and malaria.

We thank the OIG for this audit report. The work of the OIG continues to complement the active risk management and controls put in place by the Secretariat and upholds our proactive approach of full transparency both on disclosing the issues in the implementation of our grants and in highlighting the successes we can build on in the future. We are committed to continuing our investments in Kenya as we seek to accelerate progress toward ending AIDS, TB and malaria as public health threats, defeat COVID-19 and build better defenses against future pandemics in the country and beyond.