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82pc of financial irregularities in Health Ministry happen after tender award

NAIROBI, Kenya, Aug 29 – A study by the Institute of Economic Affairs has established that billions are embezzled from the public coffers at the post-award stage in public procurement.

Out of 63 cases of procurement violations in the Ministry of Health identified by the Auditor General, for instance, 82 percent occurred at the post-award stage, with the rest occurring at the pre-tendering stage from 2013-2016.

The damning revelations reveal loopholes in orders and payment systems result in the highest incidences of impropriety and theft of public funds, followed by contract management and planning and budgeting.

“During the collection of data, we saw many price violations after contracts had been awarded. We saw suppliers not meeting deadlines while some extended project time,” said Jackline Kagume from IEA said while presenting the study.

“There were also stalled projects where suppliers were paid, payment of substandard goods and even payment of goods which were never delivered.”

Due to the scrutiny during the pre-tendering stage, only 16 per cent of cases were considered to have flouted procurement procedures.

“In a comparative sense, the pre-tendering and tendering processes are more exposed to transparency than the post-award phase. This is because the processes that are obscured from direct public scrutiny provide the most opportunity for the perversion of the processes,” Kagume said.

In the Ministry of Education, out of the 43 cases of procurement violations identified during the period under review, 63 percent of cases occur at the post-award stage, 29 percent occur at the tendering phase while the rest occur at the pre-tendering stage.

To reverse the worrying trend, the study recommends the adoption of open contracting principle and data standard, transparency and fairness in access to information on public procurement.

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“We also recommend for e-procurement since it is less prone to manipulation especially in the post-award stage in relation to contract management,” Kwame Owino CEO of IEA said.

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