CDC hires US audit firm over Kemri cash scam

Saturday May 16 2015

The Kemri Head Office in Nairobi. PHOTO | FILE

The Kemri Head Office in Nairobi. PHOTO | FILE 

By ALLAN OLINGO, The EastAfrican

The fate of the Kenya Medical Research Institute’s next co-operation agreement with the US Centres for Disease Control (CDC) hangs in the balance after the recent cash scandal that has seen millions of dollars unaccounted for and hundreds of people out of a job.

The EastAfrican has learnt that CDC will use the findings of an audit of the Kemri Collaboration Agreement (Kemri-CoAg) accounts for the past five years as a benchmark for a new deal.

Kemri had hoped for a new five-year deal in August after the one signed in 2010 expires.

CDC ordered an audit on the programmes it jointly runs with Kemri after it emerged that the Kenyan institute had depleted its annual budget five months prematurely. In the final year of the CoAg, Kemri was awarded $14.1 million, which was to last it 12 months.

Sources say that Kemri officially made the shortfall claims to CDC in February, informing the sponsor that it was short of funds for the programmes. In its notice, Kemri said it had spent nearly all the money with less than a month’s operating cost left in its account, five months to the end of the budget period.

CDC has been collaborating with Kemri for 36 years in conducting human health research in malaria, tuberculosis, HIV/Aids, schistosomiasis and other emerging and re-emerging infectious diseases. The projects fall under a mutual, renewable five-year CoAg.

The projects are domiciled at the Kemri Centre for Global Health Research located in Kisian, Kisumu, where the major field activities of the projects are implemented.

The EastAfrican has learnt that CDC, in collaboration with the Procurement Grant Office, Centre for Global Health and other players, has already contracted a US-based audit firm to conduct the investigations into the CoAg accounts.

“The contract to do the audit was awarded last week in Atlanta and the firm is expected to begin the audit immediately,” an official said. “The audit is to determine what happened, how the funds were depleted, who is to blame and if there was pilferage of these resources.”

A month ago, Kemri suspended several senior managers as it started investigations into the embezzlement allegations.

The scandal has threatened key research projects and put hundreds of jobs at risk. Already, more than 400 contract workers have been served with notice of termination of their contracts by the end of the month.

Dr John Vulule, the director for the Centre for Global Health Research at Kemri, under whom the programmes fall, and several other senior managers were suspended over the allegations.

Late last month, The East-African reported that CDC had asked Kemri to provide a “barebones” budget for activities that need to continue so as to avoid harm to patients and clinical trial participants. Such activities include HIV care and treatment.

In addition, some activities will need to continue to avoid loss of major investments.

“Within CDC Kenya, we are exploring funding options for the ‘barebones’ budget that will have to undergo review and approval from Atlanta,” a confidential letter from CDC to Kemri reads.