Civil Service Fraud

KEMRI – Madison Insurance Scandal

The Kenya Medical Research Institute (KEMRI) is as corrupt as they come. In September 2015, reports of an audit showed misappropriation of funds where the management of the institution used a lot of money, in fact, millions of dollars on travel and conferences that did not yield much return.

The US Centers for Disease Control (CDC) had demanded accountability then, but KEMRI management was non-cooperative. KEMRI had wasted resources in frivolous activities such as paying Sh750,000 to boost a administrative staff morale, KEMRI paid Sh1 million as an honorarium to an executive and splashed over Sh10 million to staff members for unauthorised travels and training in the questionable book keeping of 2014-2015.

Here below is a new scandal involving the insurance scheme.

Dear Nyakundi,

The Kenya Medical Research Institute (KEMRI) is a State Corporation established in 1979 under the Science and Technology (Repealed) Act, Cap 250 Laws of Kenya and as currently established and accredited to continue to operate as such under the Science, Technology and Innovation Act, 2013 as the national body responsible for carrying out research for human health in Kenya. As a public entity, KEMRI is government by various laws on governance, finance and procurement in the conduct of its business.

In December 2020, KEMRI awarded Madison Insurance Company a KES 157 Million contract to provide medical insurance cover to its employees. The decision to award the contract was made in total disregard of procurement laws, regulations and guidelines, and went against the advice provided by the Corporation Secretary and sentiments of the Finance committee of the Board.

The Institute’s approved budget for medical insurance was KES 108 Million for the 2020/2021 financial year. The National Health Insurance Fund, which provided medical insurance services to KEMRI in the preceding financial year, gave a quotation of KES 107 Million, while Madison Insurance Ltd. gave a quotation of KES 157 Million. Whereas the NHIF quotation proposed benefits similar to those offered in the previous year, with a last respects cover, the Madison Insurance Cover proposed restricted benefits BUT included an enhanced insurance package for the Chairman of the Board of Management, KEMRI.

A committee consisting of the Head of Finance, Head of Procurement and Corporation Secretary decided to take the offer from Madison Insurance. In order to the circumvent the process of getting approval from the Board to spend additional money not allocated in the budget, the KEMRI Director-General requested and received a positive advisory opinion from the head of procurement at KEMRI, and against the advice of some members of the Board
who had received information on the matter, proceeded to sign the contract with Madison Insurance.

A total of KES 50 million of public funds was lost through this action. Additionally, members of staff will receive a medical cover that is inferior to what NHIF offered, for the 2020/2021 financial year.

KEMRI’s Chief Executive, Dr. Yeri Israel Kombe, the perpetrator of this crime, retired from the Institute in 2018 but has clung on to the position through patronage by the Chairman. Before becoming the CEO, he was in charge of the KEMRI Food Handlers Programme in partnership with the Nairobi County Government. In that program, KEMRI lost a total of KES 120 Million and was taken to court by the county government. To date, the money has never been
recovered. During his tenure, KEMRI has lost hundreds of millions of shillings in dubious projects and irregular procurement.

Both the Chairman and the CEO of KEMRI have deep connections within the Kenyan deep state and have remained immune from investigation and prosecution for flagrant violation of the law, corruption, abuse of office and conflict of interest.

Quite clearly, the office of the Director-General must come clean on the scandal. The Directorate of Criminal Investigations must investigate the Director-General on the loss of tens of millions of taxpayer money. Both the Director-General KEMRI and the Chairman of the Board must be prosecuted for their roles in this scandal.

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