Civil servants lose Sh3.5bn NHIF medical cover cash
What you need to know:
- Auditor-General Edward Ouko says in the audit report he submitted to Parliament last week that the NHIF had failed to account for Sh3.5 billion it spent on the medical scheme in the financial year ended June 30, 2013.
- The insurance scheme, which took effect on January 1, 2012, covers treatment, life and funeral expenses for the beneficiaries.
- The auditor also questioned the NHIF’s Sh2.5 billion investment in securities, including Sh49.5 million that the agency had deposited in Consolidated Bank on June 26, 2001.
The National Hospital Insurance Fund (NHIF) has failed to account for nearly three quarters of the Sh4.3 billion it received from the national government to finance a medical insurance scheme for the military and civil servants, Auditor-General Edward Ouko says in a newly released report on the state of the agency’s finances.
Mr Ouko says in the audit report he submitted to Parliament last week that the NHIF had failed to account for Sh3.5 billion it spent on the medical scheme in the financial year ended June 30, 2013.
The report says accounting for the funds was made even more difficult by the fact the NHIF’s management could not provide basic information such as the number of beneficiaries covered by the insurance scheme and returns from the health service providers confirming the identity and number of officers attended to.
The report, which National Assembly Majority Leader Aden Duale tabled in the House last Thursday, says auditors were unable to ascertain whether the Ministry of Public Service and the disciplined forces got value for the billions pumped into the medical scheme.
PROPRIETY OF EXPENDITURE
The government set aside Sh4,324,546,417 for the medical insurance scheme that is administered by the NHIF.
Mr Ouko says that while there was evidence showing that the ministry released Sh4,324,546,417 to the NHIF and proof that Sh3,501,806,538 of the amount was disbursed to contracted service providers as benefit-expenses, there were no service delivery records.
“Reconciliations from the ministry on the number of beneficiaries covered in the insurance scheme and accountability returns from health facilities on the number of civil servants and disciplined services attended to have not been made available for audit review,” the report says.
“In the circumstances, it has not been possible to confirm the propriety of the expenditure of Sh3,501,806,538 included in the benefit-expenses in the Statement of Comprehensive Income for the year ending June 30, 2013,” Mr Ouko says in the report dated April 28, 2014.
The government launched a new health insurance scheme for civil servants and members of the disciplined forces in early 2012, offering State employees medical cover for the first time.
Beneficiaries of the scheme can access health services from public, mission and selected private hospitals.
The scheme covers about 220,000 government employees, members of the disciplined forces, their spouses and three children under the age of 18. Teachers are excluded from the scheme.
The insurance scheme, which took effect on January 1, 2012, covers treatment, life and funeral expenses for the beneficiaries.
Under the life segment of the scheme families of deceased employees receive a lumpsum in the event of their death and are paid additional money to cater for burial expenses.
DISPUTED LAND
Mr Ouko separately found that during the year under review, the NHIF management spent Sh542.5 million without the approval of the minister and the Treasury as required by law.
The expenditure relates to payments made to a consulting firm that worked on drawings and designs for the Karen Resource Centre. The money is included in the property, plant and equipment balance of Sh12.5 billion.
The audit further queries the accuracy of declared NHIF assets, saying the land valuation of Sh298.6 million included Sh93.7 million in respect of LR 24968/2 measuring 10 hectares situated in Karen.
“Ownership of this particular parcel of land is in dispute and the matter is in court,” Mr Ouko says of the plot that the fund acquired in 2001/2 at a cost of Sh93.7 million to build the resource centre.
The NHIF management then commissioned consultants to conduct feasibility studies on the project. The audit report shows that the consultants did the work and submitted their report together with a fee note of Sh734.5 million.
Like in the previous audits, Mr Ouko says the NHIF has not been able to justify a 337 per cent cost escalation for the multi-storey car park in Nairobi’s Community Area. The facility was built at a contract sum of Sh909.7 million.
The article first appeared in The Business Daily.
