Oct 18, 2021

Mawazo Writing Africa

Writing about the main

Broke NHIF paid retirees Sh21 million Christmas gift

The National Hospital Insurance Fund is on hand to pay retired employees Shn 21 million as Christmas gifts and appreciation even though the company’s financial condition is poor.

Auditor General Nancy Gathungu has the irregular payment in her latest Report on the company’s books of accounts for the year ended June 30, 2019.

She said the management team failed to provide a justification or basis for the payment, which put CEO Peter Kamunyo’s administration to the test.

“As a result, the appropriateness of the Sh21,762,000 spending that was paid as a Christmas gift and entered into welfare has not been confirmed,” said Gathungu.

NHIF is broke and failed its operations, reporting an operating loss of Sh3.6 billion during the year.

The fund, Gathungu said, sped Sh908 million irregularly during the year under review.

N HIF’s audit states that 156 million shredders were illegally paid as legal fees to private law firms ry on a circular from the Attorney General dated April 2014. The auditor said the transaction was irregular as opposed to attorney general approval the private law firms were not hired.

“Under the circumstances, the reasonableness of legal costs totaling 156,424,194 Shr unlawfully paid a law firm 336 million shorts for the conclusion of 6,700 contracts with health care providers, who served under the National Health Scheme.

The contracts were to be concluded at a negotiated total instruction fee of 432.8 million Short.


The law firm should continue to 43, 3 million Sh. for company search, printing, binding, travel expenses and stamp duty as well as distribution of contracts.

But the audit found that the law firm reviewed the terms of the engagement in November 2018 and added 309 contracts to be drafted, with an additional Ex pens of Sh26.7 million as legal fees.

“There was no approval from NHIF for the change. In addition, the legal service was not included in the approved procurement plan for fiscal year 2018-19, “said Gathungu.

The Public Procurement and Disposal of Assets Act 2015 states that all procurement processes are within the approved budget the procurement office.

It also provides that procurement is planned by the procurement office concerned as part of the annual procurement plan.

“The firm was not in the prequalified list” of suppliers under Violation of Section 93 (1) of the Law on Public Procurement and Disposal of Assets of 2015, “said the auditor.

The law provides that an accounting officer of a procurement agency may undergo a prequalification procedure as a basic procedure before the Acceptance of an alternative procurement method.

This should be the case, except in the case of open tenders in order to obtain the few best en qualified companies for the procurement in question.

“In these circumstances, the fund violated the law and the appropriateness of the legal fees of Sh336,339,000 paid to the law firm has not been confirmed,” said Gathungu.

The auditor also revealed that the NHIF has also irregularly hired a single-source firm to install the fund’s integrated revenue management system at 495 million short.

“There weren’t any Evidence for a tender submitted for consideration, “said Gathungu, alleging a violation of public procurement law.

The law requires that state company accounting officers make all interested parties aware of the tender.

Gathungu noted that no evidence was presented that the underlying circumstances qualify for a direct contract award.

“In these circumstances the fund has broken the law and may not have gotten good value for money to get the system, “she said.

Also paying Sh6. surveyed 0.7 million to 12 civil servants employed during the year as no recruitment support documentation was provided Audit were not provided by the Audit.

“As a result, the appropriateness of the Sh6,680,160 expenses included in staff costs for the year ended June 30, 2019 has not been confirmed . “

One of the NHIF’s settlement accounts was also overdrawn and reported a negative bank balance of 8,350 Shillings.

” Management has not provided any explanation for the bank account overdraft that violated Section 28 (4) of the Public Finance Management Regulations (National Government) of 2015. “

The regulation states that an accounting officer of a national government agency must not lead that a bank account is overdrawn.

– Edited by SKanyara