NHIF put on the spot over KSh200 million spend in excess
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NHIF put on the spot over KSh200 million in police cover fund spend in excess according to the audit report
NHIF put on the spot over KSh200 million in police cover fund spend in excess according to the audit report.
In the latest report by Auditor-General Nancy Gathungu, the National Health Insurance Fund (NHIF) is unable to explain how it spent Sh200 million more than the lost insurance coverage for police officers.
The Sh4.79 billion comprehensive medical cover contract for the police, which was awarded to NHIF on September 26, 2017, included the excess of loss cover amount, also known as an ex-gratia claim, according to the audit report on the accounts of the Interior Ministry for the 2021/22 fiscal year that is currently before Parliament.
The cover was a two-year contract from October 1, 2017, to September 30, 2019, but was later extended to June 30, 2020.
The audit has also been flagged in the accounts of the Interior for the financial year 2018/19.
The insurance cover contract for the police had the Sh200 million ex-gratia funds allocated every year over and above the contract sum for the duration of the contract and was meant to cushion the officers who may have exhausted their annual cover limits but need medication.
The contract further provides that any request for the excess of loss cover can only be authorized by a standing committee headed by the Inspector General of Police (IGP).
This means that NHIF was bound not to use the money without the mandatory approval of the standing committee.
However, according to the audit report, a review of the contract documents and payment vouchers provided to the auditors revealed that the standing committee did not provide the required approval for payment of any ex-gratia claims for the year under review.
“This was contrary to the agreement. In the circumstances, the State Department did not obtain value for money on expenditure for the provision of comprehensive medical cover,” reads the audit report.
Failure to account for the funds has seen the Interior Department cited adversely by the AG’s reports.
Clause 6.21 of the agreement states that there shall be ex-gratia of Sh200 million “and the ex-gratia claims shall be approved by the standing committee of the client before any payment is made.”
Further, the NHIF management was required to submit a detailed quarterly report on all ex-gratia claims, including the value, beneficiary, background and status of the claims among others to the standing committee and any unspent amount of ex-gratia at the end of the contract period.
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NHIF did not provide this crucial information even as it went ahead to utilize the amount without the required approval, raising questions on whether it was used prudently.
The auditor general notes that failure to show proof of the expenditure makes it not possible to determine whether the NPS got value for money that was due for a refund at the end of the comprehensive medical cover contract.
During the period under review, Mr. Hillary Mutyambai was the IGP and Dr Karanja Kibicho was the Principal Secretary of Interior.
Dr Peter Kamunyo was the NHIF CEO. Dr. Kibicho and Mr. Mutyambai have previously said that Dr. Kamunyo has on numerous occasions frustrated their demands for accountability in the utilization of the funds.
For instance, on February 19, 2021, Mr. Mutyambai wrote to the then NHIF boss demanding that any explanation on the expenditure of the amount must include the beneficiary’s name, medical institution, amount, member’s name, and the date of medication, job group, rank and the total excess of loss cover among others as provided for in the contract.
The details were crucial to enable them adequately respond to the Public Accounts Committee as it considered the 2018/19 audit queries.
On June 30, 2021, the medical insurance contract was awarded to NHIF to the tune of 3.29 billion.
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