Audit reveals Sh955 million collected by hospitals not deposited in county accounts
The money, generated from patient fees, pharmacy sales, laboratory services, outpatient visits, and inpatient care, was supposed to be deposited into the County Revenue Fund (CRF) for accountability before being spent.
Counties are on the spot after an audit revealed that Sh955.8 million collected from hospitals was never deposited into official county revenue accounts.
The latest report by Auditor General Nancy Gathungu shows that 18 Level Four hospitals and one Level Five hospital withheld the funds during the financial year ending June 2024, in violation of the Public Finance Management Act.
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The money, generated from patient fees, pharmacy sales, laboratory services, outpatient visits, and inpatient care, was supposed to be deposited into the County Revenue Fund (CRF) for accountability before being spent.
Instead, the audit established that hospitals diverted the revenue, undermining transparency in the use of public funds.
Bungoma County Referral Hospital led the list with Sh363.6 million not banked, followed by Naivasha County Referral Hospital at Sh299.5 million. Kajiado County Referral Hospital failed to transfer Sh91 million, while Bahati Sub-County Hospital did not remit Sh58.7 million.
Other facilities in the spotlight include Kangundo Level Four (Sh26.1 million), Lamu County Referral (Sh18.7 million), Miathene (Sh16 million), Kiandege Level Four (Sh15.3 million), and Kilungu Sub-County Hospital (Sh14.9 million).
Also flagged were Langalanga Level Four with Sh12.2 million, Tawa Sub-County with Sh10.7 million, Marindi Level Four with Sh8.5 million, Ikutha Sub-County with Sh7.8 million, Kabazi Sub-
County and Matuu Level Four with Sh4.7 million each, and Soin Sub-County with Sh1.3 million.
Nyamaraga Level Four, Suba, and Wesu hospitals were cited for failing to bank smaller amounts of Sh990,000, Sh861,563, and Sh233,126, respectively.
The Auditor General stressed that the law requires counties to remit all collections into the CRF before expenditure.
“Audit review revealed that revenue from exchange transactions amounting to Sh955.8 million from 18 Level Four hospitals and one Level Five hospital, was not paid into their respective County Revenue Fund accounts,” she wrote.
“This is contrary to Section 109(2) of the Public Finance Management Act, 2012, which requires the County Treasury for each County Government to ensure all money raised or received by or on behalf of the County Government is paid into the County Revenue Fund account.”
The audit covered 250 hospitals nationwide and found additional irregularities. Six health facilities could not account for Sh214.3 million in collected funds. They included Nyahururu County Referral Hospital, Mpeketoni Sub-County Hospital, Ruiru Level Four Hospital, Rumuruti District Hospital, Mwingi Level Four Hospital, and Ojola Sub-County Hospital.
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