Kenya’s largest referral health facility, Kenyatta National Hospital (KNH), lost more than Sh1.5 billion in a series of fraudulent transactions that were dominated by illegal staff compensation and diversion of its funds at the parent ministry.
A damning Ministry of Health internal audit report seen by the Business Daily shows the money was lost in the 2014/15 and 2015/16 fiscal years, with the auditors saying more may have been lost through improper accounting and careless debt management.
The biggest chunk of the hospital’s funds (Sh1.4 billion) was swindled in a grand scheme of extraneous allowances and locum fees — paid to doctors hired on a temporary basis — which the audit found inappropriate.
“The locum of approximately Sh410 million and extraneous allowance of Sh717 million were inconsistent in that, if the health personnel were working extra hours (the criteria for paying extraneous allowance) there would be no need for locum,” the report says, adding that “allowances totalling Sh1.4 billion, among others (which appear ineligible) were part of what contributed to the highly inflated and unsustainable wage bill.”
Open to scrutiny
Health secretary Cleopa Mailu yesterday said that his ministry was treating corruption allegations within its ranks with the “seriousness it deserves”.
Dr Mailu was reacting to yesterday’s Business Daily exposé that made public an internal audit report’s finding that top Ministry of Health officials may have stolen up to Sh5 billion of taxpayer funds in a single financial year.
“We are open to internal and external scrutiny to ensure transparency and proper utilisation of allocated funds,” said Dr Mailu.
The questionable payments at KNH saw the facility’s wage bill rise to Sh7.4 billion, consuming 57 per cent of the hospital’s total expenditure of Sh13 billion in the fiscal year ended June 2016.
KNH paid a whopping Sh4 billion in allowances or 119.6 per cent of its Sh3.4 billion basic salaries bill — a position the audit found abnormal because a large part of the allowances is driven by double payments and medical staff absconding duty, leading to the hiring of temporary replacements.
KNH has 200 doctors and 1,718 nurses but 95 per cent of services in the accident and emergency department were rendered by locum medical staff, raising audit queries.
“This raises a red flag as to whether the doctors and nurses employed permanently do attend to their duties,” the report says, adding that the prevalent absenteeism is an indicator that the professionals are engaged in private practice.
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Credit: Business Daily
