NHIF Scrutinized by Public Investments Committee Over Auditor-General’s Report on Financial Irregularities

The National Hospital Insurance Fund (NHIF) faced tough questioning from the Public Investments Committee (PIC) on Social Services, Administration, and Agriculture (SSAA) on Tuesday, as it responded to concerns highlighted in the Auditor-General’s 2018/2019 report regarding its financial operations.

During a session held at Bunge Tower, the committee, chaired by Hon. Emanuel Wangwe, MP for Navakholo, reviewed several financial discrepancies flagged by the Auditor-General, particularly focusing on staff costs and procurement procedures.

One of the key points of contention was the NHIF’s staff expenditure, which amounted to Kshs. 4.87 billion. The Auditor-General’s report highlighted Kshs. 6.68 million spent on hiring twelve new officers, but it was noted that there was a lack of proper documentation to substantiate the recruitment process. Specifically, there were no records of job advertisements, shortlisting, or interview proceedings, raising concerns over the legitimacy of the expenses. Hon. Wangwe stressed, “Without complete recruitment records, we cannot confirm the legitimacy of this Kshs. 6.68 million expense.”

Another major issue raised was the Kshs. 336.34 million paid to a law firm engaged by NHIF to draft contracts with healthcare providers. The Auditor-General flagged that this firm was not listed among NHIF’s prequalified suppliers and that the procurement of its services had not followed the approved procurement plan. Furthermore, the legal firm’s terms of engagement were altered mid-process, increasing the total cost by Kshs. 26.75 million without NHIF’s formal approval. Hon. Wangwe noted the serious concerns this raised, stating, “The lack of adherence to procurement guidelines raises questions about compliance with the Public Procurement and Assets Disposal Act.”

In its defense, NHIF acknowledged some procedural oversights but explained that the urgency of implementing the government’s Universal Health Coverage (UHC) agenda had necessitated swift action. Acting CEO Mr. Elijah Wachira explained that the Ministry of Health had directed NHIF to ensure preparedness in pilot counties for UHC implementation, particularly addressing staffing gaps. “We were under immense pressure to implement UHC swiftly, which meant quickly reinforcing staffing and establishing contracts with providers,” he said. Mr. Wachira emphasized that despite the irregularities, the Board had approved measures to upgrade satellite offices and recruit additional staff to ensure effective delivery of health services.

Hon. Wangwe, however, stressed that while the UHC agenda was a priority, NHIF must still adhere to established procedures. “Contracting healthcare providers is essential, but it must be done in compliance with the law,” he noted.

The committee concluded the session with NHIF’s management promising to provide further documentation and explanations to resolve the concerns raised by the Auditor-General. Mr. Wachira expressed confidence that the fund’s submissions would sufficiently address the audit’s issues. “We believe our submissions offer adequate explanations to resolve the Auditor-General’s concerns,” he concluded.

The review of NHIF’s financial practices continues as the Public Investments Committee seeks to ensure greater accountability and transparency in public sector operations, particularly in sectors as critical as healthcare.