Auditor General unmasks how NHIF payroll was abused

Even as the country digests the loss of Ksh.20 billion at the National Hospital Insurance Fund (NHIF) through fictitious medical claims, another report by the Auditor General received at the public health insurer in mid September 2023 reveals more rot  at the fund where  millions of shillings are siphoned through payroll as salaries and allowances.

The Auditor General flagged what it terms as the overstatement of staff cost. The financial reports shows that for the year ended June 2022, NHIF reported it had compensated its employees to the tune of 4.86 billion shillings.

However, the Auditor General's audit shows only Ksh.4.81billion was instead used, leaving close to 50 million shillings whose expenditure couldn't be accounted for.

The integrity of the NHIF payroll was also called into question with concerns raised about how some employees were overpaid salaries and allowances.

Fifteen staffers were overpaid a total of 536,800 shillings in the year 2021/2022 as house allowance, 17 staff members received a total of 1.62 million shillings as acting allowances, an amount that was an overpayment, while two interdicted staff members were paid more than their half basic salaries and five staffers, earned their basic salaries amounting to Ksh.8.28 million while they were on suspension.

The procurement processes at the fund were also found to have been abused. Contracts totalling to Ksh.306 million shillings were improperly executed.

The report indicates that five contracts for the period ending June 2022 raised the red flag in the sense they started being implemented  before the contract  was even signed.

The Auditor General found in its audit of the funds information systems that the fund had inflated the budget for the procurement of ICT-related licenses by up to 296 per cent.

The licenses had been projected to cost the fund 12,105,907 shillings, but the actual expenditure came to 48 million shillings.

The IT infrastructure acquired through this tenders however were not all put to use, for instance, 1700 end point antivirus licenses worth 7 million were bought, but only 823 were active, while 877 were unutilized.

The audit also found that the NHIF's database and operating systems had security challenges that exposed the funds information systems, both internally and externally to threats, with the Auditor General warning that these weaknesses could compromise the confidentiality, integrity and availability of the information, including its financial data.

Indeed, the reports flags out instances where it shows that some health care providers inflated claims through manipulation of data in the systems, while others were able to push for the payment of claims without proper documentation.

The report from the auditor general is also forming part of the investigations into the fraud at the NHIF that is currently being undertaken by the EACC.