The Moi Teaching and Referral Hospital in Eldoret could face serious financial problems for failing to recover billions of shillings from debtors.
An audit report tabled in Parliament during a special sitting shows the hospital is unable to recover money
from corporate and individual clients, medical service providers, NHIF civil service medical scheme and disputed assets.
Auditor General Edward Ouko’s
report for year ended June 30, 2015, shows more than Sh984 million remains uncollected.
“No reason has been provided for failure to collect debts and when they fall due,” the report says.
Corporate client debtors owe the hospital Sh431.6 million, some dating back to 2013-14 and prior years.
Two firms contracted and paid Sh20 million and Sh68 million each to offer medical care to MTRH employees remains unrecoverable.
“The claims have have been outstanding long after contracts with the two firms were terminated. No evidence was availed for audit review on measures being taken by the hospital to ensure the Sh88 million is recovered,” the report says.
The hospital claims Sh85.6 million for civil service medical scheme from NHIF management following an agreement allowing the partnership, the report says.
Ouko said the reason for non-settlement of the claim could not be confirmed because the contract entered between the hospital and the fund stating party obligations was not provided. Long outstanding debts from individual clients stand at Sh775.9 million.
Ouko said he fears it could be difficult to recover the money because it was secured with “very weak collateral”.
“The debts were secured with ID cards, commitment letters and title deeds,” the auditor says.
Ouko said the possibility of recovering the cash appears remote and the management has not indicated measures to have the amounts collected.
He adds that the management has not initiated measures to forestall recurrence of similar situations that affects cash flow and the hospital’s operations.
The hospital is on the spot for not recovering money from accounting officers who colluded between July 2014 and January 2015 to steal Sh9.9 million from Sh12.9 million government grants and cost sharing.
Ouko says no loss was charged against the income, despite the management telling auditors that the responsible officers were facing legal action.
“The financial statements for the year under review did not fully comply with International Public Sector Accounting Standards, therefore the net loss of Sh149 million for the year ended June 30, 2015, is misstated by Sh9 million,” he says.
The audit also raises questions on MTRH disputed land ownership worth Sh71 million with Uasin Gishu Memorial Hospital.
The court case to determine the real owner has been pending for five years.