• Fund spent Sh1.4 billion in a revenue collection system, something that could have been ordinarily obtained at Sh495 million, according to confession from acting CEO.
• Last year, fund opted to purchase revenue system from Web Tribe at Sh500,000 'without the approval of ICT Authority.
Image: FILE
MPs have described fresh revelations at graft-riddled NHIF as the biggest rip-off ever witnessed.
The Public Investment Committee on Wednesday heard that officials at the National Health Insurance Fund gobbled in excess of Sh1.4 billion in setting up a revenue management system.
The oversight committee heard the Integrated Revenue Management System, which has become a query in the Auditor General’s report, was a cash cow that was used by powerful individuals at the insurer to siphon billions of taxpayers’ money.
In a new confession by acting CEO Nicodemus Odongo, the fund spent Sh1.4 billion for a revenue collection system, something that could have been ordinarily obtained at Sh495 million.
In Odongo’s narration before the legislators, Web Tribe was first contracted in 2014 as the service provider getting an average of Sh24 million per month from the members’ contributions.
This translates to an average Sh288 million the fund spend each year in the five years it outsourced Web Tribe's services for revenue collection.
Committee chairman Abdulswamad Nassir (Mvita) said, “It could have been the largest corruption this country had ever seen. Lucifer will be clapping on how genius we are in stealing."
Last year, the fund management opted to purchase the system from Web Tribe at Sh500,000 after years of leasing.
The board opted to do a direct procurement, an issue that was flagged by the Auditor General as it contravened the law on procurement.
The contract–it emerged–was also procured without any feasibility study conducted.
“Information indicates that the procurement of the system was single-sourced as no evidence of competitive bidding was availed for audit verification. This is contrary to the Public Procurement and Assets Disposal Act 2015 which requires the accounting officer to take such steps as are reasonable to bring the invitation to tender to the attention of all those who may wish to submit tenders, ” the Auditor’s report reads.
NHIF ignored head of Public Service Joseph Kinyua’s 2018 advisory that any state agency acquiring an ICT system must first get approval from the ICT Authority.
Odongo said there was no documentary evidence that the insurer sought authorisation from the authority.
“All ministries, departments and agencies that have new requirements over and above what had been initially requested will notify ICT Authority for a determination as to whether the requirements can be met within an existing framework agreement,” Kinyua said a memo dated February 23, 2018.
Committee vice chair Ahmed Abdisalam (Wajir North) and Omar Mohamed (Mandera East) demanded special audit on the procurement of the insurer's revenue management system saying there is more to the deal.
Abdulswamad directed the Fund to supply the committee with the two contracts, a list of those who sat in the tender committee and all records of payments to Web Tribe since the contract started in 2014.
Edited by R.Wamochie