• The county spent Sh43.03 million more for the second contract in spite of the reduction of the number of employees.
• In total, the county would have saved Sh49.53 million had it paid the sums captured in the initial contract and retained the same for the second.
Image: ALICE WAITHERA
Murang’a taxpayers could have lost close to Sh50 million in a questionable medical cover deal between the county government and the National Hospital Insurance Fund.
The 2018-19 audit report reveals the county paid the national health insurer Sh6.5 million more than the contract sum for the initial contract for medical policy cover for 2,088 employees.
According to the report by auditor general Nancy Gathungu, the county had awarded the contract at a sum of Sh67.02 million but paid the insurer Sh73.52 million.
The one year contract ran from February 1, 2018 to January 31, 2019.
The county signed a new contract with the firm on July 2019 for enhanced terms at a premium of Sh110.07 million for 2,006 staff covering May 1, 2019 to April 30, 2020.
As a result, the county spent Sh43.03 million more for the second contract in spite of the reduction in the number of employees.
In total, the county would have saved Sh49.53 million had it paid the sums captured in the initial contract and retained the same for the second one.
“However, the management has not provided an adequate explanation for the steep rise in the cost of the premium in spite of the reduced number of employees covered,” the report read.
Gathungu stated that Governor Mwangi Wa Iria led administration could also not justify backdating of the contract signed on July 15, 2019 to May 1, 2019.
“As a result of these anomalies, the accuracy and validity of the expenditure totalling Sh73.52 million incurred on comprehensive cover for the year ending June 30, 2019, and the enhanced contract of Sh110.07 million has not been confirmed,” the report says.
The county was also put on the spot for failing to explain the hiring of 46 casual workers to process NHIF claims for the months of May, June and July 2018.
The county spent Sh13.09 million on the recruited casuals but did not provide crucial evidence to show that the posts were advertised and appointment letters issued to them.
“Signed muster rolls showing the pay rates, identities of the payees and the sums paid to them were not availed for audit,” the report shows.
In the report that reveals plunder of public resources, Murang’a government has been indicted for failing to account for Sh252.62 million for the year ending June 30, 2019.
The funds were spent on purchase of certified seeds, breeding stock and live animals.
The county supplied coffee and maize to farmers with Boma manure at a cost of Sh69.34 million. It also disbursed Sh42.60 million to 10 tea factories for improvement of factory infrastructure.
However, in what raises doubts on the expenditures, the county did not avail tender documents for the supply and transportation of the manure and signed list of beneficiaries.
Gathungu also raised concerns about the biological assets, including diary animals owned by the county.
The devolved unit did not value or disclose the assets in its register thus exposing them to risk of loss.
The auditor also flagged irregular payment of Sh16.53 million made to the Kenya Revenue Authority as penalties and interest on PAYE.
The payment was made from the development vote instead of the recurrent vote stalling the projects for which the funds were meant for.
“By making the payment from the development vote, management contravened section (1) (b) of the Public Finance Management Act, 2012 which prohibits accounting officers from authorising the transfer of monies appropriated for capital expenditures,” the report read.
(Edited by Bilha Makokha)