Un­col­lected Sh984m puts MTRH on spot

Au­di­tor says money se­cured with weak col­lat­eral, may be hard to re­cover

The Star (Kenya) - - Politics - SA­MUEL KISIKA @KisikaSam

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 non­set­tle­ment 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.


Au­di­tor Gen­eral Ed­ward Ouko be­fore a Par­lia­men­tary com­mit­tee on June 30

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