Auditor exposes rot in NTSA, NHIF payments

The deal to roll out smart driving licenses in Kenya led to the loss of roughly Kes1.2 billion through mismanagement and misappropriation, a report by the auditor general has revealed.

According to Auditor General Nancy Gathungu, NTSA’s management failed to effectively enforce the use of the five million second-generation smart card-based driving licenses.

An audit of Kenya’s smart card driving license initiative has revealed that out of the allocated Kes2.03 billion, only 4,042,050 smart cards were delivered by the supplier, with a significant portion—2,562,874 cards—remaining unused in NTSA’s storage, valued at approximately Kes788.85 million.

In addition to the smart card debacle, the audit scrutinized NTSA’s implementation of the Transport Integrated Management System (TIMS), designed to centralize vehicle registrations, inspections, and driver licensing.

“The failure to utilize these smart cards represents a serious lapse in financial management,” stated Gathungu, adding that the project failed to achieve value for the Kes1.2 billion allocated.

Despite an investment of Kes186.48 million in the Transport Integrated Management System (TIMS), the audit cited deficiencies. For instance, the TIMS, which is managed through the E-Citizen platform since March 2023, lacked comprehensive reporting capabilities, hindering accurate analysis of revenue streams across NTSA’s regional offices.

Other weaknesses identified include the system’s inability to generate detailed transaction reports and the absence of data migration from previous versions, limiting NTSA’s operational efficiency.

Moreover, crucial revenue data such as license fees and permit revenues, totaling Kes1.04 billion, could not be verified against e-Citizen reports due to system limitations. “The current access limitations and data inconsistencies undermine NTSA’s ability to validate financial statements,” stated the audit report.

At the same time, Auditor-General Nancy Gathungu highlighted an excess payment of Kes367 million in claims to contracted health facilities in Kenya under the National Hospital Insurance Fund (NHIF).

Despite hospitals billing Kes447 million, the fund disbursed Kes814 million, resulting in an unexplained surplus of Kes367 million, which the NHIF management attributed to typing errors.

Read also: Auditors miss lack of oversight in KFS imprests

Schemes where NHIF lost money

The excess payments occurred under various schemes, including the National Police Service, NHC, UHC, civil servants, Edu Afya, county, parastatal, and Linda Mama programs.

Gathungu noted, “Although management attributed the variance to typing errors made by hospital clerks while inputting bill amounts in the e-claim system, there was no evidence of reconciling the billed amount to claims paid or requests for refunds for overpayments.”

This amount is a small part of a larger issue highlighted in a new report by the Auditor General, which suggests that NHIF management failed to account for more than Kes7.4 billion in expenditures for the year ending June 30, 2023.

An analysis of bills owed to healthcare providers revealed Kes2.9 billion in respect of duplicate healthcare providers, showing the same name but different outstanding amounts and different hospital codes. Among these flagged amounts, duplicate payments amounting to Kes247 million were identified, claimed to be for the same patient.

It was also discovered that NHIF management paid Kes51 million for one patient allegedly admitted to different hospitals simultaneously. A review revealed that this amount was for 2,808 claims purportedly for the same patient.

Additionally, Gathungu said that Kes47 million paid out under the Linda Mama program could not be verified. Of this, Kes41 million was paid for normal deliveries under one patient, with 10,860 duplicate claims raised, and another Kes5.7 million was paid for caesarean deliveries for the same patient.

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