Public hospitals in Kenya failed to collect Sh11.4 billion in revenue during the year ending June 2024, exposing the healthcare system to possible service disruptions and tighter financial constraints, Auditor General Nancy Gathungu has revealed.
“The audit review revealed that 223 hospitals had uncollected revenue amounting to Sh11.4 billion, comprising Sh9.9 billion from exchange transactions, whereas an amount of Sh1.5 billion was from non-exchange transactions,” Gathungu noted in her latest annual report.
High-profile hospitals with the largest uncollected amounts include Moi Teaching and Referral Hospital at Sh4.2 billion, Kenyatta University Teaching, Referral and Research Hospital at Sh1.7 billion, and Kenyatta National Hospital at Sh5.7 million.
Exchange transactions refer to payments for services such as consultations, surgeries, or diagnostic tests made by patients or third-party payers, including insurers. Non-exchange transactions are revenues received without the direct provision of services.
The audit further highlighted weaknesses in revenue management across public hospitals. Eighteen Level 4 hospitals and one Level 5 hospital failed to transfer Sh955.7 million from exchange transactions to their respective County Revenue Fund accounts, contrary to Section 109(2) of the Public Finance Management Act, 2012, which mandates that all money raised or received on behalf of the county be remitted to the fund.
Additionally, six hospitals recorded unaccounted-for revenue totalling Sh214.3 million. These included Nyahururu County Referral Hospital (Sh188.4 million), Mpeketoni Sub-County Hospital (Sh12.2 million), Ruiru Level 4 Hospital (Sh10.6 million), Rumuruti District Hospital (Sh2.7 million), Mwingi Level 4 County Hospital (Sh0.17 million), and Ojola Sub-County Level 4 Hospital (Sh0.1 million).
Other irregularities were noted in 82 hospitals, amounting to Sh5.97 billion. These included undisclosed revenue from exchange and non-exchange transactions, as well as unsupported revenue in both categories.
The Auditor General has urged counties to urgently strengthen hospital financial management to prevent service disruptions and ensure healthcare funding is fully collected and properly accounted for.
