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The Sick Hospital? How Nairobi Hospital Lost Billions Within A Year

Nairobi Hospital
The Nairobi Hospital [PHOTO/ COURTESY]

Nairobi Hospital lost at least Ksh2.2 billion within one year due to mismanagement, a new audit report by Grant Thornton has revealed.

The hospital could not explain a variance of Ksh2.2 billion between its two internal billing systems – Kranium and Navision – in billing and receipts.

“As at December 31, 2019, the total inpatient and outpatient revenue recorded on Kranium for the Financial Year 2019-20 amounted to Ksh12.8 billion. The total revenue recorded on Navision amounted to Ksh10.6 billion resulting in an unexplained variance of Ksh2.2 billion. This is equivalent to two months’ revenue,” reads the report in part.

Also, it was revealed that some projects had price variation orders amounting to Ksh2.8 billion, which were never discussed during board meetings.

Ksh1.4 was paid out to contractors without proper records, policies and procedures for some projects.

Grant Thornton also found out that the purchase of C-arm machine that carries out endoscopy was not done according to procurement rules.

“During the review of suppliers pre-qualification, we noted that some of the service providers did not submit mandatory documents such as completed trade reference forms, latest audited accounts, tax compliance certificates, completed supplier code of ethics and signed affidavit on bidder litigation history for the last three years,” adds the report.

As at December 2019, the hospital was owed Ksh2.8 billion by 25 debtors, with only one responding and disputing the debt.

Read: Nairobi Hospital Board Set To Kick Out Robert Shaw For Exposing Rot In The Facility

“In our view, there is need to investigate credit balances in depth and reconstruct the debtors account afresh,” reads the report.

Some debtors had signed agreements amounting to Ksh77.2 million without security, the audit found.

“No guarantee was provided for Ksh98.4 million, which constituted 31 per cent of entire cash amounts,” reads the report.

The audit also found several cases of improper staff dismissals which ended up costing the company, conflict of interest in hiring of key staff, unfair and unprocedural pay hikes for select staff and interference with procurement processes.

One of the staffers, a relative to former board member, had his salary hiked by the board from Ksh600,000 to Ksh900,000 without consulting the management.

The hospital lost more than Ksh300 million in fallen Imperial Bank.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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