The National Health Insurance Fund (NHIF) has once again been put on the spot for misuse of funds in the latest scandal.
According to a report by Auditor-General Nancy Gathungu, NHIF paid KSh 336.3 million to a law firm that had not been cleared to bid for tenders with health providers.
Notably, the drafting which was fully paid using the taxpayers money was not part of the NHIF approved procurement plan for 2018/2019.
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Gathungu noted that the move went against the Public Procurement and Assets Disposal Act of 2015 which indicated that no money had been set aside for payment of legal service.
The report of the audited financial accounts also showed that a further KSh 156.4 million was paid to private law firms as legal fees.
The payment was made without approval from the Attorney General (AG).
The law firm which was approached to draft the contracts charged NHIF KSh 43 million.
The services included company search, printing, binding, travel costs, stamp duty and distribution of the contracts to the various hospitals and other health providers.
At the same time, KSh 432.8 million was paid as the negotiated instruction fee to draw 6,700 contracts.
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Out of this amount, KSh 336.3 million was paid to the law firm meaning that each contract costs the taxpayer about KSh 65,000 to draft.
“Under the circumstances, NHIF was in breach of the law and the propriety of the legal fee paid to the law firm could not be confirmed,” the audit report said.
Elsewhere, the audit report also shows that the NHIF board spent KSh 32.1 million in sitting allowances among other expenses for 35 full board meetings and seven meetings for its audit committee in a year.
In the process, KSh 12.5 million was spent for the meetings in sitting allowances alone.
This means that the board violated its own approved calendar of five full board meetings and four audit committee meetings for the period under review.