KENYA —The Auditor-General’s office has initiated a forensic audit of the Kenyatta National Hospital (KNH) payment system following concerns about possible fraudulent activities that could have resulted in the loss of an undisclosed amount of money.
This audit is critical to addressing potential financial malpractices in one of Kenya’s largest healthcare institutions.
During the routine audit of KNH for the year ending June 2023, Auditor-General Nancy Gathungu identified significant weaknesses in the hospital’s payment management system.
These vulnerabilities raised concerns about the potential for further undiscovered fraudulent activities, prompting the ongoing forensic investigation.
The forensic audit was necessitated by a preliminary review that highlighted irregularities within the payment system, suggesting possible fraudulent activities and loss of funds.
In her report on the 2022/23 financial year, Ms. Gathungu emphasized that the forensic audit aims to uncover the full extent of these irregularities.
She pointed out that the initial review indicated alarming discrepancies, such as the same payment voucher appearing in different systems with varying amounts and details.
These inconsistencies suggest that the internal controls governing the hospital’s payment processes may be ineffective.
The investigation by the Auditor-General casts doubts on the reliability of the payment system at KNH, a crucial channel through which Kenyans pay hundreds of millions of shillings annually for healthcare services.
KNH, as Kenya’s largest hospital, operates with a bed capacity of 2,400 and serves over 1.7 million patients each year. The financial integrity of its payment system is thus of paramount importance to ensure trust and efficiency in healthcare service delivery.
One of the critical findings in the Auditor-General’s report was the discrepancy between the figures recorded in the hospital’s payment system and the actual amounts paid into the bank.
For instance, an analysis revealed that Sh19,269,324 (US$148,793.08) was processed in the QuickBooks system, whereas Sh22,048,014 (US$170,249.45) was paid into the bank.
This discrepancy resulted in an overpayment of Sh2,778,689 (US$21,456.37), raising serious concerns about the hospital’s financial management practices.
Ms. Gathungu concluded that these discrepancies and overpayments cast significant doubt on the effectiveness of the internal controls within KNH’s payment processing system.
The forensic audit, which was ongoing as of March when the financial statements were finalized, seeks to provide a comprehensive understanding of these issues and recommend corrective actions to prevent future occurrences.
The findings from this audit are expected to have far-reaching implications, potentially leading to reforms in the financial management practices at KNH and possibly influencing policies in other public healthcare institutions.
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