Nearly Sh1 billion collected from county hospitals was never deposited into official county accounts in the year ending June 2024, exposing gaps in the handling of public funds by devolved units.

The latest audit by Auditor General Nancy Gathungu shows that Sh955.8 million from 18 Level Four hospitals and one Level Five hospital was diverted instead of being remitted to the County Revenue Fund (CRF) as required by law.

The report reveals that the money was generated through user charges, laboratory tests, pharmaceutical sales, outpatient visits, and inpatient services, but was not captured in the CRF for accountability and spending approval.

The Auditor General warned that this breach undermines transparency and increases the risk of misuse of funds.

Bungoma County Referral Hospital recorded the highest unbanked revenue at Sh363.6 million, followed closely by Naivasha County Referral Hospital at Sh299.5 million.

Kajiado County Referral Hospital failed to remit Sh91 million, while Bahati Sub-County Hospital withheld Sh58.7 million.

Other hospitals in the list included Kangundo Level Four (Sh26.1 million), Lamu County Referral (Sh18.7 million), Miathene (Sh16 million), Kiandege Level Four (Sh15.3 million), and Kilungu Sub-County (Sh14.9 million).

Langalanga Level Four Hospital failed to remit Sh12.2 million, Tawa Sub-County Sh10.7 million, Marindi Level Four Sh8.5 million, Ikutha Sub-County Sh7.8 million, Kabazi Sub-County Sh4.7 million, Matuu Level Four Sh4.7 million, and Soin Sub-County Sh1.3 million. Nyamaraga Level Four, Suba, and Wesu Sub-County hospitals had the smallest amounts unbanked, at Sh990,000, Sh861,563, and Sh233,126, respectively.

The Public Finance Management (PFM) Act, 2012, obligates counties to deposit all revenue collected into the CRF before expenditure.

“Audit review revealed that revenue from exchange transactions amounting to Sh955.8 million from 18 Level Four hospitals and one Level Five hospital, was not paid into their respective County Revenue Fund accounts,” wrote Gathungu in her latest report.

“This is contrary to Section 109(2) of the Public Finance Management Act, 2012, which requires the County Treasury for each County Government to ensure all money raised or received by or on behalf of the County Government is paid into the County Revenue Fund account.”

The audit, which reviewed 250 hospitals across the country, also found that six other facilities failed to account for Sh214.3 million.

These were Nyahururu County Referral Hospital, Mpeketoni Sub-County Hospital, Ruiru Level Four Hospital, Rumuruti District Hospital, Mwingi Level Four Hospital, and Ojola Sub-County Hospital.