Auditor General flags Sh11.4bn uncollected revenue in 223 public hospitals
Hospitals with the highest unpaid revenue 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.
Kenya’s healthcare system is facing financial pressure after an audit revealed that 223 public hospitals failed to collect revenue amounting to Sh11.4 billion in the year ending June 2024.
Auditor General Nancy Gathungu has warned that the delays in collection could strain service delivery and force counties to divert funds from other sectors to keep hospitals running.
“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 said in her latest annual report.
Hospitals with the highest unpaid revenue 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.
In healthcare, exchange transactions are payments made by patients or third parties such as insurers for services like consultations, surgeries, or diagnostic tests. Non-exchange transactions refer to revenue received without a direct service being provided.
The report also exposed failures in revenue management across public hospitals. Eighteen Level 4 hospitals and one Level 5 hospital did not remit Sh955.7 million from exchange transactions to their County Revenue Fund accounts, breaching Section 109(2) of the Public Finance Management Act, 2012, which requires all money raised on behalf of counties to be deposited into the fund.
In addition, six hospitals could not account for revenue totaling Sh214.3 million.
These were 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 amounting to Sh5.97 billion were found in 82 hospitals, including undisclosed income from both exchange and non-exchange transactions, and unsupported revenue records.
The Auditor General has urged counties to strengthen hospital financial management systems to ensure all revenue is collected and properly accounted for, warning that continued lapses could threaten the stability of public healthcare.
