KNH payment system under audit amid fears millions have been lost

A section of the Kenyatta National Hospital in Nairobi.  

Photo credit: File | Nation Media Group

The Auditor-General’s office is undertaking a forensic audit of the payment system of Kenyatta National Hospital (KNH), following concerns of possible fraud that could have led to the loss of an undisclosed amount of money.

During an audit of the hospital for the year to June 2023, Auditor-General Nancy Gathungu revealed weaknesses in the management of the payment system that could expose more rot, leading to the investigation that is still ongoing.

“The Office is currently undertaking a forensic audit on the payment system at the hospital. The forensic audit was informed by a preliminary review of the payment system which pointed to possible fraudulent activities and loss of funds,” Ms Gathungu said in the report on KNH, for the 2022/23 financial year.

The investigation by the Auditor-General is a vote of doubt on one of Kenya’s largest hospital’s payment system- a channel through which Kenyans pay hundreds of millions of shillings every year, in order to access healthcare services.

KNH is Kenya’s largest hospital, operating with a bed capacity of 2,400 beds and overall attending to more than 1.7 million Kenyans annually, based on the hospital’s records.

The Auditor-General indicated that the investigation was ongoing by March when she concluded the report on the financial statements of KNH.

The KNH report for the year to June 2023, exposed weaknesses including discrepancies in records of figures of payments processed in the system and amount paid in the bank.

“Review of the Hospital payment systems revealed that the same payment voucher would appear in different systems with different amounts and details.

“Further, analysis revealed amounts of Sh19,269,324 were processed in the QuickBooks System but the amount paid in the bank was Sh22,048,014 resulting to an overpayment by Sh2,778,689,” the Auditor-General stated, concluding that the circumstances raised doubts on “the effectiveness of internal controls in the system used for processing payments.”

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