Level Four Hospitals have not been submitting financial statements for audit as required by law, a report of Auditor General Nancy Gathungu shows.
The report to the Senate Public Investments and Special Funds Committee said 193 or 54 per cent of Level 4 Hospitals have not submitted financial statements for the financial year 2021-22.
It added that 163 or 46 per cent of Level Four hospitals have not submitted financial statements for the financial year 2022-23.
“In addition, only 33 counties have submitted at least one financial statement in respect of their hospitals for the financial year 2021-22 and 2022-23,” Gathungu stated in her report.
Failure to submit financial statements is a violation of Section 164 (1) of the Public Finance Management Act, 2012, which requires the accounting officer for a county government entity to prepare financial statements in respect of the entity at the end of each financial year, in formats to be prescribed by the Public Sector Accounting Standards Board.
Further, Section 164(4) (a) of the Act requires the accounting officer to within three months after the end of each financial year to submit the entity’s financial statements to the Auditor-General.
County Governments assumed the management of hospitals within their jurisdictions, comprising of Community Facilities (Level One), Health Dispensaries (Level Two), Health Centres (Level Three), County Hospitals (Level Four) and County Referral Hospitals (Level Five).
According to the Kenya Master Health Facility list by the Ministry of Health, there are a total of 358 Level Four hospitals and 14 Level Five hospitals in the country.
The inaugural audit of hospitals as self-accounting entities was in the financial year ended June 30, 2022. Previously, Level Four and Five hospitals were audited under the County Department of Health.
“During the financial year 2021/2022, only 58 hospitals, comprising 50 or 14 per cent of Level Four hospitals and eight or 53 per cent of Level Five hospitals submitted their financial statements for audit,” Gathungu stated.
She said failure to submit the financial statements is affecting her office’s annual operational plans in subsequent years as the audit arrears increase the workload and audit scope.
