Enhance accountability: Regulator gives ultimatum to county hospitals

County hospitals have until the end of this month to submit their views on the new reporting template which seeks to harmonise their financial statements and enhance accountability. 

In a notice, Public Sector Accounting Standards Board (PSASB) said the template, which targets 300 Level Four and 11 Level Five hospitals, will improve transparency as assets and liabilities will form part of the financial statement enabling them report separately from county government executives which is the case currently. 

Chief Executive Officer Fredrick Riaga said the fact that hospitals spend revenue collected at source as opposed to channeling them to the County Revenue Fund and then seeking approval to spend as is required by law, presents a challenge in recording and reporting finances effectively. 

This, he added, necessitates reporting in line with Public Finance Management Act, No. 18 of 2012, which requires that at the end of each financial year, an Accounting Officer for a County government entity shall prepare financial statements in respect of the entity in the formats to be prescribed by the Public Sector Accounting Standards Board.

“It further states that an Accounting Officer shall prepare the financial statements in a form that complies with the relevant accounting standards prescribed and published by the Board from time to time,” Riaga said.

The focus on county hospitals is part of a larger strategy by PSASB to transition government accounting from the current cash-based to accrual system of accounting.