Auditor General Nancy Gathungu has unearthed anomalies in the Sh5 billion insurance cover for the employees of the National Police Service (NPS) and Kenya Prisons Service (KPS).

In the latest report for the financial year 2023/2024, Gathungu regretted that there were anomalies in the entire contract despite it being extended for a further three months to March 2024 at a premium of Sh1.2 billion.

The cover, which covered officers beginning January 1, 2023, to December 31, 2023, and which catered for 141,961 persons (NPS 109,557 and KPS -32,404) comprised of the Group Life Cover, Work Injury Benefits Act (WIBA) and Group Personal Accident Cover (GPA).

According to the report, a review of insurance records reveals anomalies in various premiums. With regards to Group Life Benefits, the report shows that although the contract provides that upon the death of a member, the member declared next of kin shall be paid a lump sum compensation of five years’ annual basic salary, at the time of audit in the month of November, 2024, the insurer had not paid 21 claims totalling Sh43.5 million.

This the report says is contrary to the contract sum terms that state that claims shall be paid within five days after notification and provision of all documents.

Injury claims

On injuries that occurred out of an accident or as a result of illness as provided for under GPA, the contract says that such members shall be entitled to compensation for loss of gross salary up to a maximum period of two years subject to the prevailing Human Resources (HR) Policy at the time of injury or illness.

However, the report reveals that insurance records at the time of the audit in November 2024, the insurer had not settled 262 unpaid injury GPA claims despite having been notified.

Under WIBA, which the contract provides that temporary disablement be compensated through a periodical payment equivalent to the members’ salary, as long as the temporary disablement continues but not for a period that exceeds twelve months, the report reveals that at the time of audit in the month of November 2024, the insurer had not settled 509 claims.

Further, the report states that although the contract provides that death under WIBA or as a result of occupational accident be compensated at a rate of eight years, the gross salary of the beneficiary records provided for audit revealed the insurer had not settled two death claims.

“ln the circumstances, management did not adequately monitor the contract to ensure that the contract terms are complied with and ensure there is value for money and benefits to members from the contract,” the report states.

The report also raises concerns over anomalies in the provisions of the comprehensive cover by the defunct National Hospital Insurance Fund (NHIF).

Among the issues raised include unremitted Ex Gratia amount from NHIF, unpaid last expense under medical cover as the report shows that during the time of audit in November last year, 51 claims of members totalling Sh8.7 million, despite being dispatched to NHIF, had not been paid.

Stalled projects

Aside from the insurance cover, the NPS is also on the spot over other issues, including the stalled projects that have been abandoned, delays in the separation of electricity meters and non-adherence to the one-third basic salary rule.

On stalled projects, the NPS is on the spot over the abandonment of construction works at Laisamis police station and delays in the administration of police service projects amounting to Sh14.8 million.

On one third basic salary rule, the report raises concerns that 36,662 employees earned a net salary of less than one-third of the basic salary which is contrary to section 19 (3) of the Employment Act.