Out of 372 Level Four and Level Five hospitals, only 209 facilities submitted their 2023/2024 financial statements to the Auditor General for audit.

 Of these, 195 out of 358 hospitals are level four while 14 are level five hospitals.

 Auditor General Nancy Gathugu said that 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 government entity to prepare financial statements in respect of the entity at the end of each financial year.

 Said Gathungu: “Therefore a total of 193 or 54 per cent of Level Four hospitals have not submitted their financial statements for the financial year 2021/2022 while 163 or 46 per cent of the level four hospitals have not submitted their financial statements for the financial year 2022/2023.”

 She added: “Failure to submit the financial statements is affecting our annual operational plans in the subsequent years as the audit arrears increase our workload and audit scope. These arrears have to be factored in the current year’s audit which in turn negatively affects the resources planned for the year and subsequently the timelines for submission of the audit reports to parliament and the respective county assemblies.”

Not adequately funded

 Gathungu also told senators that they have noted in some of the counties, the hospitals are not adequately funded despite remitting their collections to them thus affecting service delivery

 She at the same time said counties should stop blaming late exchequer releases for the accumulation of pending bills in counties.

 She said there should be a corresponding balance between exchequer releases and pending bills to the extent that they should form the first charge.

 She said: “If the pending bills are more than the exchequer release then there is fiscal indiscipline. If the Controller of Budget has approved payment to a section of suppliers why should it be voided at the tail end of the payment?”

 While appearing before the Senate County Public Investments and Special Funds Committee, Gathungu said that counties normally get funding for the whole year and thus should not have pending bills.

 She regretted that the reasons why counties are getting pending bills is because some of the budgets they are preparing are not tenable and thus will never be adequately funded.

 The latest report by the Controller of Budget (CoB) Margaret Nyakang’o shows that counties owe their suppliers and contractors in excess of Sh156.3 billion.

 According to the Budget Implementation Review Report for the county government for the first half of the current financial year, Nairobi County accumulated the highest amount of pending bills in excess of Sh107 billion.

 Machakos county has Sh3 billion in pending bills, Mandera has Sh3 billion, Busia has Sh2.2 billion, Embu Sh1.9 billion, Laikipia Sh1.7 billion and Wajir Sh1.6 billion.