Revenue collection at Nakuru Level Five Hospital has come under scrutiny after a resident filed a case seeking a public audit of its financial records over alleged mismanagement and embezzlement.
The hospital is the largest referral facility in the South Rift region. It serves patients from Nakuru and at least six neighboring counties and hosts key medical units, including a cancer center and the 250-bed Margaret Kenyatta Mother and Baby maternity wing.
The hospital which generates over Sh900 million annually, has been the leading revenue source for Nakuru County, contributing a significant share of the nearly Sh3 billion collected from health facilities in the past six years.
In a case filed in a Nakuru court, Margaret Njeri has sued Chief Officer of Health Services, Medical Superintendent James Waweru and National Bank Limited Nakuru Branch Manager demanding an audit of the hospital’s accounts.
Through her lawyer Kevin Ngware, Ms Njeri is seeking orders compelling the hospital management to produce complete financial records for public scrutiny.
At the heart of the case are claims that the hospital operates illegal bank accounts at National Bank, allegedly used to siphon funds.
According to court documents, the chief officer, medical superintendent and bank manager are signatories to these accounts in violation of public finance laws.
“The chief officer, the hospital medical superintendent and the bank have opened and operate the hospital accounts in an unconstitutional manner and breach of statutes preventing public funds from misuse. The three have been colluding to siphon and misuse public funds meant for the hospital,” says Ms Njeri in court papers.
“I am requesting the court to prohibit the bank manager from acting or executing any mandate as a signatory of accounts associated with the Nakuru Level Five,” she further states.
The petitioner further requests the court to bar the bank manager from handling any transactions related to the hospital, arguing that he is not a public servant and should not have control over public funds.
“The funds collected are meant to enhance the hospital’s infrastructure, but they may be ending in individuals' pockets. I seek to understand how the three managed to open and operate the said accounts without oversight, adhering to public procurement policy, and setting accounting standards of a government-run institution,” she adds.
“Revenue in other counties is collected via mobile payments and a till number, to ensure there is no leakage. The funds in Nakuru should be deposited in a government collective pool, where all monies collected as revenue by the county are remitted,” she further says.
The petitioner questions how the accounts were opened and operated without oversight, adherence to public procurement laws, or proper accounting standards.
She notes that other counties collect hospital revenue via mobile payment platforms to minimize leakage, suggesting that Nakuru should follow suit and remit all funds to a central county revenue pool.
She also accuses hospital management of abuse of office, citing unexplained interdepartmental fund transfers, irregular expenditures and a lack of a clear procurement plan.
Justice Hedwig Ong’udi certified the matter as urgent and directed all parties to file responses by March 3, 2025. The matter will be mentioned on March 11.
The case comes months after a 2022/2023 Auditor General’s report revealed that 16 health facilities in Nakuru collected Sh1.5 billion, which was not deposited into the County Revenue Fund but spent directly by hospitals or transferred to other departments.
Additionally, the audit noted that interest income of Sh27.5 million on deposits was not remitted to the County Revenue Fund, violating Section 109(2) of the Public Finance Management Act, 2012, which mandates that all county revenue be deposited in a central fund managed by the County Treasury.
