The National Police Service (NPS) has renewed the multibillion-shilling medical cover for police officers even as questions emerged about the failure to pay Sh833.63 million to a contractor for its own hospital that would have offered cheaper medical services.
Awarded to APA and Joint Venture, the one-year contract runs from April 1, 2025 to March 31, 2026, according to a memo dated April 11, 2025 from Mr Apeles Chacha on behalf of the Nairobi regional police to all sectional heads.
The Sh1.23 billion NPS hospital at Mbagathi, Nairobi, which is complete and fully equipped, cannot be handed over to the police unless NPS clears the balance for which only Sh400 million was paid.
“You are required to inform officers that NPS has renewed the medical insurance contract with APA and joint venture with effect from April 1, 2025 to March 31, 2026,” the memo reads.
The memo was sent to all sub-county police Nairobi and the officers commanding law courts and depots.
The Mbagathi Hospital, a level 4 facility which continues to stay idle, was meant to save the government the ignominy of misuse of public funds through procurement of expensive private medical insurance schemes.
The 150-bed capacity hospital was designed to provide critical and specialised medical healthcare services to NPS officers and their families to improve the welfare and well-being of the officers.
Although the renewed contract amount is not indicated in the memo, Mr Chacha explains that “the benefit cover provided under this renewed contract remains the same”.
This is an indication that the amount is the same as the Sh8.7 billion the government paid the defunct National Hospital Insurance Fund (NHIF) as a premium to provide cover for the officers for a year – January 1, 2023 to December 31, 2023.
“To ensure accurate record keeping, officers are encouraged to update the list of their beneficiaries before April 30, 2025. Kindly inform all officers under your commands,” Mr Chacha says in the memo.
However, the requirement by the NPS that the principal members update their list of the beneficiaries before April 30, 2025 could be an indication that the children they sire after the update may not be eligible for the cover.
Equally, the officers who get married after this date may also not have their spouses covered.
Auditor-General Nancy Gathungu’s report on the accounts of NPS for the 2023/24 financial year, shows that the construction and equipping of the hospital, which was done under the supervision of the Kenya Defence Forces (KDF), was completed in the 2022/23 financial year.
“Value for money spent on the project has not been realised,” the Auditor-General’s report reads.
In the previous meetings with the NPS, KDF has been adamant that it will not handover the hospital to the NPS until the Sh833.63 million has been paid.
The Auditor-General has already flagged irregularities in the administration of the Sh8.7 billion medical insurance contract that was awarded to the NHIF during the 2023 period.
The 2023 contract would later be extended for a further three months to March 31, 2024 at an additional premium of Sh2.2 billion, increasing the cover for the police during the period to Sh10.9 billion.
Also questioned by Ms Gathungu is the litany of abuse of public funds at the NPS involving the Sh6.3 billion insurance cover for the provision of Group Life Cover, Work Injury Benefits (Wiba) and Group Personal Accident Cover (GPA).
Of the premium amount, Sh5.1 billion covered the officers from January 1, 2023 to December 31, 2023. The contract was later extended for three months to March 31, 2024 at a premium of Sh1.3 billion.
“However, review of insurance records revealed anomalies,” the audit says, an indication that the principal members and their beneficiaries may have gotten a raw deal.
Notably, Ms Gathungu says, a review of insurance records revealed irregularities that include unpaid claims relating to Group Life benefits, injury GPA and Wiba claims.
This is despite the contract providing that where a member is out of work as a result of an injury or illness, “such members shall be entitled to compensation for loss of gross salary up to a maximum period of two years”.
This is though subject to the prevailing Human Resource (HR) policy at the time of injury or illness.
The audit shows that a review on insurance records revealed that as at the time of the audit, the insurer had not settled 262 unpaid GPA claims despite having been notified.
Clause 2.3.1 of the contract provides that upon the death of a member, the member’s declared next of kin shall be paid a lump sum compensation equivalent to five years annual basic salary.
“As at the time of the audit, the insurer had not paid 21 claims worth Sh43.5 million in respect of group life sum assured,” the audit states adding, “this was contrary to the contract terms, which state that claims shall be paid within five days after notification and provision of all documents.”
The contract also provides that temporary disablement shall be compensated through a periodical payment equivalent to the member’s salary.
“Periodical payments shall be made for as long as the temporary disablement continues but not for a period that exceeds 12 months,” the contract reads.
But according to the Auditor-General, a review on insurance records revealed that as at the time of the audit, the insurer had not settled 509 Wiba claims and two Wiba deaths.
This is against the contract provisions, which state that death or total disablement under Wiba or as a result of occupational accident shall be compensated at a rate of 8 years gross salary of the beneficiary.
