Audit Service Uncovers Massive Rot at NHIA
The struggling National Health Insurance Authority (NHIA) has been indicted for wanton financial waste and abuse of procurement processes.
Audit work done by the Ghana Audit Service shows that the Authority may be losing close to 23 million Ghana cedis, plus over 3 million dollars, through a duplication of contract activity and unsubstantiated payments.
The Authority has also been found to have abused the single source procurement method as stipulated by law.
In four separate audit observation memos dated May 3, 2018, and signed by the leader of the audit service team at the NHIA, the audit service chastised management of the Authority for consistently failing to submit copies of their internal audit reports to the Auditor General.
It recommends immediate action on an obligation, which it says management has failed, over the years to do.
The auditors also found that management authorised the payment of GHC 400,000 to twenty members of the Health Committee of Parliament to publicise some information and educate their constituents on the health insurance scheme during the yuletide.
However, the audit found no acknowledgement of the receipt of funds, no activity budget detailing the exact work to be undertaken and no activity report after the special exercise to support the payment.
The audit concludes that the payment lacks accountability and transparency, with questions about why it was limited to only members of the select committee.
It blamed management for failing to scrutinise the request before effecting payment and recommended that the authorising and approving officers be surcharged if the transaction is not correctly or duly acquitted.
The audit team’s review of the NHIA’s procurement document also shows that the Authority obtained approval from the public procurement authority for single-sourced procurement for two different consultancy services, totalling over 11 million Ghana cedis and one other for over $3 million.
The contract which ran from 13th July 2017 to January 2018 involved Albert Ocansey and company for a forensic audit at over 2 million Ghana cedis and AKK management consulting limited for claims and clinical audit at 9 million Ghana cedis.
The third company, Taraji-EOH Health Consortium was contracted between September 2017 and March 2018 to review the NHIS operating module and overhaul the claims’ payment system to stop financial losses.
This was to be done at the cost of over $ 300 million to the Authority, but the audit found that the contract justifications as outlined in the contract document, signed and dated 7th July 2017 for single-sourced procurement were contrary to provisions of the public procurement act.
In the opinion of the Audit Service, an audit of this nature, seeking to ascertain and block fraudulent claims as purported in the contract agreement was neither economical nor consistent in providing sufficient justification to single sourced procurement methods.
A similar contract for the provision of technical and assurance service for claims and a clinical audit was awarded to Deloitte and Touche on the 29th of April, 2016.
This contract, which spanned between June 1, 2015, and November 30, 2015, was at the cost of over GHC 12 million.
The duplicate contracts were signed between July and August 2017 involving AKA Risk Management Consulting Limited, Albert Ocansey and Company and Taraji-EOH Health Consortium.
In the view of the auditors, this decision by management seems unjustifiable and is crippling the already precarious financial position of the NHIA.
The auditors also believe that this contract duplication amounts to willfully dissipating the resources of the NHIA.