The Senate County Public Accounts Committee has firmly directed the County Executive of Nyeri to comply with the law and retain all funds collected from health facilities to help health services to residents.
The Nyeri governor Mutahi Kahiga, appearing before the Moses Kajwang’ led committee learned that that the county has failed to retain the funds at the facilities where they are collected.
According to the the Facility Improvement Financing (FIF) Act 2023 in Kenya empowers public health facilities (Levels 1–5) with financial autonomy to retain, manage, and spend revenue generated from user fees and insurance, preventing its diversion by county treasuries.
The office the auditor general in its reports revealed that from Level 4 and level 5 health facilities seven health facilities collected a total of Sh. 722 million towards the health facilities improvement which was transferred to Nyeri County Health Services Funds.
According to the OAG, the Fund reimbursement a total of Sh. 572 million to the health facilities resulted in a deficit of Sh. 150 million noting that this was contrary to Section 5 of the Facilities Improvement Financing Act, 2023 which requires that all funds received as revenue by or on behalf of all public health facilities be retained in the Hospital Facilities Improvement Financing Account.
The OAG told the senators, “The County was in breach of the law in the county audit report for the 2024/25 financial year.”
OAG added, “In addition, the failure to reimburse the total amount transferred by the facilities negatively impacted on service delivery by the health facilities.”
Governor Mutahi Kahiga in his defense told senators that health is an exclusively devolved functions and thus the national law touching on matters health is not binding.
The former Council of Governors vice-chairperson cited that the Facilities Improvement Financing Act, the Governor said Section 29 allows the county to enact a legislation to give further effect to the provisions of the Act.
“It is this context that Nyeri County Government decided to continue using its already established Nyeri Health Services Fund Act, 2021 and its regulations which was enacted by the County Assembly and implemented in 2021,” said the Governor.
Mutahi responded that the difference of Sh150 million is a result of the Nyeri County Health Services Fund Revenue Model which states that 3 percent will be set aside for fund administration in which the remaining amounts is retained at a rate of 80 percent by the collecting facility and 20 percent to be shared equitably by all primary health facilities.
The sessional chairperson and the committees vice chairperson led the senators in rejecting the governor’s explanation saying it violated the principles of the constitution and therefore, the county was in breach of the law.
A season advocate and the Nyamira Senator Okongo Omogeni argued that since the Facilities Improvement Financing Act is a national law, its provisions supersede county legislation and maintained the county was in breach of the law.
Omogeni quoted Article 191 of the constitution, insisting that Mutahi must comply with the law as the Facilities applies uniformly across the country.
Article 191 governs conflict of laws between national and county governments, ensuring that national legislation prevails if it applies uniformly, prevents unreasonable county action, or is necessary for national security, planning, or standards.
Kahiga was left with no choice only to acknowledge the force of the law, pleading with the Senate to intervene and save counties from being emasculated by the State arguing that jurisprudence governing laws where there is conflict on exclusive functions is not well developed.
“Yes, it is a national law but I also know that I am talking to Senators whose mandate is to defend and protect counties and their governments, change the law because we are being emasculated,” said the Governor Kahiga.
“You are safer complying with the law as it is and Kenya is a unitary state with devolved functions.” Omogeni said.
The Executive acknowledges challenges in revenue collection and reporting but attributes them to ongoing reforms aimed at strengthening internal controls and sealing loopholes.
Kahiga indicated that that measures have been implemented to improve revenue automation to enhance oversight, and ensure that all collections are accurately captured and promptly remitted to the County Revenue Fund.
