Two directors have resigned from the embattled Nairobi Hospital board of management ahead of their Annual General Meeting(AGM).
The two, Lady Justice Joyce Aluoch, and surgeon Dr Eric Kahugu, resigned citing personal reasons.
The duo had just been recently appointed to the board before suddenly resigning.
Businesman Joseph Wathoa Kigwe replaced them as he is reported to have been the only person who had expressed interest in joining the board.
According to reports, the closed-door AGM, which took place on Monday, revealed details of an audit report by Ernst & Young (EY) which divulged extensive procurement irregularities and conflict of interest.
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The report noted that in the previous financial years, firms which are related to some of the board members had bid and won multi-million contracts at the hospital.
In translations which date back to 2013, the audit questioned the procurement of 16 stock items valued at Ksh130 million which were made without the facility’s CEO’s approval.
The report noted: “The manual indicates that a purchase requisition for stock items above Ksh1 million should be approved by the procurement and stores manager, chief accountant, finance controller and finance director and the CEO.”
Additionally, the report shows that six out of the 11 big projects initiated between March 2013 and October 2016 had cost overruns amounting to Ksh1.7 billion.
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“The initial total contract value for these projects amounted to Ksh3 billion but subsequent variations increased this value to Sh4.8 billion,” says the confidential report.
Some of the projects in question include, the Anderson center whose contract value was Ksh530 million but ballooned to Ksh884.9 million.
Furthermore, the auditors questioned the discharging of patients with bills amounting to Ksh28 million with no evidence of discharge agreement or security.
The troubled hospital is also noted to have paid overtime claims amounting to Ksh71.4 million without supporting documents.
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