County hospitals brace for new tool

Mbagathi County Hospital, Nairobi. The adoption of the new template will promote efficiency due to seamless transfer of funds from counties. [Courtesy]

County hospitals have until the end of this week to submit comments for a new financial reporting template seeking to boost accountability.

A notice by the Public Sector Accounting Standards Board (PSASB) asking 300 level 4 and 11 level 5 hospitals across the country to give their input expires this weekend.

The template is aimed at improving transparency whereby assets and liabilities will be part of the hospitals’ financial statements.

This is aimed at ensuring that their financial reports are done separately from those of county government executives as is currently the case.

PSASB Chief Executive Fredrick Riaga said the hospitals spend revenues collected at source before channelling them to the County Revenue Fund after seeking approval as is required by law. He said this presents a challenge in effective recording and reporting of the finances.

“This necessitates reporting in line with the Public Finance Management Act that requires that at the end of each financial year, an accounting officer for a county government to prepare financial statements in respect of the entity in the formats to be prescribed by the PSASB,” said Riaga.

“It further states that an accounting officer shall prepare the financial statements in a form that complies with the relevant accounting standards prescribed and published by the board from time to time.”

He said adoption of the new template will promote efficiency due to seamless transfer of funds from counties, besides also facilitating their audit by the Office of the Auditor General.

The reports are expected to provide a good tool for the public to assess the performance of the hospitals.

Under the current arrangement, county hospitals operate as departments under the Ministry of Health within their respective governments.

The financial operations of these hospitals are reported within the county executive financial statements.