The Auditor General Nancy Gathungu has raised a red flag over the alarming number of county hospitals that have failed to submit their financial statements.

This negligence, she warns, is a direct violation of the Public Finance Management Act and poses a significant threat to financial transparency and accountability.

Out of the 372 Level Four and Level Five hospitals, only 209 facilities provided their 2023/2024 financial records for audit.

This means that nearly half of these crucial healthcare institutions have failed to comply with the legal requirement to submit their financial statements.

Gathugu expressed her disappointment at the lack of financial reporting, stating that it hinders the annual operational planning process.

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"A total of 193 or 54 per cent of Level Four hospitals have not submitted their financial statements for the financial year 2021/2022, while 163 or 46 per cent have not submitted their statements for 2022/2023," she revealed.

The failure to submit financial statements has far-reaching consequences. Gathugu explained that it increases the workload and scope of audits, negatively affecting the resources planned for the year and subsequently the timelines for submission of audit reports.

Furthermore, Gathugu highlighted that many county hospitals are not adequately funded despite remitting their collections to the county governments, leading to compromised service delivery.

She urged counties to stop blaming late exchequer releases for the accumulation of pending bills and emphasized the need for a balance between exchequer releases and pending bills.

"If the pending bills are more than the exchequer release, there is fiscal indiscipline," she stated.

The Controller of Budget's report reveals that counties owe their suppliers and contractors a staggering Sh156.3 billion. Nairobi County has the highest amount of pending bills at over Sh107 billion, followed by Machakos, Mandera, Busia, Embu, Laikipia, and Wajir.

The failure of county hospitals to submit their financial statements and the mounting pending bills raise serious questions about the financial management practices of county governments.

Urgent action is needed to address these issues and ensure transparency and accountability in the healthcare sector.