The Facilities Improvement Financing Bill, 2023
Status Timeline
Proposed
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Public Review
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Debate
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Executive
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Final
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Health Facilities to Retain All Generated Revenue
Under Section 6, all public health facilities up to level 5 will retain all monies raised or received, including user fees, charges, insurance reimbursements, and donations. These funds are legally designated as a supplement to the budgets appropriated by county governments, rather than a substitute.
Mandatory Special Purpose Bank Accounts
Section 21 requires each health facility to open and operate a special purpose bank account for its facility improvement financing.
- Hospitals: The mandatory signatories are the medical superintendent and the hospital administrator.
- Health Centers and Dispensaries: The mandatory signatories are the facility-in-charge and the sub-county accountant.
New Multi-Tiered Management and Governance Teams
The Bill establishes several oversight teams to manage health facility plans and budgets:
- County Health Management Team: Led by the County Director of Health to coordinate and oversee health policies.
- Sub-County Health Management Team: Consolidates and reviews sub-county facility budgets.
- Hospital Management Team: Prepares annual work plans, financial reports, and handles resource mobilization.
- Health Facility Management Committee: Consists of 7 to 9 members appointed by the County Executive Committee member for a 3-year term, with representation for women, youth, persons with disabilities, and marginalized groups.
Unused Funds Will Roll Over Annually
According to Section 25, the facility improvement financing accounts cannot be overdrawn. Crucially, any remaining funds at the close of a financial year do not lapse or revert to the county treasury; instead, they must be captured in the subsequent financial year's budget and rolled over.
Bill No.
Senate Bills No. 43 of 2023
Gazette No.
Supplement No. 168
Sponsor
AARON CHERUIYOT
Background
The Facilities Improvement Financing Bill, 2023 is proposed under the justification of Section 109(2)(b) of the Public Finance Management Act, 2012. This section allows county government entities to retain money raised or received to defray their own expenses if permitted by legislation. Historically, health facility revenues in various counties have been absorbed into county general revenue funds, resulting in unpredictable funding and operational delays. This Bill aims to ringfence health-generated revenues to ensure a steady funding stream, stimulate higher collection rates, and improve Universal Health Coverage (UHC) infrastructure across Kenya.
Key Amendments
- Scope of Application (Section 4 & 5): The Act applies to level 5 and lower public health facilities in Kenya. In the event of any conflict between this Act and any other law regarding public health facility financing, the provisions of this Act shall prevail.
- Retention of Monies (Section 6 & 7): All user fees, insurance reimbursements, conditional grants, and donations received by or on behalf of public health facilities must be retained by the respective facility.
- Approved Uses (Section 8): Retained finances must be used to support optimal operations, ensure the availability of urgent goods and services, facilitate primary health care at the community level, and enhance the procurement of essential products and technologies.
New Obligations
- Accountability and Budget Approvals (Section 19): Health Facility Management Committees must submit annual and quarterly facility work plans and budgets to the Chief Officer for Health for approval.
- Primary Accounting System (Section 23): An integrated financial management system must be used as the primary accounting platform for all county entities.
- Quarterly Reporting (Section 23(9)): Health facilities are obligated to file financial returns/accounts for the preceding quarter to the Chief Officer before receiving new authority to incur expenditure.
- Financial Auditing (Section 24): All facility improvement financing records are subject to mandatory audits in accordance with the Public Audit Act.
Penalties
- Compliance Penalties (Section 28): The penalties stipulated under the Public Finance Management Act (No. 12 of 2012) and the Public Procurement and Asset Disposal Act (No. 33 of 2015) shall apply directly to any misuse, misappropriation, or financial deviation committed under this Act.
Transitional Provisions
- Existing Boards and Committees (Section 27): All current members of the Hospital Management Board or Committees and Health Facility Committees will continue to operate under existing regulations until the scheduled expiry of their respective terms.
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Updates will be visible here once they are approved and applied to this bill.