Developing a County Facilities Improvement Fund Bill in Five Counties - AMREF Health Africa in Kenya

Devolution of health services granted county governments the role of coordinating and managing the delivery of county healthcare services. Pre-devolution, hospitals were financed through four main sources: budget allocations from the national government; user fee revenues from users of hospital services; reimbursement from the National Hospital Insurance Fund (NHIF) and donations from non-governmental organizations and other charitable donors.

Pre-devolution, hospitals would provide quarterly budgets to the Ministry of Health to receive the authority to incur expenditure (AIE). Their budget utilised all revenue raised from all sources available to them. In addition, hospitals operated their own bank accounts where hospital staff and representatives from the district treasury were signatories, allowing them access and use of available funds.

Post-devolution and following the enactment of the Public Finance Management (PFM) Act 2012, hospitals are required to deposit revenue raised via user fees and donor support, to the CRF account. To incur expenditure, county health facilities are required to request the county government to conduct all their procurement of goods and services and make payments for all expenditures.

This reduced autonomy has resulted in:

  • delays in the procurement of essential supplies;
  • reduced direct donor support to health facilities;
  • reduced funding available to county health facilities despite remitting revenues to the CRF further complicating their operations.

To circumvent these challenges, some of the hospitals have subverted the law by illegally spending user fees at source.

The provision in the PFM Act for a legislation to exempt county facilities from the mandatory deposit to the CRF has enabled West Pokot County to enact Kenya’s first Facilities Improvement Fund (FIF) Act, 2019. It is expected that the FIF Act will restore the financial autonomy of health facilities in the county.

Amref successfully spearheaded the process to enact the FIF Act in West Pokot County. It now seeks to initially support five counties to develop a customised County FIF Bill including: Tharaka Nithi, Taita Taveta, Samburu, Turkana and Bungoma.  

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