Kenya’s Ministry of Health announces that, under the Facilities Improvement Financing Act 2023, public health facilities can retain revenues locally rather than remit them to County Revenue Funds.
According to the Principal Secretary for Public Health and Professional Standards, Mary Muthoni, the retention of revenues will allow reinvestment by public health facilities.
Reinvestment will improve efficiency, reduce delays, and strengthen service delivery according to the PS.
“Under the Facilities Improvement Financing Act, 2023, public health facilities no longer surrender their revenue to County Revenue Funds,” PS Mary Muthoni stated.
FIF Act, 2023
The FIF Act 2023 was assented to on October 19, 2023, and enforced on November 2 of the same year, before being published in the Kenya Gazette.
Under the Act, facilities covered include the community health units, dispensaries, health centers, sub-county hospitals, and county referral hospitals that are in Level 1 to Level 5.
The Act does not cover national referral hospitals at Level 6, and section 3 of the Act on the retention and management of revenue does not apply to such facilities.
Revenue Retention
Section 5 of the Act allows for the retention of all monies raised and received in all public health facilities.
All public health facilities are, however, required to have a Facility Improvement Financing (FIF) account in which all earned funds are kept.
Money not spent by the end of a financial year is retained in the account rather than forwarded to the county treasury.
Furthermore, the retained funds are used to supplement the country’s normal budget and improve service provision.
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Sources for Funds in Healthcare Facilities
Section 6 of the Act requires that the funding for health facilities come from permitted sources and that any funding requiring disclosure be disclosed when necessary.
- The hospital’s revenue from user fees and insurance reimbursements
- County government allocation of the equitable share.
- Conditional grants.
- Donations and gifts that should be disclosed.
Funds in the FIF accounts can be used for day-to-day operational delivery and for emergency procurement of medical supplies, as outlined in Section 7 of the Act.
However, the use of the funds must comply with approved budgets, public procurement rules, and the Public Finance Management Act.
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Management and Governance
To ensure that the facility’s financial autonomy is exercised in accordance with the law, the Act establishes a governance structure at various levels.
Oversight at the county level will be carried out by the County Executive Committee Member for Health and the Chief Officer for Health. At the same time, facility management boards will prepare and approve spending.
Committees are expected to have community representatives and maintain the representation of marginalized groups and gender equality.
Further, the Act requires that all financial transactions be recorded and audited, and that annual reports be provided.
