CAG up for NHIF financial stability

THE new report of the Controller and Auditor General (CAG) has recommended that the respective entities should comply with laws of the National Health Insurance Fund (NHIF) by making timely remittance of the statutory contributions to enable the fund have financial stability to serve its members.

The recommendation has come after the CAG audited the 2021/22 financial reporting of the NHIF.

In the audit report, the CAG has found out that there was delayed remittance of the monthly contributions to the NHIF coffers for a period ranging from one month to over a year.

“The delay in remitting statutory deductions is mainly due to insufficient funds to settle these obligations and management reluctance to observe the statutory requirements.

“Delayed contributions for a long period, limits coverage of the intended benefits to employees,” the CAG Charles Kichere noted yesterday when unveiling the report to the public.

He added: “My review found that the NHIF rejected claims amounting to 8.84bn/- out of a total claim of 92.4bn/- made by public hospitals.

Moreover, NHIF recorded a deficit for the year before tax amounting to 189.65bn/-.

Meanwhile, the CAG established that at the Medical Store Department (MSD) there was overcharging of health facilities with different prices from approved rates amounting to 1.01bn/- while, there was an increase of inventory received with shelf life less than 80 per cent or two years of the total shelf life amounting to 295.76bn/-.

On other hand, the audit of 24 Commercial Public Sector Entities found 12 entities that made profit during the year 2021/22.

Among the profitable entities, only six contributed and paid dividends to the Government, totalling 6.8bn/.

The remaining six profitable entities did not pay dividends to the Government that included four State banks which made profit, adding that they could not pay dividend due to inadequacy capital for expansion of business operations.

Two of the profitable entities (Kilimanjaro Airports Development Company and Tanzania Agriculture Development Bank) proposed dividends, but were awaiting shareholders’ approval at the Annual General Meeting.

Two other entities (State Mining Corporation and UTT- AMIS) paid lesser amounts than what were declared.

The 12 entities that reported losses during the period were unable to pay dividends. Compared to the previous year, the dividend pay-out ratio of profitable entities had decreased by 64 per cent.

“I recommend that profitable entities strike a balance between reinvesting profits for growth and rewarding shareholders through payment of dividends. The Government Commercial Banks should focus on improving their capital adequacy to ensure future profitability,” he recommended.

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