Fresh Crisis rocks NHIS; Governing Council rejects budget, accuses management of ‘padding’

Anxiety is growing at the National Health Insurance Scheme (NHIS) following the rejection of the 2018 budget of the agency by its Governing Council over alleged improprieties.

The scheme’s Governing Council is empowered by law to review and approve the budget of the NHIS.

The budget was delayed by the protracted crisis at the agency that got to a climax last year when the Minister of Health, Isaac Adewole, sent the Executive Secretary, Usman Yusuf, on indefinite suspension over allegations of misconduct and corruption.

Days after, the minister suspended eight other senior officials of the agency.

Thereafter, Mr Adewole asked a panel to investigate the allegations against Mr Yusuf and the other officials. Although documents in possession of PREMIUM TIMES revealed that the panel indicted him and recommended sanction, President Muhammadu Buhari reinstated the executive secretary seven months later.

Since his reinstatement February this year, the agency has been engulfed in infighting as Mr Yusuf and some senior officials traded accusations of fraud.

Worried by the effects the long delay in having a budget in place was having on the operations of the agency, the governing council which came into office early this year, called a series of meetings over the budget.

At an emergency meeting on July 24, the fifth over the budget proposal presented by the management, the council finally directed the management to present an amended version reflecting its deliberations to the council chairman, Enyattu Ifenne, for final approval.

But when on August 6, the management presented the amended budget reflecting a N65 billion expenditure plan to the council chairman, Mrs Ifenne pulled back from giving approval.

In a memo dated August 20 to the executive secretary, she pointed out six major anomalies which she noted would make it “illegal and improper” for her to sign the budget as presented.

Mrs Ifenne directed the management to rework the budget to correct the anomalies. But the management is yet to carry out the directive, causing fears that the stalemate may further affect the operations of the crisis-ridden health agency.

The anomalies Mrs Ifenne observed include suspicious duplication of expenditure items totalling about N265 million, gross deficit budget without justification of source/mechanism for funding, and failure to reflect in the budget N64 billion appropriated by the federal government.

Other infractions cited by the chairman are inflation of amounts approved by council for manpower development, ambiguous or improper items observed in the budget, and non-transparent budget format.

As regards duplication of items, Mrs Ifenne listed four expenditure items captured in the amended budget.

These are maintenance of equipment (N28 million), payment of vehicle insurance (N30.5 million), overhead cost for zonal and state offices (N21 million), and overhead cost for Head Office (N185.4 million).

“It appears the authors attempted to conceal the duplications by altering the description of the expenditure items. This “padding” of the budget exposes the Scheme to the risk of losing about N264, 900,000.00,” she noted.

On budget deficit, the council chairperson noted:

“You may recall that through four intense budget review meetings, council reduced the budget deficit from 66% to 48.89% and finally to 30.6% by rationalizing costs and, to the extent possible, exerting fiscal discipline in the agency.

“As it stands, the current budget submission proposes revenue/income of N44,919,911,789.97 and expenditure for the same period is N64,725,325,088.44, creating a budget deficit of N19,805,413,298.47; an unacceptably high deficit of 30.6%.

“We are concerned that contrary to standard practice, the budget summary fails to address how and when the deficit would be financed. This exposes the Scheme to the risk of financial mismanagement. If the document is signed in current state, it could be misconstrued as a conspiracy to defraud the Scheme.”

On failure by the management to reflect appropriation by government in the amended budget, Mrs Ifenne noted:

“While the budget summary indicates a sum of N64 million allocated to the Scheme by the Federal Government in the 2018 appropriation Act, remarkably, this sum is not reflected in the revenue projections for the period. This anomaly cannot be justified under any circumstance and also exposes the Scheme to the risk of funds not being properly accounted for.”

Although the non-reflected federal allocation was mentioned in quote as N64 million, other detailed NHIS documents show the sum as N64 billion, indicating an error was made in the quote.

The council also decried the four-fold “inflation” of the amount it approved for manpower development and directed that seven training programmes for which the management allocated N1,010,361,089 should be stepped down from the budget.