In Summary
  • The contract it signed was for offering a payment solution to NHIF at a fee of between four and 4.5 percent of collections.
  • The Directorate of Public Prosecutions is convinced NHIF opted for the more expensive leasing arrangement to perpetrate and camouflage fraud.

When the National Hospital Insurance Fund (NHIF) floated a tender for a revenue management system, many hoped that the leakages that had plagued the insurer’s ability to deliver seamless services to members would be sealed.

Internal documents however show that that was the beginning of what appears to have been a scheme to siphon off more than Sh1 billion from the health insurer, as the system that was advertised for was not delivered despite seven bidders being led on to the end of a dud procurement process by the NHIF management.

The management, led by then Chief Executive Officer Simeon Kirgotty, wanted to bring on Web Tribe Limited, which trades as JamboPay, to offer payment services to NHIF without going through a competitive process.

So after Web Tribe Limited was eventually picked to instal an internally managed system, which would have cost between Sh400 million and Sh600 million, the contract it signed was for offering a payment solution to NHIF at a fee of between four and 4.5 percent of collections.

FRAUD

Between then and August this year, when NHIF eventually bought its own stand-alone system to which JamboPay would offer only technical support as expected of any vendor, up to Sh1 billion had been lost.

That money would have supported maternal healthcare across the country and taken thousands of children suffering from terminal illnesses like cancer overseas for specialised treatment.

A report submitted to the NHIF Board last week showed an elaborate bait-and-switch scheme through which JamboPay received the money at the expense of more than six million contributors.

The documents indicate that JamboPay has received Sh864 million as commissions for payments made through banks alone.

The Directorate of Public Prosecutions is convinced NHIF opted for the more expensive leasing arrangement to perpetrate and camouflage fraud.

The current CEO Geoffrey Mwangi and his Finance Director Wilbert Kurgat have since been taken to court over the withholding of documents related to the transaction and are out on bond. They have also been suspended from their positions.

PAYMENT

NHIF’s ICT department wrote to then CEO Simeon ole Kirgotty on January 31, 2014 asking for the acquisition of a system that could allow the insurer to manage contributions from its members through various platforms.

Two weeks later, the Fund advertised a tender for the provision of an integrated revenue collection system.

While 20 firms bought tender documents, only seven had applied by the February 21, 2014 deadline. Web Tribe, through its JamboPay platform, emerged the best bidder.

The contract that NHIF offered JamboPay, however, was not a purchase agreement as expected.

Instead, the firm was offered a contract for the provision of integrated revenue collection services. As per the 2014 contract, JamboPay first received a Sh49.5 million one-off payment from NHIF.

The IT firm was also to receive four percent of all bank, mobile money and agency contributions collected through its integrated system.

It was also to get a 4.5 percent commission on electronic card payments over a three-year period.

COMMISSIONS

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