Former Chief Executive Officer (CEO) of the National Health Insurance Authority (NHIA), Sylvester Mensah, has denied assertions that the Authority under his tenure made payments to waste management company, Zoomlion without following due processes.
According to him, all payments made by the Authority are authorised by the Ministry of Health, which also supervises the release of the monies to the recipients.
“All payments for MOH’s contractual obligations for which provision has been made in the NHIA budget is paid against specific request by the Minister of Health/Ministerial directive on the specific work performed and ascertained by MOH.”
“Supervision of work for such payments rests with the MOH and not NHIA. This is why the specific requests are made by the Minister for Health.”
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His comments come in the wake of notices to him and two former CEOs of the Authority, as well as the current one, ordering them and Zoomlion to refund an amount of GH?411, 433, 086 following revelations of wrongful payments made to the waste management company during their respective tenures.
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In separate letters to the four CEOs of the Authority; Sylvester Mensah, Ras Boateng, Samuel Annor and Nathaniel Otoo, the Auditor General, Daniel Domelevo stated that after an audit into the accounts of the NHIA for the period from January 2007 to April 2018, the financial infractions were noted, prompting the surcharges and ultimatum.
According to the audit, the NHIA, under the tenure of Sylvester Mensah, is said to have made a payment of GH?111,401,650 to Zoomlion without following due processes.
The payment, which was authorized by Mr Mensah and the former DCE in charge of Finance & Investment of the Authority at the time, Alex Nartey from, June 2009 to May 2015, is contrary to Regulation 39 of Financial Administration, Regulations L.I. 1802.
The two persons, along with Zoomlion were surcharged an amount of GH?202,013,257 and are to refund a total amount of GH?313,414,907.09.
However, in a Facebook post, Mr Mensah clarified that the NHIA, under his tenure or the tenure of the other CEOs, has never had any direct contractual relations with Zoomlion.
According to him, the NHIA only makes payments to the service providers when directed by the Ministry of Health.
“NHIA makes payment only when directed by MOH to settle MOH’s contractual obligation to Zoomlion, which they specify is the amount of work performed for them, for which budgetary provision had been made by Government/ Parliament.”
“All former and current CEOs work with duly issued instructions of the MoH in accordance with the law and budgetary provisions.”
Other former CEOs surcharged
The NHIA CEO from 2015 to 2017, Nathaniel Otoo, along with Mr Nartey and Zoomlion, has also been asked to refund an amount of GH?66,918,032 after the payment of GH?47,000,000 was made to Zoomlion without due procedure.
Ras Boateng, who was CEO of NHIA from 2007 to 2009 was also surcharged an amount of GH?583,000 along with Zoomlion after payments of GH?5,500,000 were made to the waste management company without recourse to due processes.
The two parties are now to refund a total amount of GH?6,083,000 into the Consolidated Fund within 14 days.
Samuel Annor, who has served as NHIA CEO since March 2017, Francis Owusu, then DCE in charge of Finance & Investment and Zoomlion were ordered to refund an amount of GH?25,017,147.21.
This is after the audit revealed that wrongful payments of GH?21,000,000 were made to the waste management company.
All surcharged parties were directed to make the payments within 14 days of receiving the notice and to produce proof of payment on a Treasury Counterfoil Receipt (TCR), to the Legal Unit of the Ghana Audit Service.
The note from the Auditor General added that if the monies are not paid before the deadline civil proceedings will be commenced to recover the amount from those surcharged.
It is however unclear when the parties involved were served the notices considering that it is dated September 2018, and that the 14-day ultimatum given to each of them should have expired already.
There was also no explanation of the nature of the contract executed by Zoomlion for which these huge sums were paid to them by the NHIA.
Below is the full statement from Sylvester Mensah
My attention has been drawn to a report in the media by the Auditor-General on some disallowances and surcharges standing in my name. I wish for the sake of clarity, to point out that the NHIA’s annual budget is designed as, and called an Allocation Formula. All expenditure items are clearly itemized with provisions made for Ministry of Health (MOH) expenditure.
By Law, MOH’s specific budget line is allowed on the NHIA Allocation Formula or budget, which is approved first by
1. NHIA Board and subsequently by
Contracts against these provisions are made between the MoH and the contractor (Zoomlion in this case). Technical supervision on these contracts logically rests with MoH. NHIA has no supervisory responsibility over MOH expenditure provision in its allocation formula.
Besides, all payments for MOH’s contractual obligations for which provision has been made in the NHIA budget is paid against specific request by the Minister of Health/Ministerial directive on the specific work performed and ascertained by MOH.
Supervision of work for such payments rests with the MOH and not NHIA. This is why the specific requests are made by the Minister for Health.
In this case the NHIA has never had any contractual relations with Zoomlion. NHIA makes payment only when directed by MOH to settle MOH’s contractual obligation to Zoomlion, which they specify is the amount of work performed for them, for which budgetary provision had been made by Government/ Parliament.
All former and current CEOs work with duly issued instructions of the MoH in accordance with the law and budgetary provisions.
The new NHIA law, Act 852 of 2012 has placed a 10% cap on how much provision can be made in the NHIA budget for expenditures determined by the MoH.
Under my stewardship the NHIA was transformed from a mutual scheme to a truly National Scheme were card bearers or subscribers could access healthcare across the country. The scheme further secured permanency by moving all headquarters and regional offices from parasitic rental premises to the Authority’s own offices to cut off rental cost into the future. Instant biometric ID cards also replaced manual ID cards which, otherwise took over six months from registration to issuance. The establishment of claims processing centres and the introduction of
Electronic Claims Management Systems also helped to inject greater efficiency in operations.
The introduction of quality assurance and clinical audit regimes as well as the consolidated premium accounts into which all subscriber premiums are deposited for greater accountability, further strengthen efficiency measures of the scheme. We also established a Call Center Regime which gave the subscriber a voice to log in their concerns and challenges for management decision-making.
The replacement of Act 650 of 2003 with Act 852 of 2012 supported the reduction of both demand-side and supply-side moral hazards.
The scheme secured international recognition with multiple international and local awards and became a hub for global knowledge sharing. The scheme continues to make further progress despite many difficulties.
The net effect of all these was the rise in active membership from about 4 million in 2008 to over 11.2 million by December 2015 and an increase in utilization from less than 11 million subscribers in 2008 to over 29 million in December 2015, among others.
Let us sustain the achievements and good international image of our scheme as we strive to further improve upon what we have attained.
Sylvester A Mensah
NDC Flagbearer Hopeful
Former Chief Executive, NHIA
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