Facilities Improvement Financing Act

Section 1. Short Title Section This Act may be cited as the Facilities Improvement Financing Act, 2023.

Section 2. Interpretation Section In this Act- “chief officer” means the chief officer responsible for health in a respective county; “county executive committee member” means the member of the, county executive committee responsible for health matters in a respective county; "county health facility” includes county and sub-county hospitals, health centers, dispensaries and any other health entity registered to provide health services; "director of medical services" means the county director of medical services appointed by the respective county public service board; “dispensary” means a health facility at level 2; “entity” means a county health facility declared to be a county government entity under section 5(1) of the Public Finance Management Act (Cap. 412A); “exemptions” means exemptions as defined in national policies; “expenditure committee” means a committee constituted by the chief officer for health for the purposes of receiving, interrogating and approving the plans and budgets from county and sub-county hospitals, health centers and dispensaries; “facilities improvement financing” means revenue collected, retained, planned for and used by public health facilities and un...

Section 3. Objects and purposes of this Act Section provide for an efficient, secure and accountable mechanism for the collection, retention and management of revenue derived from health services rendered at public health facilities in Kenya;

Section 4. Application of this Act Section This Act shall apply from level 1 to level 5 public health facilities .

Section 5. Retention ofpublic health facilitiesimprovement financing Section 5(1) There shall be retention of all monies raised or received by or on behalf of all public health facilities . Section 5(2) There shall be opened a facility improvement financing account for each public health facility into which shall be paid all monies received by or on behalf of the respective public health facility. Section 5(3) Non-financial receivables and donations may be retained in whole or be re-donated to another public facility upon full disclosure as provided for in the relevant laws. Section 5(4) The income and other receivables retained by the public health facilities shall be considered as a supplement to the budgets and resources appropriated to the public health facilities by the respective county government and not a substitute.

Section 6. Sources of thepublic health facilitiesimprovement financing Section own source revenues that include monies received as user fees, charges and monies paid as reimbursement for services received from insurance firms or other relevant entities;

Section 7. Uses of the finances retained bypublic health facilities Section support the respective public health facilities ’ optimal operations for effective service delivery throughout the financial year;

Section 8. Role of the National Government Section developing policy guidelines, including on revenue management and governance to promote transparency and prudent use;

Section 9. Role of the County Governments Section facilitating effective collection and retention of facility improvement financing revenue by the public health facility in accordance with this Act;

Section 10. Establishment of County Health Management Team Section 10(1) There is established a County Health Management Team in each county. Section 10(2)(a) the county director of health, who shall be the chairperson; Section 10(2)(b) the administrative officer of the department, who shall be the secretary to the team; Section 10(2)(c) all section or unit heads within the health department; and Section 10(2)(d) the medical superintendents of the county hospitals.

Section 11. Functions of County Health Management Team Section co-ordinating and overseeing the interpretation and implementation of county health laws and national health policies, including maintenance of standards on quality, performance, co-ordination and regulation, and control of all health and private sectors in their areas of jurisdiction;

Section 12. Establishment of the Sub-County Health Management Team Section 12(1) There is established a Sub-County Health Management Team for each sub-county in a county. Section 12(2)(a) the health officer in charge of the sub-county; Section 12(2)(b) the sub-county administrative officer; Section 12(2)(c) all Unit heads within the sub-county department; Section 12(2)(d) the medical superintendent of the sub-county hospitals; and Section 12(2)(e) any other officer as the county executive committee member may, in consultation with the County Health Management Team, designate.

Section 13. Functions of the Sub-County Health Management Team Section support health facility management teams in preparing annual and quarterly operational plans, including their respective budgets and procurement plans;

Section 14. TheHospital Management Team Section the medical superintendent;

Section 15. Functions of theHospital Management Team Section prepare and present the annual hospital work plan and budget;

Section 16. Establishment of the Health Facility Management Team Section 16(1) There shall be established a Health Facility Management Team which shall comprise of the health facility in-charge and all the section or unit heads. Section 16(2) The Health Facility Management Team shall oversee the overall management of the health facility with collaboration from the Health Facility Management Committee.

Section 17. Composition of the health facility management committee Section 17(1)(a) the in-charge of the health facility, who shall be ex officio and the Secretary to the Committee; Section 17(1)(b) the Sub-county Medical Officer of Health or their representative; Section 17(1)(c) a village representative; Section 17(1)(d) one person, who is a resident of the area, nominated by a joint forum of women’s organizations in the area; Section 17(1)(e) one person, who is a resident of the area, nominated by a joint forum of youth organizations in the area; Section 17(1)(f) one person, who is a resident of the area, nominated by a joint forum of faith-based organizations; and Section 17(1)(g) two people representing the interest of the vulnerable and marginalized communities, one of whom shall be a person with disability. Section 17(2) The Chairperson of the Committee shall be elected from amongst the members of the Committee. Section 17(3)(a) at least one third of the total membership of the Committee shall be from the opposite gender; Section 17(3)(b) the membership includes persons from marginalized communities; and Section 17(3)(c) the interests of diverse groups in the catchment area...

Section 18. Role of the Health Facility Management committee Section consider and submit for approval to the chief officer the annual facility work plan and budget;

Section 19. Term and conditions of appointment Section 19(1) The appointments of the members to the Board and Committee in this Part shall be in such a manner that the respective expiry of their terms shall fall at different dates. Section 19(2) The members referred to in subsection (1) shall be appointed for a term of three years and shall be eligible for reappointment for one further term of three years.

Section 20. Bank account for the Facility Improvement Financing Section 20(1) There shall be opened and operated a bank account for every entity into which all monies received by and on behalf of the entities for the facility improvement financing shall be paid into. Section 20(2) With respect to a hospital , the mandatory signatories to the bank accounts shall be the medical superintendent and the hospital administrator. Section 20(3) With respect to a health center and dispensary , the mandatory signatory to the bank account shall be the facility in-Charge and sub-county accountant.

Section 21. Authority to Incur Expenditure Section 21(1) The chief officer shall be the accounting officer. Section 21(2) The hospital medical superintendent and facility in-charge shall receive authority to incur expenditure from the chief officer .

Section 22. Expenditure of the facility improvement financing Section 22(1) Upon issuance of authority to incur expenditure to the medical superintendent or facility in charge, the user department shall raise vouchers for payment for services or procurement of commodities. Section 22(2) The vouchers shall be verified by the respective hospital accountant, or the accountant responsible for the health center , whichever is applicable. Section 22(3) The vouchers shall be presented to the County Department for Health Accountant for confirmation that the items requested are in the vote book and thereafter approved. Section 22(4) The voucher shall revert to the medical superintendent or facility in charge for initiation of payment. Section 22(5) An integrated financial management system shall be used as the primary accounting platform for the county entities. Section 22(6) All county entities shall not expend any finances without express authority to incur expenditures. Section 22(7) The chief officer for the county treasury in consultation with the chief officer may appoint accountants for health centers and dispensaries for purposes of proper financial accounting and record keeping. Se...

Section 23. Annual reporting Section submit the facility’s financial statements to the Auditor-General in accordance with the Public Audit Act (No. 34 of 2015); and

Section 24. Audit Section The facility improvement financing shall be subjected to audits in accordance with the Public Audit Act ( No. 34 of 2015 ).

Section 25. Overdraft and continuity Section 25(1) The accounting officer shall ensure that the facility improvement financing accounts are not overdrawn. Section 25(2) The facility improvement financing shall not lapse with the turn of a new financial year, but any residue of finances shall be captured in the following financial year budget and annual plans and rolled over.

Section 26. Winding up of improvement Financing Section In circumstances when a health facility is closed and the improvement financing is to be wound up, the balances shall be swept to the County Revenue Fund and a certificate sent to the accounting, officer for the department of health.

Section 27. Transitional provisions Section All members of the current Hospital Management Board or Committees and Health Facility Committees shall continue to operate as per existing regulations up to the expiry of their respective terms.

Section 28. Penalties Section The penalties stipulated in the Public Finance Management Act ( No. 12 of 2012 ) and the Public Procurement and Asset Disposal Act ( No. 33 of 2015 ) and other written laws on misuse, misappropriation and other deviations shall apply.

Section 29. County legislation Section A county government may enact legislation to give further effect to the provisions of this Act in the respective county.