NHIF extend loan to UDOM without proper documentation
Dar es Salaam. National Health Insurance Fund (NHIF) advanced a loan of Sh44.29 billion to the University of Dodoma (UDOM) to construct a Medical Centre without a written documents, the Controller and Auditor General (CAG) has found out.
It was established in an audit for the year which ended June 2015/16 that there were neither written agreement between the two institutions nor a Government guarantee for the said loan.
“Contract between the lender and borrower could set rights and obligations of each party to the agreement and other arrangements of interests and repayments,” says CAG in a report published recently.
According to CAG, in the absence of a written agreement and or Government Guarantee, NHIF can sustain loss of its funds in case UDOM fails to honour its obligation to repay the loan as the unwritten arrangement may not be enforceable in a Court of Law.
CAG advised the NHIF management to ensure that a written agreement is entered into with the borrower and/or obtain a government guarantee.
“In future, NHIF is also urged to ensure that binding written agreement is entered into prior to disbursement of any loan,” says the report.
