Dr. Femi Thomas, immediate past Executive Secretary/Chief Operating Officer of the National Health Insurance Scheme (NHIS), and his successor in acting capacity, Mr. Olufemi Akingbade, have been fingered as masterminds of fraud involving billions of naira, employment racketeering and a string of other misdeeds indicative of abuse of office.
Documents exclusively obtained by SaharaReporters list their misdemeanors as "flagrant abuse of financial rules and regulations, executive rascality, embezzlement of public funds and monumental diversion of government funds".
The lid came off their duo's phenomenally shady deals, following an investigation by the Directorate of State Services (DSS), which turned over its findings to the Special Duties Department (SDD) of the Independent Corrupt Practices Commission (ICPC).
According to an interim report of the SDD (ICPC/PNC/557/2015) obtained by SaharaReporters,"monumental fraudulent activities in various guises were uncovered in the Scheme".
Dated November 15, 2015, and addressed to the ICPC Chairman, the report disclosed that the investigation into the activities of Dr. Thomas and Mr. Akingbade was based on methodically gathered intelligence.
The investigation yielded six broad allegations against the NHIS leadership headed by Dr. Thomas.
These are purchase of land at an inflated cost and receiving kickbacks, duplication of data for the 2013 and 2015 Millennium Development Goals (MDGs) projects and fraudulent payment to some states, contract splitting in the purchase of Encounter Machines, award of security equipment contract at inflated price without budgetary provision, procurement of monitoring vehicles for members of the NHIS Board in disregard for the NHIS Act as well as disregard for public service rules through skewed recruitment into the NHIS.
In the first of the allegations, Dr. Thomas was found to have sanctioned a purchase of a proposed site for the NHIS office complex at a vastly inflated sum of N900million, a cost in excess of the N500million prescribed in the 2014 budget. The land is situated at Plot 815 Utako District, Abuja. In addition to the inflated cost of purchase, the former NHIS Executive Secretary also built in agency fees of N99million, using a company, Fagel Cost and Associates, owned by one Mr. Olusegun Fayomi, as front. Dr. Thomas, the ICPC interim report stated, justified the purchase with a valuation report from the Federal Ministry of Lands, Housing and Urban Development, which put the value of the land at N1.5billion.
The justification was, however, punctured by the Federal Capital Development Authority (FCDA), which valued the property at N639million. This implies a gaping difference of N351million.
According to the report, Dr. Thomas claimed that a sum of N49million was paid to Fagel Cost and Associates. However, investigations showed that nothing was paid to the company. Also found suspicious was Dr. Thomas' claim that Mr. Fayomi represented YS Associates, owners of the land, and had a local purchase order of N200million. The report stated that the sum of N200million was transferred to Mr. Fayemi's account in the name of Cost Concept Limited, another company owned by him, the same day YS Associates received a payment of N900million from the NHIS. "This was found to be suspicious and indicative of a fraudulent transaction, which may have added credence to the petitioner's claim," the report stated. The report noted that the public service operates on strict adherence to rules and regulations and if the rules must be waived, due process must be followed. Since the budgetary provision for the property was N500million, the report states that the transaction constituted a breach of Sections 8(2), 12 and 22(4) of the NHIS Act 2000.
The former Executive Secretary and his successor, Mr. Akingbade, formerly General Manager (Information Communication Technology), were found to have sneaked non-existent Health Management Organisations into the NHIS and paid to them a whopping total of N322.7million. "Data generated from the Information Communication Technology form the bedrock with which payments are made to the Health Maintenance Organisations. As at December 2013, Bayelsa and Ekiti states Health Management Organisations were not part of the MDG payment, but were paid during the period without generated data from the supposed Contribution Management Department," the report said.
Dr. Thomas was equally found to have compromised Federal Civil Service rules through the inappropriate placement of one Miss. Ibukunoluwa Omolade Olugbade, a fresh recruit on Grade Level 10. Service rules have Grade Level 8 as entry level. But Miss Olugbade was placed two levels higher and enjoyed benefits and entitlements for Grade Level 10.
"This is in contravention of Sections 13 and 14 of the Act 2000," the report said. As Executive Secretary, Dr. Thomas pulled an audacious stunt by unilaterally annualizing his severance payment. This, noted the report, was done when he doctored the proposal submitted to the NHIS Board of Governing Council on severance allowances for the Executive Secretary and other officers on Grade Levels 14 and 15 respectively.
The allowances were proposed at 600 per cent for the Executive Secretary and 500 per cent for other officers. However, Dr. Thomas awarded and started paying himself a package of N21million per annum, an action considered a breach of Sections 16 and 19 of the Act 2000. Dr.Thomas' portfolio of fraud, the report noted, also includes the dubious payment of estacodes for eight days to some NHIS officers, who undertook a mandatory Health Insurance Tour to Rwanda.It was found that the officers, including Dr. Thomas, did not stay in Rwanda up to the number of days for which they got estacode. As a matter of fact, Dr. Thomas signed a memo in Abuja on a day he was supposed to be touring Rwanda.
Emboldened by the fact that he got away with so many infractions, Dr.Thomas sanctioned, without the approval of the NHIS Board, the payment of N1billion MDG capital payment to Health Maintenance Organisations. The NHIS Executive Secretary is required to obtain the ratification of the Board for monetary approvals beyond N2.5million.
The report concluded that the various acts of malfeasance have been carried out deliberately. "The outcome of this intelligence -led investigation of the National Health Insurance Scheme coupled with a perusal of documents from the Scheme and other confirmation letters point to deliberate infractions of sections 8 (2), 12, 13,14,16,19,22(4) of the Act 2000. It is crystal clear that infractions have been made repeatedly on the Act 2000, which would naturally justify legal actions to bring the culprits to book and prevent future occurrence. However, the team still awaits the responses from banks to follow the trail of the siphoned funds," the report concluded.
The DSS, which carried out the investigation, forwarded its findings and conclusions to Dr. Thomas, whose proxy was said to have been caught with $2.2million. In a letter dated April 4 , 2017, the DSS communicated its intention to forward the findings of the investigation to the Executive Secretary, NHIS. Signed by Ahmed Ahmed on behalf of the DSS Director-General, the letter was titled "Forwarding of Investigation Report on Maladministration and Financial Fraud at the National Health Insurance Scheme In 2015".
The investigation culminated in the indefinite suspension of the skewed staff recruitment made under Dr. Thomas, suspension of the 50 percent of Fee for Service (FFS)of N1billion paid to Health Maintenance Organisations and the extraction of a verbal commitment from Mr. Akingbade to recoup the 50 per cent already paid and recovery of three of the four NHIS vehicles taken away by former officials. It also resulted in an analysis of accounts of Board members as well as the retrieval of documents related to issues under investigation. The DSS recommended that Dr. Thomas be further investigated because a proxy of his was caught with $2.2million, a sum of money that may have originated from fraudulent schemes in the NHIS.
The former Executive Secretary and his successor, Mr. Akingbade, formerly General Manager (Information Communication Technology), were found to have sneaked non-existent Health Management Organisations into the NHIS and paid to them a whopping total of N322.7million. "Data generated from the Information Communication Technology form the bedrock with which payments are made to the Health Maintenance Organisations. As at December 2013, Bayelsa and Ekiti states Health Management Organisations were not part of the MDG payment, but were paid during the period without generated data from the supposed Contribution Management Department," the report said. Dr. Thomas was equally found to have compromised Federal Civil Service rules through the inappropriate placement of one Miss. Ibukunoluwa Omolade Olugbade, a fresh recruit on Grade Level 10. Service rules have Grade Level 8 as entry level. But Miss Olugbade was placed two levels higher and enjoyed benefits and entitlements for Grade Level 10.
The allowances were proposed at 600 per cent for the Executive Secretary and 500 per cent for other officers.
However, Dr. Thomas awarded and started paying himself a package of N21million per annum, an action considered a breach of Sections 16 and 19 of the Act 2000.
Dr.Thomas' portfolio of fraud, the report noted, also includes the dubious payment of estacodes for eight days to some NHIS officers, who undertook a mandatory Health Insurance Tour to Rwanda.It was found that the officers, including Dr. Thomas, did not stay in Rwanda up to the number of days for which they got estacode. As a matter of fact, Dr. Thomas signed a memo in Abuja on a day he was supposed to be touring Rwanda.
The report concluded that the various acts of malfeasance have been carried out deliberately. "The outcome of this intelligence-led investigation of the National Health Insurance Scheme coupled with perusal of documents from the Scheme and other confirmation letters point to deliberate infractions of sections 8 (2), 12, 13,14,16,19,22(4) of the Act 2000. It is crystal clear that infractions have been made repeatedly on the Act 2000, which would naturally justify legal actions to bring the culprits to book and prevent future occurrence. However, the team still awaits the responses from banks to follow the trail of the siphoned funds," the report concluded.
The DSS, which carried out the investigation, forwarded its findings and conclusions to Dr. Thomas, whose proxy was said to have been caught with $2.2million. In a letter dated 4 April , 2017, the DSS communicated its intention to forward the findings of the investigation to the Executive Secretary, NHIS. Signed by Ahmed Ahmed on behalf of the DSS Director-General, the letter was titled "Forwarding of Investigation Report on Maladministration and Financial Fraud at the National Health Insurance Scheme In 2015".