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Drug Revolving Fund (DRF) is a system whereby the revenue generated from the sale of drugs to patients is used to purchase new drugs and ensure availability, effective and efficient system. DRF is also seen as a cost-recovery or “user fee” system to ensure that drugs are made available and affordable in public health care facilities.  Its scheme focus is to ensure the sustainability and continuity of the essential drugs program.


Historical Perspective

The concept of DRF was introduced through the Bamako Initiative to be one of the ways of solving the challenges and difficulties in having available medicines. Nigeria has been one of the most active supporters of Bamako Initiative, viewing the initiative as a strategic opportunity to support local councils in promoting health care delivery at the grass root.

The DRF mechanism within Bamako initiative was adopted as the initial approach for sustainable financing of drug supply at the local level. The initiative also emphasized the use of essential drug list and general prescribing. It was adopted in 1988 with financial and technical support from donor and support agencies like the World Health Organization (WHO), United Nations Children’s Fund, and the United Kingdom Departments for International Development (DFID).


Why Drugs Management?

Drugs need to be managed properly for the following three reasons:

  • Drugs are part of the link between the patient and health services; hence their availability or absence will contribute to the positive or negative impact on health.
  • Drugs are no longer the responsibility of health workers only. Political, economic, financial and traditional considerations have become so crucial in health care that it has become imperative to look at drugs and health care from these perspectives.
  • Proper drug management may also be a source of revenue.



 Drug Management Cycle

Drug management functions are undertaken in four principal phases which are interlinked and are reinforced by appropriate management support systems (i.e. tools).




              Fig I: Drug Management Cycle


From drug selection to drug use, passing through procurement, storage and distribution, a whole range of management capacities are required and necessitate using the appropriate tools within a given legal and policy framework. The Selection of drugs for use at health centres is determined at the national level by the Ministry of Health. After quantification, based on price, delivery conditions and quality, the selected drugs go through a procurement process. After storage and distribution, the use of the drugs requires prescribing, packaging, dispensing and counseling.




How DRF Scheme Works?

DRF Scheme starts with one-time capital investment (seed money), provided by the government, donor agencies or interested communities which is used to purchase an original stock of essential and commonly used medicines to be dispensed at prices sufficient to replace the stock of medicines and ensure a continuous supply. Medicine financing can be in different forms which include:

  • Managed care (National Health Insurance Scheme)
  • Free drugs policy
  • Cost sharing
  • and DRF (user fee)

The medicinal store located at the Local Government Area (LGA) headquarters is usually stocked with the initial seed stock. The Health Centre store make requisition to the medical store in an approved manner, from the Health Centre store, supplies are sent to the dispensary store, and from the dispensary store drugs are sent to the dispensary and finally to the patient. The money so realized is placed in a bank account from where money is withdrawn to make fresh procurement. The cycle continues and expenses for each cycle equals receipts.

Note: In some health centres located in communities where there are no banks a safe is installed in the dispensary.


A-Z Requirements for Setting-up a DRF

A DRF requires a number of factors to enable its setting up and these include:

  1. Political will from government and implementers.
  2. A DRF management committee should be set up - the ward health committee can play this role. Someone representing the Local Government (LG) health committee can also be included in the proposed DRF committee.
  3. It is needful for a pharmacist to be included in the committee who will serve as the secretary.
  4. There should be adequate staffing with relevant and competent operators.
  5. The functions of the operators should be cleanly delineated i.e. the DRF committee, medical store staff and facility staff.
  6. Relevant technical staff should be involved in procurement of drugs in-line with Edo State public procurement law, National drug policy, National health policy, and other pertinent regulations e.g. PHC drug code. Technical staff should carry out drug selection, quantification and tender management.
  7. Efficient inventory control with the support tools.
  8. DRF bank account: There should be a dedicated account for DRF financial operations.
  9. In communities where there is no bank a safe should be installed in the dispensary.
  10. A warehouse and other things necessary for proper warehousing; this will serve as the medical store and should be located at the LGA headquarters.
  11. There should be a Health Centre store, Dispensary unit with a store, and a Delivery van
  12. Monthly account report to management or DRF committee is a necessity
  13. Insurance cover: There should be adequate insurance to cover losses to stock in transit as well as facility dispensary store. It may be necessary to also provide persons in custody of drug stocks fidelity insurance cover.
  14. A Supervision/inspection team
  15. A rational prescribing and correct drug dispensing (emphasis on EDL and generics)
  16. Accounting records: The operators at all levels should use the DRF manual on financial management and accounting system. Accounting records should be properly and promptly updated.
  17. Internal and external audit: This is very vital as a check mechanism. External audit should be a must at the medical store level while at the facility level the internal auditor is used who should report to the head of the health centre.
  18. Incentive payment: DRF operations increase the overall work load of the operators. They should be paid a form of incentive to ensure the success of the scheme. Every DRF staff is expected to be paid his/her basic salary as incentive.
  19. Requisition system must be pull to avoid the expiring of drugs and other health commodities.
  20. Cash and carry: All sales of drugs should be on cash and carry basis. No credit sales
  21. Staff Drug Consumption: Staff should pay for their drugs and be reimbursed by the LGA.
  22. Training: Opportunities for the training of operators of the DRF should be provided regularly to enhance the quantity and quality of services rendered.
  23. Management Information System (MIS): The appropriate indicator forms developed for the purpose of monitoring the DRF should be used as required. The information derived from the exercise should be appropriately disseminated and used to improve the system.
  24. Pilferage/Theft: Acceptable loss due to pilferage should not exceed 2% while loss due to breakages and stock expiry should not exceed 3%.
  25. Pricing: Retail pricing at the facility level should consider purchase price, transportation charges and markup to cover administrative and other costs.
  26. Emergency patients: A clear policy on payments by emergency patients should be put in place. The use of emergency packs may be a way forward.


Costing of Drugs in the DRF Framework

This is determined at the national level. The factors to consider in determining price include purchase price, shipping cost, clearing and custom charges, transportation charges and markup to cover administrative and other costs. In determining the price, a factor is also included to take care of inflation so that the revenue generated will not be eroded with time; this is important for the sustainability of the drug fund. It is also important not to price drugs at the health centre below the national determined price. At the local level, the health committee may add another makeup to cover local expenses.


Steps and Procedures in Drug Revolving Fund

  1. Selection of Drugs in DRF Scheme

Ministry of Health normally determines the types of drugs and dosage forms that are selected for use in a country for all levels of health care: primary, secondary and tertiary. The Criteria for Selection of drugs includes:

  • Keeping costs of drugs and dosage forms affordable and cost-effective so as to optimize the use of financial resources.
  • Having drugs available for the treatment of the most prevalent diseases, ailments, sicknesses at the levels of care provided.
  • Availability of safe, effective and good quality drugs.


Drugs are selected using WHO essential drugs list as a model. However, Nigeria governments have their own Essential Drug Lists (EDLs) which used the WHO model as a template. The EDLs is based on National Health Policies such as the free health care policy, the subsidized health care policy and, on National Drug Policies such as free drug policy, subsidized cost of drugs or cost recovery and Cost sharing. Others consideration include patterns and prevalence of diseases, Quality and type of care provided (Primary, Secondary, Tertiary) and available human resources


The International Nonproprietary Names (INNs), also known as generic names, are normally used in identifying selected drugs. However, the choice of drugs by generic names requires the existence of an effective Drug Regulatory Authority (NAFDAC) to ensure the availability of good-quality, safe, effective and affordable drugs.

Primary Health Centres, which is the main focus of this document, usually have ten to thirty drugs from the national essential drugs lists. This small number of drugs makes procurement, storage and distribution easy.



  1. Procurement of Drug Requirements

Procurement is made up of drug quantification and tender management and it is based on selected drugs, dosage forms and available financial resources. The following procedures are adopted in procuring drugs:

  • Estimating quantity of each drug product required for a given period,
  • Finding out the prices of the different drug dosage forms required
  • Allocating funds for each drug dosage form depending on:
  • Priority nature of drug and dosage form,
  • Available finances

Note: Requisition for drug and dosage forms ought to be made after due consultation with prescribers.


  1. Estimation of Drug Requirements

The estimate of the drug and dosage forms required for a given period is undertaken to avoid shortages (out of stock), ensure credible health care service,  prevent excess stock and avoid waste (loss or mismanagement of financial resources). The following factors influences choice and quantity of drugs:

  • Population which the health institution serves;
  • Disease pattern;
  • Seasonal variation in disease pattern;
  • Monthly (rate of) drug consumption;
  • Knowledge of quantity of each dosage form that is regularly consumed’
  • Delivery (lead) time;
  • Time lag between placing orders and receiving the orders;
  • Request indicator (re-order level);
  • Quantity of drug product that serves as a signal for re-ordering.


The maximum quantity of drugs held in stock is determined by distance from the central health services area or regional medical story, size of the health centre store and number of clients (patients) visiting the health centre. The following three factors are usually considered as the basis for calculating the appropriate quantity of a particular drug to be ordered.

  1. Delivery (Lead) time

It is the estimated time between ordering drugs and receiving the drugs. It is also the time when new stock is ordered and when it is received and available for use.

Delivery time may be days, weeks or even months; it may be longer than two months because of the following reasons:

  • Poor road conditions, particularly in the rainy season
  • Poor condition of delivery vehicles
  • Increased work load at the issuing store
  • Non-availability of adequate resources at the central store
  • Consumption rate of drugs


  1. Monthly Consumption

Monthly consumption may be collated with data obtained from the Bin (stock) cards, Daily use record, daily cash record, Drug register (See appendix). The normal monthly consumption is obtained by:

  • Calculating the average consumption over a period of time (e.g. six months)
  • Or dividing the total consumption over the period by the number of months the drug dosage form was consumed.
  1. Request Indicator (re-order)

The Request Indicator (RI) is the level of drugs in stock; it indicates when fresh orders should be made. It is the quantity that is calculated to last between the period of placing the order and the delivery of the new consignment.

The RI is marked with pencil in the space “RI” on the top right-hand corner of the stock card. It should be updated at least twice a year because consumption may vary due to seasonal changes or epidemics. This will ensure that no shortage of stock errors before the next consignment is expected. The stock should not be allowed to fall below this level before a new order is placed. Each stock card must have an RI that is updated from time to time as consumption varies.

The stock should never reach “zero level” before a request is made, as there will be a shortage of stock for some time. It is easy to calculate the RI once the monthly consumption is obtained.


  1. Determining the Quantity of Drug to be Requested

In determining the quantity to be requested for, some factors need to be put into consideration:

  1. Consider the lead or delivery time.
  2. the number of patients to be treated (using national treatment guidelines)
  3. Collaborate with the head of the health centre (prescriber) when making a new request. The prescriber is better placed to know for which item an extra quantity has to be requested because of epidemics or seasonal changes in disease pattern.
  4. Look through all the stock cards in a systematic manner and compare the RI with the current stock balances.
  5. Request only those items where the stock balance approaches the RI, equals the RI or is below the RI.
  6. If the item is being requested for the first time, the stock now in inventory will be zero.
  7. Stock now in inventory Si is the quantity of an item available for dispensing or distribution, including safety stock.
  8. Safety stock is the reserve stock of an item needed to prevent stockouts due to unforeseen events like late receipt of orders or to an increase in use of the item.


  1. Requisition, Supply and Receipts of Drugs in a DRF Scheme

Drugs that are ordered for use in the health centre must be approved in the centre. These drugs should be relevant to the pattern of endemic diseases as well as the type of services being provided in the HC. It is advisable and important to request drugs on a regular basis, as drugs will only be delivered when requested; this will also help prevent shortages and avoid patients losing confidence in the health centre. The delivery time should be taken into consideration in ensuring that drugs are not in short supply.


  1. Supply of drugs from medical stores: Stores requisition/delivery (issue) form

A stores requisition/delivery (issue) form should accompany any supply made from the medical stores. Health Centre normally receives their drug supplies from central, regional or health, services area medical stores. In very rare cases they may obtain drugs from other sources. The following points should be noted:

  1. Supplies are issued on the basis of request made to the medical store by the health centre on an approved stores requisition/delivery (issue) form.
  2. The request should not be excessive and should preferably ask for quantities that can be used in between delivery times.
  3. The quantity of drugs requested is made in the appropriate column of the form and sent to the medical store from which drugs are supplied.
  4. The request is made on the basis of approved delivery time, time frame or in emergency.
  5. The quantities of drugs delivered or issued from the medical stores should be entered in the appropriate column of the form.
  6. The records of requisition and receipt of drugs from the medical store are kept in the health centre in an approved manner.
  7. The delivery note from the central medical store should indicate what has been supplied as indicated in the stores requisition/delivery (issue) form.



  1. Receipt of drugs at dispensary

In receipt of drug at the dispensary, the following should be noted:

  1. The consignment must come with two copies of the stores requisition/delivery (issue) form
  2. Check that the quantity issued actually corresponds to the quantity indicated on the stores requisition/delivery (issue) form.
  3. Check off each drug after checking.
  4. Take note of the unit price of each drug and compare it to the previous unit price.
  5. Check that all original boxes, tins or bottles are unopened and are in good condition.
  6. Check the labels and ensure that there are no expired drugs being received.
  7. Any drugs already expired or soon to expire that cannot be consumed before expiration or drugs not in good condition should be returned for destruction or redistribution to other Centre.
  8. Sign two copies of the stores requisition/delivery (issue) forms if the above procedures have been completed.
  9. Return one copy of the signed stores requisition/delivery issue form to the medical stores and place another copy in the “drug order” file.
  10. Place drugs with shorter expiration dates in front of the shelf so that they can be reached and used first.
  11. Remember to record the new stock on the respective stock (bin) cards and appropriate forms.


  1. Dealing With Discrepancies in Receiving Drugs

Where there is a difference in the quantities of drugs issued and the quantities actually received, the delivery team should be to give an immediate explanation and make the necessary correction on the stores requisition/delivery (issue) form. If there are broken bottles or leaking packages, hand those over to the delivery team along with an internal drug return (IDR) form.

Discrepancies should always be recorded in the remarks column on the stores requisition/delivery (issue) form (diagram 2).


  1. Dealing with “Expiry Before Use” (Dexp)

It is possible to calculate the quantity of a product likely to pass the expiry date before use. This calculation helps in determining drugs that cannot be used in the HC before the expiry date. These drugs should be returned to the medical store using the IDR form. It also helps determine if stock-outs could occur, caused by the loss of stock due to expiry.

The following formula is used to calculate Dexp:

Dexp= (Si- (No. of months until expiry date x CA)


Si= stock now in inventory (also called current stock)

CA= Average monthly consumption


  1. Completing Stores Requisition/Delivery (Issue) Form

This form is usually filled when the HC dispensary is ordering items from the medical or central store. It is advisable to make a request on a standard stores requisition/delivery (issue) form see Diagram 2. This form should be produced in four copies. The original and two other copies of the form will be sent to the central store when completed. The fourth copy is kept in the dispensary to remind the health worker in charge of drugs of items requested.

In filling the forms, one must ensure that the following items are filled in correctly.

  1. Name of drug and dosage form;
  2. Unit of issue and quantity requested;
  3. The requisition number (it is preferable to begin with a new number each year, e.g.)
  4. The name of the dispensary and the date the requisition was made;
  5. The name and signature of the health worker making the requisition;
  6. Where the stores requisition, delivery (issue) form is designed to contain all the items listed, fill in only the quantities of those items needed.
  7. Write down the approximate unit price of each requested item and the appropriate total cost of each item;
  8. Name and signature of the health worker making the requisition;
  9. The head of the health centre and a representative of the health committee should endorse the stores requisition/delivery (issue) form.


  1. Transfer Voucher or Internal Drug Return (IDR) Form

The transfer voucher effects the movement of the following items to the medical store:

  • Expiring drugs
  • Damaged or spoiled drugs
  • Drug soon to expire
  • Excess stock resulting from wrong RI or low consumption.

An internal transfer directly from one dispensary to another without including the central store should not be done because this will create confusion in accounting. The following rules should be kept in mind:

  1. It is important that drugs are not allowed to expire in the health Centre because of changes in disease pattern or for any other reasons.
  2. Items that can be used elsewhere should be transferred immediately using an IDR form to the medical stores for subsequent redistribution (Diagram 3)
  3. Expired or spoiled items should be transferred immediately using the IDR form to the medical stores for destruction.
  4. Excess stock should normally be transferred at least 3 months before expiration to the medical store using the IDR form.
  5. An internal transfer directly from one dispensary to another without involving the central store is not permitted for accounting purposes.
  6. The IDR form should be filled in triplicate. The triplicate copy is retained in the health centre while the original and duplicate copies accompany the returned days.















                                                Fig 2: A IDR flow


  1. Procedure for supply drugs to health care wards and outpatient clinics

Where the Health Centre has lying in-wards and outpatient clinics to which drugs are supplied, the Health Centre store will supply the drugs in accordance with the following:

  • A request is made from the ward/clinic in an approved manner.
  • Supplies are made on the basis of the request, and quantities of drugs supplied are recorded in an approved manner.
  • Entries of quantities of drugs supplied are made on bin cards as well as the drug register maintained (in the store) for drugs received and supplied.

Normally, drugs are supplied from the Health Centre (dispensary) store to the dispensing area. Entries of such drug quantities are also made on bin cards or the drug register maintained in the store in an approved manner.


  1. Drug Distribution

At the Health Centre level, drug distribution concerns mainly dispensing drugs to patients. This requires an understanding of the patients (who may not speak or understand the language of the dispenser) and practical skills in dispensing and record keeping. The other aspect of distribution of drugs at the Health Centre is the return of overstocked and nearly expired drugs to the medical store. Drug distribution also includes movement of drugs from medical store to Health Centre store.

The Push/Pull Systems

The pull system is the recommended option in a drug revolving fund scheme. It is a distributive system where the Primary Health Care center makes a requisition to the medical store, the advantage is that the Health Centre gets the drug they need and this leads to reduce expiration of drugs. The push system on the other hand is when the medical store supplies whatever drugs they wish to the PHC; the disadvantage of this system is that it brings about increased expiration of drugs at the Health Centre.


  1. Storage of Drugs, Stock Management and Drug Use


Drugs must be stored in a specially designed secure area or space of a building for the following reasons:

  • Avoid contamination or deterioration,
  • Avoid disfiguration of labels,
  • Maintain integrity of packaging and so guarantee quality and potency of drugs during shelf life,
  • Prevent or reduce pilferage, theft or losses,
  • Prevent infestation of pests and vermin.

A drug storage environment should have an adequate temperature, a sufficient lighting, clean conditions, humidity control, cold storage facilities, and an adequate shelving to ensure integrity of the stored drugs.

14.1           Arrangement of drugs on shelves

The following guidelines should be duly followed in the arrangement of drugs:

  • Shelves should be made of steel or treated wood.
  • Shelves should be strong and robust.
  • Drugs are arranged in alphabetical order of generic names.
  • Each dosage form of drug is arranged in separate and distinct areas.
  • Sufficient empty space should demarcate one drug or dosage form from another.

Most recently received drugs are placed behind old stock on the shelf except where new drugs have shorter expiration dates. To have access to drugs with shorter expiration dates first, put these in front of the shelves. Those with longer expiration dates should be placed behind those with shorter dates.

14.2           The storeroom

A well-arranged store enables easy identification of drugs and saves time when picking a drug from the shelves. The following procedure will facilitate managing the drugs in the store:

  • Put drugs on the shelves in alphabetical order corresponding to the essential drug list. This helps remove drugs quickly and makes for easy inventory control.
  • The rule of FIRST IN FIRST OUT (FIFO) should be applied always. So, drugs that were received first should be used first, except where the new stock has shorter expiration dates than the old stock. In this regard, the principle of FIRST TO EXPIRE FIRST OUT (FEFO) should apply.

14.3           The Dispensary

Good arrangement facilitates dispensing work. Hence, the following must be done to have well-arranged dispensary:

  • Retain a daily drug use record in the dispensary.
  • Provide a table for dispensing drugs.
  • To facilitate work, do not overcrowd the dispensing table.
  • Arrange documents in an orderly manner on the table, away from the dispensing area.
  • Clean after each use tablet counters and place within easy reach on the table.
  • Avoid dispensing wrong drugs by arranging drugs on the table in alphabetical order so that the drug being dispensed is not confused with another.
  • Always close drug containers from which drugs are not being dispensed to prevent spillage or dispensing the wrong drug.


  1. Drug Stock Management Support Tools

Record-keeping is an important part of drug management. Mistakes on records should be neatly crossed out and signed for but not obliterated. The following stock management records (See appendix for examples) should be completed in the order described in the following sections.

15.1           The Bin Card

  • They are important for good accountability of stock movement.
  • The cards should be made of stiff cardboard and be placed near the drug products that they refer to on the shelves.
  • If one dosage form is available in two different strengths, open separate stock cards for each strength
  • Enter quantity of seed stock in the “in” and “balance” columns with date, unit price and supplier.
  • Enter quantity of any new stock in the “in” column with date, unit price, supplier and delivery number.
  • Enter balance of stock brought forward in “balance” column with date.
  • Entries of receipt and issue of drugs are made after the event.
  • Always have a balance of stock entered in the “balance” column with date.
  • Always issue out full containers of drugs from the store and enter the quantity of drug issued in the “out” column.
  • Physically check the actual balance of stock against current balance in stock card from time to time to detect any discrepancy.
  • Maintain a stock (bin) card for each drug or dosage form of a drug in the store where drugs are kept.
  • Other names for bin cards are tally card, stock cards e.t.c.


15.2           Entries to be made in stock (bin) card

  • When an item is received, from the central store, enter the quantity received in the “IN” column on the stock card using a red pen.
  • Add the number to the previous balance on the stock card to obtain the current balance.
  • Enter the unit price
  • Enter the date and number of the delivery note of the central store in the column “Ref. No”.
  • It is preferable to take a full container of a drug from the shelf in the store to the dispensing area when the stock in the dispensing area is finished or almost finished.
  • Each time a full container of a drug is taken from the shelf to the dispensing area, an empty of the number of containers taken out is made in the stock (bin) card using a blue or black pen in the “out” column.
  • Subtract the number of containers taken out from the previous balance in the stock card to obtain the current balance.


  1. Consumption records at the dispensary level

The record on consumption of drugs used in the dispensary is called the daily use record book and its uses are to:

  • Make entries of all drugs dispensed on a daily basis.
  • Maintain a daily use record in the daily use record book in the format shown in diagram 8
  • Use a fresh page for making entries for each drug dosage form.
  • Reserve a page or two for every month’s consumption of drugs.
  • Make entries from actual receipts issued.
  • When a drug item is taken out of the dispensary store, an entry is made in the “OUT” column in the stock (bin) card in the store. An entry is also made in the “IN” column, with red pin, in the daily use record in the dispensing area as well as the date the entry was made.
  • Add the quantity of drugs taken from the store to the dispensary to the previous balance in the daily use record to obtain current balance.
  • Enter the dispensing date and the total quantity of dosage form dispensed daily in the “OUT” column.
  • Subtract the quantity dispensed or used daily from the balance to obtain current balance.
  • Enter any shortage in the “OUT” column and necessary remarks in the “REMARKS” column


  1. Dealing with Discrepancies

Discrepancies should always be recorded in the “REMARKS” column as in (Diagram 8). Discrepancies may arise for one of the following reasons:

  • Some of the tablets may have crushed into powder or broken.
  • A shortage may result from a mistake by the manufacturer.
  • A shortage may occur in the containers when tablets issues are not recorded in the daily use record sheet,
  • Arithmetic errors may result in shortages or excess stock.

If there is nothing remaining in the container and entries were made of all drugs dispensed in the daily use record book, then it could be concluded that the shortage came from the manufacturer during packaging. Keep all available evidence and report to the medical store as soon as possible. The medical store may receive similar reports from other health centres and can then estimate the average shortage per container for that particular drug item and credit your account.

This irregularity may also be reported by the medical store to the suppliers for compensation, where possible. This exercise can only be accurately done with proper documentation in the daily use record book.

  1. Daily use/cash record

The daily use/cash record has to be filled on a daily basis and in particular when payments are made for dispensed drugs. The following data could be transferred from the duplicate copies of the receipt book to the daily use/cash record sheet (Diagram 10) when the last patient (client) for the day has been served:

  • Date,
  • Name of patient,
  • Receipt number,
  • Quantity of each drug dispensed,
  • Money collected from the patient.


Draw a line under the last entry for the day in your daily use/cash record sheet using a red pen. The quantity of drugs is expressed as number of tablets (for tablets) or volume in ml. (for liquids) dispensed. Add up the quantities of each drug dispensed and cash collected to give the details of daily transactions.

  1. Financial Record Book

The total daily cash from the column “CASH RECEIVED” of a daily use/cash record should be transferred to the financial record book (FRB) and the new balance calculated in the FRB as shown in Diagram 11.

  1. Custody of cash

Commercial banks usually do not have branches in most villages where Health Centre are located. It is, therefore, important to adopt convenient methods for securing all cash and always having money available for the replenishment of drugs.

The following procedures can be helpful in the handling of cash:

  1. A locally-made durable safe cash should be provided and buried in the floor in such a way that it cannot easily be located by other people. This safe should be used in such a way that once money has been deposited, it can only be taken out in the presence of a member of the health committee or supervisory team who has one of the keys.
  2. Purchase money orders with cash collected. Address such money orders to the medical store, if possible, and keep in the safe for making payment to the medical store during the next supply.
  3. Take money along for making payments for supplies whenever a trip is made to the medical store.
  4. The delivery team could collect cash for supplies made to the Health Centre when delivering supplies.
  5. Only person from the central store team should collect money from the Health Centre
  6. Any amount that is not paid out (balance) is carried forward and used to pay during the next visit to the medical store.
  7. A receipt, such as that in Diagram 12, could be used to document the collection and payment of cash in the FRB.


  1. Current Capital Situation Card (CCSC)

The current capital situation card (CCSC) is an important source of financial information for the dispensary, supervisory team and members of the health committee. It should be possible to give, at any time, a report on the finances of the dispensary using the CCS card. This means that all financial transactions in the health centre dispensary are documented.

This document is used to follow up the value of stock and cash in the dispensary at any time. When a drug consignment is received, the cash value of stock at the dispensary increases. When an internal drug return is made, it reduces the dispensary’s value of stock. At any time, the value of stock/cash should be equivalent to the figure on the CCSC.

The following transactions are recorded on the CCSC as shown in Diagram 13:

  1. When drugs are received, their total value is entered in the column “SUPPLY” and this is added to the previous balance.
  2. Cash paid to the medical store should be entered in the column “CASH PAID” and subtracted from the previous balance.
  3. All internal drug returns should also be expressed in cash and entered in the column “IDR” with a red pen and subtracted from the previous balance. Note “IDR” under “REMARKS” (Diagram 13).
  4. Any price revision is entered in the column “SUPPLY” and added to or subtracted from the previous balance depending on whether the revision has resulted in an increase or decrease in the value of stock. Note “Price Revision” under “REMARKS” (Diagram 13).
  5. Whenever there is an inventory-taking exercise, enter the value of stock taking in the column “BALANCE”. The balance represents the amount of cash in hand and the drugs not dispensed (in stock) reflected as cash.


  1. Monthly Return form

The monthly return form is used at the end of each month to collect data for the medical store. This data will help the medical store to assess monthly consumption in the health centre and determine the future purchases at the health centre. This financial progress of the dispensary in relation to attendance at the health centre can also be assessed with the data. The information on the monthly return form (Diagram 14) is:

  • Cash collected for the month (as in the FRB),
  • Total number of patients that attended the health centre. Information provided by the head of the health centre,
  • Quantities of each drug dispensed for the month (refer to daily use record or the daily use/cash record sheet.


  1. Inventory form

The inventory form (Diagram 15) is used at the end of each financial year or at any time it becomes necessary to undertake an inventory exercise in the dispensary. Both shortages and excesses can be found in the exercise. In either situation, a thorough investigation needs to be done (e.g. reviewing all additions and subtractions in the inventory sheets). It is advisable to carry out an inventory exercise at six-monthly intervals (or even quarterly) in order to identify any problems early enough rather than waiting for the end of the year.

A representative of both the medical store and the health committee should participate in the inventory exercise. The following activities should be carried out during the inventory:

  1. Any cash in hand should be counted first and included in the inventory figures.
  2. Any supply made before the inventory must be counted with the other items.
  3. Count all drugs in the store and dispensing area and record the numbers. Use a tablet counter to prevent contamination.
  4. Do not open full tins and packages to count the contents.
  5. Verify all full tins and packages to make sure that their contents are intact.
  6. Calculate the total value of stock by adding the values of all items. Compare this number with the current balance in the CCSC. The two should correspond if there has been efficient management of stock and cash during the period being audited.
  7. These figures will be used by an external auditor to prepare a balance sheet for the dispensary.
  8. The health worker should pay for any deficits established at the end of the audit.
  9. Profits declared in the audit report should be put back into the health system.


  1. Storage of documents

For easy reference, documents should be numbered and put into different files. Various colours of files may be used for easy reference. The following documents should be put into different files:

  • Daily use/cash record,
  • Financial documents (e.g. IDR),
  • Requisition/delivery form,
  • General correspondence,
  • Miscellaneous.

Keep all used documents (e.g. receipt booklets, FRB, stock cards, CCSC) in safe custody for at least five years before they are thrown away.

  1. Use of drugs rationally

The rational use of drugs requires that the drug is prescribed for a particular patient after proper diagnosis of a health problem. Prescriptions should promote the rational use of drugs. Rational use of drugs requires that a particular patient with a specific health problem receives drugs according to the following:

  • Appropriate doses
  • Appropriate dosage form;
  • Appropriate route of administration;
  • Appropriate frequency of administration
  • Appropriate duration of treatment;
  • Appropriate information to the patient;
  • Adequate follow up


  1. Supervision/Inspection

Two teams should be involved in conducting inspection of the dispensary. The first is the team from the appropriate authority. A pharmacist should be a member of this team. The second team is represented by some members of the health committee. The health committee has to meet on a regular basis with the head of the health centre to plan activities for the health centre and dispensary and prepare strategies for the implementation of planned activities.

The duties of the appropriate authority are as follows:

  1. Ensure that drugs are properly arranged on shelves in the dispensary.
  2. Check that security measures are in place.
  3. Collect a few names with dates at random from receipt books, cross-check with the health centre consultation register and verify if those patients were actually consulted before coming to the dispensary.
  4. Recalculate at random the figures in the Financial Record Book (FRB) to ensure that they are correct.
  5. In consultation with the health committee, make payments following laid down criteria.
  6. Decide with the health committee who will be responsible for deficits and surpluses.
  7. Make advance payment of salary to the health committee who will later pay the health worker on a monthly basis.
  8. Pay incentives where approved.
  9. Recommend to the health committee further work to be done in the dispensary.
  10. Give on-the-job training so that records are always kept up-to-date.
  11. Establish a report on-the-spot on observations and leave a copy in the health centre.
  12. Confirms the availability of all approved drugs on the list.

The role of the health committee for proper functioning of the dispensary is stated as follows:

  1. Go through previous inspection reports made by the appropriate authority and note any action to be taken.
  2. Check the general cleanliness of the dispensary.
  3. Compare monthly turnover at the dispensary in relation to the number of patients that were seen at the health centre.
  4. Confirm the availability of all approved drugs on the list in the dispensary.
  5. Provide adequate furniture for the centre.
  6. Procure shelves for the drugs.
  7. Use an appropriate method to select a candidate to work in the dispensary.
  8. Follow up training of selected candidates at the medical store.
  9. Engage the trained candidate on contract.
  10. Inspect financial documents and detect any deficits early enough.
  11. Check that all administrative records in the dispensary are up-to-date.
  12. Ensure maintenance, cleanliness and proper-set up of the dispensary.
  13. Participate in handing over the dispensary in case of any absence.
  14. Sensitize the population on the advantages of the use of the dispensary.
  15. Assist in receiving drugs for the health centre, when necessary.
  16. Assist in all inventory taking.
  17. Employ a watchman for the dispensary and health centre.


Chabot J. The Bamako initiative. Lancet. 1988 Dec 10;2(8624):1366–1367.

UNICEF (1988).The Bamako Initiative. New York: UNICEF. (MimeographE/ICEF/1988/I/L40)





Generic (INN)

Brand Names

Sulfhaloxine + pyritmethamine




Acetyl Salicylic acid






Request no: _________________      Institution: __________________________

Name of health worker: __________  Date: _____________________________

Delivery note: ________________    Total number of package:_____________

Packaged by (name):___________     Date:_____________________________

Checked by (name):____________    Date:_____________________________

Handed over by (name):_________    Date:_____________________________

Received by (name):___________     Date:_____________________________

                                                                                                            For Official Use Only


Item description

Unit of Issue

Unit  Price

Quantity required

Total Price

Quantity delivered

Total price




Acetylsalicylic acid 500mg tab

1,000 tab









Magnesium trisilicate

100 tab









Chloroquine 100mgg

1,000 tab









ORS sachets

50 sachets









Drocaine Penicillin vial

1 vial









To be completed in four copies

  • Period For which supply is required from___________ to_____________
  • The dispenser should comment on excess or short supply in the remarks column

Name and signature of dispenser at health centre:__________________________

Name and signature of member of health committee:_______________________

Name and signature of head of health centre:_____________________________


Item description

Unit of Issue

Expiry Date


Unit Price



Normal saline







Aspirin 500mg

1,000 tab





Soon to expire

Bipenicillin 1mu

1 vial






Mebendazole 100mg

1,000 tab






Chloroquine 100mg

1,000 tab





Over quantity

ANC Card







Povidone Iodine

100 vial





Not supplied






Delivered by:_______________________    Received by:_________________

For medical stores use only voucher no:______________ 2 copies returned to central store_______________



Ako Dispensary                     Stock Card No. 1                                           R1 89 X 1,000

ITEM: Paracetamol   Dosage 500mg            Unit of Issue 1,000 tablets

Date (2014)

Ref. No.



In    Out


Unit Price













From central store








To central store





Exp   8/14




To dispensary store








To dispensary store








To dispensary store








To dispensary store








To dispensary store








To dispensary store








Stock taking







Where RI represents the pre-order level or request indicator, the lowest stock level before an order is placed for the next stock.





Acetylsalicyclic acid tablets 3,000mg

Date (1997)



Balance (Tabs)















From dispensary store






To patients






To patients






To patients






To patients






To patients






To patients






To patients






To patients






To patients






To patients






To patients






To patients










Crumbled tablets


From store






To patients






















From store






To patients






Monthly consumption for June 1997




Two tins used for the month




Receipt for Drugs

                                                                                                                        No. 00012




Name of Drug

Qty. Sold

Unit Price
















Daily Use Cash                                   Item                 Daily Cash received    Signature



Date Patient’s Name Rec. No.



Cash Collected

Cash paid out



























*Paid to CMS
































                                                Cash in hand= 103,090

Audited on 23/7/00 by________________________________________

Chairman of________________________________________ health committee.


Turnover (From______ to______)

Paid to central store_______________________________________________


Name/Signature of payer__________________________________________

Name/Signature of receiver________________________________________




                                                                                                                        Card No. 1

Name of Dispensary: Gazawa 





Balance Paid







1st Supply
























Price revision


















Stock Taking
















Dispensary:_________________________   Month and Year:________________

Monthly turnover(in local currency):______________________ (Refer to FRB)

Health centre attendance for month:___________________________________


Items sold during the month                        Quantity

Acetylsalicyclic acid                                      500mg tab

Acetyl salicyclic acid                                      250mg tab

Benzyl benzoate                                              25% lotion

Chloroquine                                                    100mg tablet

Diethyl carbamazine                                       100mg tablet

Folic acid                                                        5mg tablet

Name of health worker:_______________________________________________

Signature of health worker:____________________________________________





Place:_________________________                        Date:________________________



Unit Price

Total Cost

Acetylsalicyclic acid 500mg tablet




Cotrimoxazole 400/800 mg tablet




Benzyl benzoate 25% lotion B/100 ml




Chloroquine 150mg tablet




Mebendazole 100mg tablet




Folic acid 5mg tablet









Cash in hand:

Total capital:________________________________________________________

Amount on CCSC:___________________________________________________

Deficit/surplus amount:_______________________________________________

Name/Signature of health worker:_______________________________________

Name/Signature of head of centre:_______________________________________

Name/Signature of health committee representative:_________________________

Name/Signature of person taking over Dispensary, where applicable:___________


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  • Prof. Agatha Eguavoen /Chairman/

    Professor Agatha Nonyem Taiwo Eguavoen attended the University of Ibadan where she obtained her First, Second and Third degrees in Sociology with specialization in Criminology and Gender studies.
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    Professor Friday Okonofua is the pioneer Vice-Chancellor of the University of Medical Sciences in Ondo State of Nigeria. He graduated MB ChB from the Obafemi Awolowo University, Ile-Ife in 1978 and has PhD (Public Health) from the Karolinska University in Sweden.
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    Professor (Mrs.) Bridget Ogheneakpobo Ogonor has B.Sc. (Sociology) University of Lagos in 1978. In 1983. 1990 and 1997, she bagged the following degrees; PGDE, M.Ed (Educational Administration) and Ph.D (Educational Administration) respectively from the University of Benin.
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    Professor Cyril Obiajulu MOKWENYE is a Professor Francophone Caribbean and African Literatures at the University of Benin, Nigeria. He was educated at the University of Ibadan, Nigeria, and the University of Bordeaux, in France.
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