The Social Health Authority (SHA) spent close to KSh 92 million in legal fees to recover just KSh 13.9 million, a glaring imbalance now at the heart of a parliamentary investigation into the state insurer’s financial dealings.
MPs reviewing the Auditor-General’s report noted that SHA’s total legal expenditure shot up to KSh 247.8 million, with several payments suspected of violating the Advocates’ Remuneration Order.
The probe, spearheaded by the Public Investments Committee on Social Services, Administration and Agriculture, also revisited the contentious construction of a multi-storey car park whose cost skyrocketed from KSh 909 million to KSh 3.97 billion, a 337 percent surge that remains unexplained despite previous referrals to the Ethics and Anti-Corruption Commission (EACC).
SHA’s Chief Executive Officer, Dr Mercy Mwangangi, told the committee that the agency inherited incomplete records from the defunct NHIF and is currently pushing through internal reforms. However, legislators expressed scepticism, arguing that the persistent trend of overpayments, missing documents, and inflated projects reflects deep-rooted corruption rather than transitional hiccups.
“Where’s the value for money when you spend KSh 77 million to recover just KSh 13 million?” Navakholo MP Emmanuel Wangwe questioned pointedly.
The committee also uncovered that SHA paid KSh 5.83 million in board allowances without any signed attendance records or meeting minutes, raising the likelihood that the payments were for meetings that never took place.
“If you claim the Board received five million, that means many needy Kenyans were denied access to healthcare,” observed Ndhiwa MP Martin Peters Owino.
Lawmakers said the audit findings portray an institution repeating the same mismanagement and excesses that plagued its predecessor, the now-defunct National Health Insurance Fund (NHIF). SHA’s credibility has been further undermined by reports that fictitious hospitals pocketed millions from its disbursements.
“The Finance Director has failed both the CEO and the institution by refusing to cooperate with auditors or provide credible explanations,” said Nominated MP Bishop Kosgei.
Ongoing SHA Controversies
Just last month, a number of private hospitals suspended services for SHA beneficiaries, accusing the authority of failing to clear verified claims worth billions.
According to the Rural and Urban Private Hospitals Association (RUPHA), representing over 700 health facilities, the government owes providers KSh 43 billion, with an additional KSh 24 billion still under assessment. Hospitals claim SHA arbitrarily rejected KSh 10.6 billion in claims, leaving them with no choice but to charge patients directly despite their active insurance contributions.
The Auditor-General also flagged massive irregularities in SHA’s KSh 104 billion healthcare digitisation project, citing blatant breaches of transparency and fair competition laws. The audit revealed that the contract was awarded without open tendering, lacked clear deliverables, and failed to specify how many facilities would be digitised or how health workers would be trained, even though KSh 7 billion had been set aside for capacity-building.
Meanwhile, private hospitals have criticised the eClaims system, a key component of SHA’s digital upgrade, saying it blocks genuine reimbursement requests while approving fraudulent ones, resulting in estimated losses of up to KSh 5 billion.
A year since its launch to drive Kenya’s universal health coverage agenda, the Social Health Authority continues to operate under a cloud of controversy, with critics warning that its current model is financially unstable and institutionally compromised.
