Gathungu says MPs have final say on her SHA ownership report

The Auditor General Nancy Gathungu yesterday told Parliament that it has the final say on how to resolve the riddle over ownership of the controversial Social Health Authority (SHA) after she revealed that it was not owned by the government.

Ms Gathungu appeared before the Senate County Public Accounts Committee and said she cannot give recommendations on what is to happen after revealing that the platform was owned by private entities.

“I have pronounced myself on the audit report on Social Health Insurance Fund where I have concluded that there was no effectiveness and lawfulness on the use of public resource. The matter is now squarely before Parliament to decide on what to do with it,” she said.

Nairobi Senator Edwin Sifuna asked Gathungu to state whether Social Health Insurance Fund should be declared a criminal enterprise and terminated. “Can we agree before this committee today that we are going to terminate SHA and SHIF and face the consequences in court of arbitration since it seems not to benefit the citizens but only a few individuals, can we take a drastic action for the benefit of Kenyans?” asked Sifuna.

Homa Bay Senator Moses Kajwang said he hoped the matters raised by the Auditor General concerning ownership of SHA will not fade away at the altar of political expediency and that Kenyans were happy that an impartial and independent office had looked into the matter.

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Kajwang said he believed that both the Senate and National Assembly will look into the matter raised by the Auditor General as far as the ownership and management of Social Health Authority system is concerned since it was of great concern to Kenyans.

“The Auditor General has made it clear that her reports are not complete until they are brought before Parliament which is to do prescription having told us that the patient is sick. I hope this issue of SHA does not fade away in the altar of political expediency,” said Kajwang.

The office of the Auditor General has highlighted five ways in which the government flouted the law when setting up the Social Health Authority in a report on state organs for the year 2023-2024 released which has raised attention of Kenyans.

Gathungu underlined unbudgeted and non-competitive procurement, undefined scope of works, lack of agreements on payments, and unfavorable contract clauses as some of the shortcomings of Social Health Insurance Fund. Her report raised concern after it established that the government invested Sh104.9 billion into Healthcare Information Technology Digitisation system without interrogating some clauses in the contract. “In the period between 2023 and 2024, the State Department of Medical Services in the Ministry of Health procured a digital system for health records worth Sh104 billion,” stated the report. Gathungu blamed the state officers for giving up ownership of the system and all its intellectual property rights to a private entity with the contract stating that any dispute is to be settled under the rules of the London Court of International Arbitration.

However, the Auditor General advises that since the procurement was done under the Public Procurement and Asset Disposal Act of 2015, disputes should be referred to the Public Procurement Administrative Review Board which is according to the law.

She pointed out that the contract states that the government cannot access or control the SHA system with the procuring entity and government health agencies not allowed to build product or service which competes with system or undertake similar functions.

 The Auditor General pointed out that the purchase of the system was not included in the procurement plan nor the medium-term budgetary expenditure framework which was contrary to Section 53 (7) of the Public Procurement and Asset Disposal Act, 2015.

“The Public Procurement and Asset Disposal Act, states that the procurement plans may be prepared in a format set out in the regulations and shall be consistent with the medium- term budgetary expenditure framework for projects or contracts beyond one year,” said Gathungu.

She revealed that during the procurement of the system a competitive process was not carried out contrary to Article 227(1) of the Constitution which requires a fair, equitable, transparent, competitive and cost-effective way of acquiring goods and services

Gathungu noted setting up of SHA involved installing the system in all public health facilities as well as training healthcare workers at a cost of Sh7 billion but after reviewing documents the officers in charge neither specified the number of health workers nor health facilities involved.