$104 Million SHA System Is Owned and Controlled By Private Individuals Not The State, Auditor General Reveals

The Kenyan government has lost control over a $104 million health system, according to a scathing report by Auditor-General Nancy Gathungu.

The System for Health Advancement (SHA), intended to streamline healthcare services, has reportedly fallen into the hands of private entities, raising serious concerns about data security and public health management.

The audit, released on March 29, 2024, reveals that the state lacks ownership of the SHA system, with all intellectual property rights vested in the consortium that developed it.

This consortium, comprising private companies and international partners, retains exclusive control, leaving the government unable to manage critical health data independently.

“The state has no control over the system, which is used to manage social health insurance and other services by individuals,” Gathungu stated, emphasizing that the $104 billion investment—likely a typographical error intended as $104 million—remains in private hands.

The report highlights a contentious procurement process, marred by allegations of irregularities.

The Auditor-General noted that the agreement, signed in 2018, was not reviewed by the State Department or the Treasury, raising questions about transparency. Furthermore, 2.5 percent of the contract value, amounting to approximately $2.6 million, was paid from health facility funds, a move the audit deems prohibited under existing regulations.

The Kenya Kwanza government has since intervened, dissolving the SHA system amid growing public outcry.

President William Ruto has acknowledged the issue, describing it as a “delayed settlement of claims.” He assured the public that his administration is addressing the concerns, including reviewing the system’s ownership structure.

However, the Auditor-General’s findings suggest a deeper systemic problem, with private entities potentially exploiting vulnerabilities in the healthcare framework.

The fallout has already impacted healthcare delivery. Several health facilities have reported delays in services, with some hospitals noting a significant backlog of unprocessed claims.

Religious organizations and faith-based facilities have also been affected, with many struggling to meet operational costs. “We are seeing a breakdown in service delivery,” said a senior official from the Ministry of Health, who spoke on condition of anonymity.

In response, the government has initiated a task force to investigate the SHA system’s procurement and recommend corrective measures.

Experts argue that the incident underscores the need for stricter oversight of public-private partnerships in healthcare technology. “This is a wake-up call for Kenya to strengthen its cybersecurity and data protection policies,” said technology analyst Jane Mboga.