Kenya’s public health financing system has been rocked by a damning audit that exposes massive irregularities amounting to Sh49.29 billion within the Social Health Authority (SHA), raising serious questions about the integrity of the country’s Universal Health Coverage programme.
A report by Nancy Gathungu covering the 2024/25 financial year details widespread unsupported payments, fraudulent claims, and systemic weaknesses in the management of the Social Health Insurance Fund (SHIF), the main financing arm of the government’s health insurance system.
Among the most shocking findings are records showing a patient who allegedly underwent open heart surgery four times in a single day and another whose medical records indicate ten childbirth deliveries within a single year, all of which were approved and paid for by the fund.
Auditors say these are not simple data errors but indicators of a deeply compromised claims system.
Billions in unsupported claims
According to the report, the fund processed Sh49.29 billion in irregular, unsupported, or potentially fraudulent transactions during the year under review.
The figure is staggering: SHIF collected Sh57.7 billion in total contributions, meaning the questionable transactions account for more than 85 percent of all contributions.
The largest share of irregularities involves Sh26.84 billion in unsupported claims paid to health facilities, with no documentation proving that services were actually delivered to patients.
Auditors say the payments account for nearly a third of the fund’s disbursements during the year.
Beyond unsupported claims, the report identified Sh7.32 billion paid to 1,091 facilities for services not authorised under the SHIF benefits package, and Sh1.57 billion paid to health facilities that were not contracted by the authority.
Another Sh4.78 billion was disbursed using service codes that have not been gazetted, making the payments legally questionable.
Surgical and maternity claims raise alarm
The audit also flagged 3,235 instances of repeat or unapproved surgical procedures, with a total payout of Sh445 million.
In one extreme case, records showed a patient undergoing open heart surgery four times within a single day, a medical scenario experts say is physiologically impossible.
“Open heart surgery involves stopping the heart and placing the patient on a bypass machine,” a medical professional familiar with such procedures said. “The recovery alone takes months, making multiple surgeries in a day impossible.”
Similarly, auditors identified 6,392 cases of repeated childbirth claims, including one patient whose record showed ten deliveries within the same year.
The total payout for the maternity-related anomalies was Sh148 million, auditors noted.
Missing transfers and unexplained payments
The report further raises concerns about missing or unexplained fund transfers.
Auditors found that while SHIF reported transferring Sh7.3 billion to the Social Health Authority, the authority only recorded receiving Sh3.9 billion, leaving Sh3.37 billion unaccounted for.
In another anomaly, Sh1.34 billion was transferred to the bank account of the defunct National Hospital Insurance Fund (NHIF) between January and June 2025, despite the fund having been replaced by the Social Health Authority.
The audit report notes there is no documented explanation for the transfer or where the money eventually went.
Technology system under scrutiny
The findings also cast doubt on the integrity of the digital claims platform used to process payments.
The system, which is part of a Sh104.8 billion technology contract, is operated by a private consortium led by Safaricom PLC alongside Apeiro Limited and Konvergenz Network Solutions.
Auditors say the system was deployed without comprehensive testing, lacks proper governance frameworks, and is not owned by the government.
The report further notes that the Social Health Authority does not have full control over the digital infrastructure used to process claims, raising concerns about oversight and accountability.
Fraud investigations underway
The audit findings come as criminal investigations into health insurance fraud continue.
In February 2026, the Office of the Director of Public Prosecutions approved charges against several hospital owners and a regulatory official linked to fraudulent facility licensing.
Among those charged is Harun Liluma, a senior employee of the Kenya Medical Practitioners and Dentists Council accused of facilitating the illegal licensing of medical facilities that later received payments from the health fund.
Financial sustainability concerns
The audit also raises concerns about the sustainability of the health insurance system.
While the fund collected Sh57.7 billion in contributions, it spent Sh96.1 billion on claims and operations, leaving it with a deficit of Sh38.3 billion.
Auditors say this means the fund disbursed 158 percent of the contributions it collected, a trend that could threaten the programme’s long-term viability.
Growing calls for accountability
The findings have intensified calls for a comprehensive investigation into the management of the Social Health Authority and the wider Universal Health Coverage programme championed by President William Ruto.
Governance experts argue that the scale of the irregularities points to systemic weaknesses across multiple institutions responsible for regulating and processing health insurance claims.
The case against the accused individuals linked to fraudulent facility licensing is expected to be mentioned at Milimani Law Courts on March 12, 2026, but analysts say the prosecutions so far represent only a small fraction of the alleged financial exposure.
With nearly Sh50 billion in questioned transactions, the Auditor-General’s report has placed Kenya’s health insurance system under intense public scrutiny, raising urgent questions about how billions intended for patient care could have been siphoned through ghost surgeries, phantom births, and questionable claims.
