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.

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Uasin Gishu Governor Jackson Mandago is on spot over Sh 372 million stalled projects. According to an auditor report, the residents were denied services due to the incomplete projects and could have lost millions as a result of contracts terminated by Mandago’s government.

This was unearthed during the questioning of the governor by the Senate watchdog committee over audit queries on Monday. These queries were flagged by Auditor General Nancy Gathungu for the period ending June 30th, 2019.

Mandago faced a hard time trying to explain to the Senate County Public Accounts and Investments Committee why several projects started by his administration, some in his first terms, had stalled thus denying services to the residents.

It was revealed that his administration had terminated some contracts, thus exposing the taxpayer’s money to risk of loss. The auditor’s report indicated that out of the 54 development projects worth Sh 1.35 billion initiated by the county, 9 worth Sh 372.71 million had stalled and sh 79.57 million had been paid to contractors.

According to the report, the county executive failed to explain why the projects stalled or disclose actions it had taken to revive and complete them.

At the time of the audit, six projects worth 522.63 million were ongoing at the time of the audit. No value had been received on funds totaling 79.57 million invested therein and after. It further stated that the services the projects were to provide to the residents of Uasin Gishu were no realized.

Additionally, the county government was also accused of spending 132.08 million on a building that later stalled. The auditor also pointed out delays in the construction of milk coolers despite the county making payments amounting to 187.07 million shillings

The report further states that the construction of 13 cooling plants were contracted at 63.45 million and payments totaling 40.88 million were made but they stalled. Thereafter, the contracts were terminated and the tenders were re-advertised in October 2019.

In his defense, Mandago said that most of the projects were in their initial stages of implementation when the auditors visited the site. Adding that some of them have since then been completed, while others are already in use and others at various stages of completion.

He told the oversight committee chaired by Migori Senator Ochillo Oyacko that his government had to terminate some projects after finding out that some contractors were unable to complete the projects. He said some contractors under-quoted the contract sum, and in the middle, the found out the sum was not enough. The legislators however had an issue with the high number of stalled projects and terminated contracts.

Governor Mandago denied any loss f cash stating that the contractors were only paid for what they had done. Nandi Senator Samson Cherargei did not spare the governor as he asked if due diligence was conducted by the county administration in award of tenders. Cherargei added that termination of tenders and re-tendering have consequences.

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A report by Auditor General Nancy Gathungu has revealed that Kenya Medical Supplies Agency (KEMSA) procurement scandal saw Kenya lose Ksh.2.3 billion.

The report  tabled to the Senate on Wednesday shed light on how KEMSA violated several laws, leading to the staggering losses

The reports notes that for instance, some of the companies that were awarded multimillion tenders had only been around for a few months.

The auditor noted some of the companies that were awarded the contract were established in January and February this year, pointing to possible collusion.

The report also reveals fraud in procurement and collusion between Kemsa bosses and the companies that were awarded multi-billion shilling contracts.

The Senate heard that companies that had been around for less than year were awarded contracts without having the necessary qualifications to supply medical equipment.

According to the auditor, Kemsa over procured items with Sh6.3 billion which are still lying idle in its warehouses.

If the items are sold at the current market prices, Kemsa will only recover Sh4 billion, leading a whopping loss of Sh2.3 billion.

The report shows that Kemsa illegally and irregularly diverted monies meant for UHC to purchase Covid-19 items without approval of the Ministry of Health.

In recommendations to the Senate, the office of the Auditor General calls government agencies to conduct probe to establish criminality in the procurement process and collusion between the management and companies awarded the contracts.

The same report also wants KEMSA to withhold any further processing of COVID-19 related claims until an independent audit is done.

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