Government mandarins now admit SHA fraud, accuse colleague MPS of complicity

Government mandarins have now admitted the deep rot and fraudulent dealings in the controversial but much defended Social Health Authority (SHA) with the Majority Whip in the National Assembly and also the South Mugirango Member of Parliament Sylvanus Osoro pointing an accusing finger to colleague MPs for facilitating the fraud by siphoning monies meant for suffering patients through unscrupulous private hospitals.

SHA, the body tasked with managing Kenya’s ambitious universal healthcare programme has been thrown into the spotlight after revelations of alleged fraud and misuse of public funds within the institution.

A recent audit revealed fraudulent claims worth Sh10.6billion has been paid out to nonexistent hospitals and fake patient files.

Osoro has accused unnamed legislators of siphoning funds from the national insurance scheme through private healthcare facilities.

Speaking during an event in Narok, the legislator claimed that the said MPs are pocketing funds through their facilities and using them to fund press conferences and briefings.

“There are MPs up to now who are pocketing funds from SHA meant for hospitals and there are those with hospitals saying that every now and then operations are being done, and they take the money and hold press conferences,” said Osoro.

He took a jibe at former deputy president Rigathi Gachagua and parliamentarians allied to him, alleging that Gachagua stole from Nyeri County and his brother, the late Nyeri county boss Nderitu Gachagua.

“There are legislators who are corrupt……and we want to caution Wamunyoro (moniker coined for the former DP), he has no moral authority to talk about corruption. First of all, he’s the one who stole from Nyeri county and his late brother, everything about him is corruption,” remarked Osoro.

During Gachagua’s impeachment motion, Osoro had alleged that following the death of his older brother, Gachagua who was then the legislator for Mathira Constituency siphoned funds from the estate of Nderitu and left the family of the deceased with nothing.

Osoro cautioned parties and persons involved in schemes to defraud SHA, that they will face the full force of the law.

“Whether you like it or not, you’ll soon see parliamentary cartels and SHA cartels at the county levels being arrested,” said Osoro.

The South Mugirango legislator’s remarks come as various issues about SHA continue to come to light with various health stakeholders raising concerns about the feasibility and overall affair of the insurance scheme that replaced the now defunct National Health Insurance Fund (NHIF).

The audit showed that millions of shillings meant for essential health services and payouts to hospitals have been diverted through questionable procurement deals, inflated contracts, and payments to ghost facilities.

Fraudulent schemes exposed sources within the Ministry of Health and audit documents indicate that the plot involved ghost hospitals and clinics registered to receive payouts despite offering no services, inflated tenders for supply of medical equipment and IT systems, double payments to service providers linked to politically connected individuals and manipulation of claims processing, allowing insiders to siphon funds meant for genuine patients.

One senior official described the authority as a “goldmine for cartels who shifted from the disbanded NHIF to the SHA structure,” suggesting that past loopholes were never sealed during the transition.

The scandal has sparked outrage among Kenyans, who had pinned hopes on the SHA to end years of corruption and inefficiencies that plagued the National Health Insurance Fund (NHIF).

In March 2025, the Auditor General exposed a tainted Sh104.8billion contract for SHA’s digital healthcare system.

The contract was awarded without competitive bidding, lacked clear scope definitions, and alarmingly left ownership of the system with the contractor consortium instead of SHA.

This has raised concerns that the very systems designed to safeguard public funds are instead enabling misuse. In response to the scandal, SHA has suspended about 40-45 health facilities and blacklisted 12 doctors implicated in suspicious claims.

However, in a move that sparked public outrage, the authority pulled down its online payment list and health facility registry, making it harder for Kenyans to see where their money went.

Civil society groups and medical professionals are demanding a forensic audit, arguing that the fraud undermines the government’s flagship universal healthcare agenda.

“The Social Health Authority was supposed to restore trust in health financing. Instead, it has become a replica of the NHIF mess. Billions are being lost while hospitals lack drugs and patients are left unattended,” said Dr. Caroline Mutua of the Kenya Medical Practitioners Union.

The revelations come at a time when the government is under pressure to deliver on healthcare promises amid economic challenges.

Opposition leaders have seized on the scandal, accusing the administration of shielding powerful cartels while ordinary Kenyans continue to suffer.

Before he joined government through the broad-based arrangement that saw Raila Odinga’s ODM party incorporated in government, National Treasury Cabinet Secretary John Mbadi, then serving as the Deputy Minority Leader in the National Assembly called for the resignation of top SHA officials: “We warned that changing the name from NHIF to SHA would not solve the rot.

Now Kenyans are potentially seeing the same fraud in a new uniform.

As Kenyans await the outcome of ongoing investigations, the scandal has once again exposed how entrenched corruption in the health sector undermines public trust and denies millions access to quality healthcare.

More shocking were revelations by the Secretary General of the Central Orgianisation for Trade Unions (COTU) Francis Atwoli, who sits on the SHA board, who disclosed that the authority does not control the IT systems used to verify claims.

Instead, these systems are managed by the Ministry of Health and the Digital Health Authority, leaving SHA vulnerable and unable to guarantee oversight.