Where is the money? SHA board on the spot over Sh253m irregularities
SHA Chief Executive Officer Dr Mercy Mwangangi.
What you need to know:
- The concerns were raised following an Auditor General's report that flagged a range of financial malpractices, including irregular legal expenses, unsupported board payments, and a failure to submit financial statements.
The Social Health Authority (SHA) board has been put on the spot over massive financial irregularities running into millions of shillings, which lawmakers argue could have denied thousands of Kenyans essential healthcare services
The concerns were raised following an Auditor General's report that flagged a range of financial malpractices, including irregular legal expenses, unsupported board payments, and a failure to submit financial statements.
The report emerges as legislators raise concerns over the ‘tiring’ trend by public entities to use the coronavirus pandemic, which was globally contained over two years ago, as an excuse for their failure to account for taxpayers' money.
Nearly two years since it was constituted, the SHA Board has incurred a total of Sh253.53 million in irregular expenses, comprising irregular legal expenses (Sh247.8 million) and unsupported payments to the Board itself (Sh5.83 million), according to the Auditor General.
“We are talking about billions of shillings of taxpayers’ money,” said Saboti MP Caleb Amisi during a Parliamentary Public Investments Committee session. Mr Amisi, who is also the vice-chairperson of the National Assembly Public Investments Committee on Social Services, Administration and Agriculture, dismissed what he called a “tired excuse” by government entities blaming their failures on the long-contained Covid-19 pandemic.
Last Wednesday, the SHA board officials, led by Dr Mercy Mwangangi, were hard-pressed to explain the issues highlighted by the auditor’s report for the financial years 2021/2022 to 2023/2024.
The MPs were stunned to learn that the board paid a whopping Sh91.6 million in legal fees for cases valued at only Sh13.9 million—an overpayment of Sh77.6 million.
“When you collect Sh13 million by paying Sh77 million, where is the value for money?” questioned Committee Chairperson Emmanuel Wangwe, the Navakholo MP.
Supporting documents
Further, the Auditor-General queried Board meetings' expenses amounting to Sh5.83 million without supporting documents, including minutes and a signed attendees register.
The legislators, led by MP Martin Peters (Ndhiwa), criticised the unsupported outlay expenditure, stating that: “If five million was paid to the Board, it means many Kenyans were wrongfully denied treatment services.”
The legislators also revisited the controversial multi-storey car park project, whose cost had ballooned to Sh3.97 billion from an original contract of Sh909 million—a variation of 337 per cent, with previous attempts by the Committee to have the project investigated by the Ethics and Anti-Corruption Commission (EACC) hitting a snag.
“The car park had more than two payments, which raised the budget,” stated MP Wangwe, directing the management to “ensure tabulation of all the transactions as documented in the books of account.”
The Auditor General further flagged the board’s failure and delay in preparing financial statements, making it impossible to confirm the accuracy of a Sh57.22 million car loan balance and a Sh1.29 billion mortgage scheme balance.
The car loan scheme, which is administered by the National Bank of Kenya Ltd, and the mortgage scheme under the Kenya Commercial Bank Ltd, have been running for over 12 years, according to the report.
The KCB Savings & Loan scheme, which has been in operation for over 20 years, is the oldest.
In response, the SHA Board management explained that over the years, the management has been reporting the scheme balances under the Long-term Deposits. “The generation of financial statements has not been a requirement before.”
Dr Mwangangi assured legislators that reforms are underway to enhance the efficiency of the health authority, noting that presently, it is relying on available documents inherited from the defunct National Health Insurance Fund.
“We are committed to transparency and accountability. We have made significant reforms to address past weaknesses,” stated Dr Mwangangi.
To fully address the concerns raised on the prolonged inquiry regarding the stalled car park, the SHA management was instructed to furnish the Committee with evidence of cooperation with the EACC.
The MPs, however, faulted the SHA’s Finance Department for failing to cooperate with auditors, thereby "letting down the CEO and the health authority."
The SHA Board was established and its members appointed via a gazette notice by former Health Cabinet Secretary Susan Nakhumicha on November 22, 2023.
