Auditor General defends report on SHA procurement irregularities

Auditor General Nancy Gathungu has defended her report that lifted the lid on the Ksh.104 billion Social Health Authority (SHA) healthcare information technology system procurement irregularities, saying her report was factual and above board.

Gathungu, who appeared before the Senate County Public Accounts Committee (CPAC) on Tuesday shed light on some audit queries, noting that the system was marred by massive irregularities and unlawfulness.

The Auditor General stuck to her guns, despite criticism from some quarters of government on the veracity of her report.

“The issues that have been raised are my audit findings… already I have concluded that there was no effectiveness or lawfulness in that matter,” she said.

Further, Gathungu raised concerns regarding the system’s perplexing issues, including the repayment model adopted, which allows the service providers to deduct 2.5% of the member contribution, which translates to Ksh.10 billion a month.

“Internal controls have not been followed, the governance structure has problems, there is no risk management, and thus we have these issues,” she said.

“Kenyans are finally happy that someone has uncovered these special purpose vehicles which are special looting vehicles put together to get direct procurements,” CPAC Chair and Homa Bay Senator Moses Kajwang’ said in response.

“They take 2.5% from contributions and claims and something they call trace and track that they are also taking another 1.5% on track and trace,” Nairobi Senator Edwin Sifuna added.  

“The ultimate role and responsibility for action on OAG report is Parliament, so when you speak on the issues from the public, just look at that chain of accountability system,” Gathungu responded.

The Auditor General’s report highlighted several breaches in the procurement of the system, which is not owned by the government, including uncompetitive procurement, lack of payment arrangement agreement, unfavourable contract clauses, and lack of risk assessment, among others.