The ambitious Kshs 104.8 billion Social Health Authority (SHA) project of the Kenyan government has come under increasing scrutiny after Auditor General Nancy Gathungu disclosed that the state does not own or control the system, despite significant public expenditure.
The government’s choice to move forward with the project without first proving ownership of the system’s intellectual property and infrastructure is a major source of concern, according to the report.
In the report, Gathungu stated that “the consortium shall retain ownership of the system, system components, and all intellectual property rights,” cautioning that this significantly curtails the government’s power and supervision.
According to the Auditor General, this arrangement poses a serious danger to public money and healthcare delivery because it means that health facilities’ claims and contributions to Kenya’s Social Health Authority (SHA) will be used to finance a system that is not owned by the State.
To further exacerbate the dispute, the contractor was chosen directly through a Specially Permitted Procurement Procedure rather than through competitive bidding, a blatant disregard for Article 227(1) of the 2010 Kenyan Constitution.
Article 227(1) of the Constitution, which mandates a fair, equitable, transparent, competitive, and economical method of obtaining goods and services, was violated by this procedure, according to Gathungu.
In violation of Section 53(7) of the Public Procurement and Asset Disposal Act of 2015, the study claims that the project was also left out of the medium-term budgeted expenditure framework and the procurement plan.
According to the project’s finance plan, SHA member contributions, health facility claims, and track and trace solution fees will generate Ksh.111 billion in revenue over a ten-year period.
The model’s feasibility and the potential for higher healthcare expenses for citizens are called into question because it lacks a baseline survey, despite the substantial financial ramifications.
At the same time, these revenues have to be moved to an escrow account either daily or weekly, according to section 12.4 of the general conditions of the contract.
Concerns over accountability and transparency were further raised by the contract agreement’s failure to reveal information regarding the signatories to the escrow account.
Additional concerning provisions in the contract restrict Kenya’s capacity to innovate or adjust to future technological demands by forbidding the government from creating a rival system.
Bypassing regional legal processes, the London Court of International Arbitration will also settle disputes arising under the contract.
The Auditor General’s report identifies more general management shortcomings, including noncompliance with employment regulations and inadequate staffing for individuals with disabilities, in addition to the procurement catastrophe.
Additionally, she blasted the government for not meeting disability staffing standards, claiming that “only 2.3% of the staff are people with disabilities, far below the 5% mandated by public service policies.”
