KUSCCO Books of Accounts to Undergo Forensic Audit
The Kenya Union of Savings and Credit Co-operatives (KUSCCO) is facing scrutiny as its books of accounts are set to undergo a forensic audit. The audit aims to uncover the root cause of the issues at its Central Finance Fund, which the Union utilizes to address liquidity shortfalls among its members.
Mr David Obonyo, the Commissioner for Co-operatives Development, disclosed this during the 9th Annual SACCO Leaders Convention in Mombasa.
“KUSCCO has been having problems for the past four months, including delays in refunding deposits placed at its Central Finance Fund by several of its members. Some of these KUSCCO members have brought their complaints to my office, the Sacco Societies Regulatory Authority, and other authorities. We have identified what went wrong and administered ‘painkillers.’ But we are in the process of undertaking a forensic audit by a reputable accounting firm to fix the problems at KUSCCO,” said Obonyo.
He told Sacco leaders at the meeting that upon conclusion of the audit, any past or present official or director at KUSCCO found culpable would be prosecuted and surcharged.
“We have done our investigations at KUSCCO and found where the problem was and are now dealing with it. We have also received submissions from several reputable auditor firms interested in looking at KUSCCO books. Anyone found guilty will be prosecuted. We want money in the Union as well as all regulated deposit-taking Saccos to be safe and protected,”said Obonyo.
He assured the Sacco leaders that the Government wants the Union not to go down but to remain strong, kicking, and moving forward and will do everything to ensure problems at the Union are sorted.
While closing the same convention, which began on 19th February and ended on 22nd February 2024, Cabinet Secretary for Cooperatives and Micro, Small, and Medium-sized Enterprises Simon Kiprono Chelugui urged KUSCCO directors to begin the process of ensuring that the Union is brought under SASRA regulation to ensure confidence is restored in the sector and that money belonging to Sacco members is protected and prudently managed.
“It does not make sense for regulated Saccos engaged in the deposit-taking business to deposit their cash in another entity that is not under regulation,” said Mr Chelugui.
Mr. Chelugui added that his ministry and other regulatory organs are responsible for ensuring that KUSCCO remains stable and that deposits it holds for other DT Saccos are protected.
Acting KUSCCO Managing Director Arnold Munene urged the government to quickly resolve the Union’s issues so it could resume normal operations.
Disruptions at the giant Union began when the Government ordered a probe into its activities over several businesses and offering products without the requisite licensing and approvals from SASRA.
“The KUSCCO Central Finance Facility(CFF) has encountered significant challenges precipitated by panic withdrawals between October 2023 and January 2024, affecting its operations and ability to reimburse deposits to members.
We are hoping that our CFF will soon be brought under regulations and issued with a fresh license to allow us to resume normal operations as quickly as possible,” said Munene.
