The statement on the financial position as of 30th June 2021 reflects a balance of Ksh.1, 147,172 under the current principal loan repayments due which relates to 2019/2020 and prior years no explanation was provided on why the loans have remained outstanding for a long period without being recovered, contrary to the provisions of Regulation 4.4 of Trans Nzoia County Nawiri Fund Regulations, 2019
The future of the Trans Nzoia County Youth and Women Development Fund remains uncertain after the Auditor General revealed that the fund’s management had failed to recover outstanding loans amounting to Ksh. 89,850,246 which have remained outstanding from 2019/2020. According to the auditor general, it is apparent that the recoverability of the loans issued is not feasible. A review of application forms used to obtain the loans revealed that several groups provided assets such as television sets, fridges, sheep and goats as security for recovery in the event of default.
However, the Fund Management did not provide evidence indicating where the assets were being held and how the Fund assured itself of the existence and values of the assets. In the circumstances, the Fund is not able to meet the objective for which it was established. It has also been discovered that the management failed to undertake an Independent Assessment of Systems and Internal Controls. Further, there was no evidence that risky areas had been identified in terms of loan awarded revenues, expenditure, frauds and errors.
On the Trans Nzoia County Nawiri Fund audit report, the statement of financial position as of 30th June 2021, reflects a balance of Ksh.1,147,172 under current principal loan repayments due which relates to 2019/2020 and prior years. No explanation was provided on why the loans have remained outstanding for a long period without being recovered, contrary to the provisions of Regulation 4.4 of Trans Nzoia County Nawiri Fund Regulations, 2019, which requires loan repayments to be made up to a maximum period of one year.
In the circumstances, the recoverability of the outstanding loan balances of Ksh. 1,147,172 is doubtful and management has not made a provision for the doubtful debts. Further, the report reveals that there is no sustainability of services by the fund based on the fund’s activities since its establishment in 2015/2016.
The report indicates that the Fund has only been able to disburse loans totalling Ksh. 1,666,444, out of which only Ksh. 519,272 or about 31% has been recovered leaving an outstanding balance of Ksh. 1,147,172. During the financial year 2020/2021 the Fund did not disburse any loans and managed to recover Ksh.3, 350 only. The poor performance is a pointer that the Fund is not able to achieve the objective for which it was established. In the circumstances, the ability of the Fund to sustain services is doubtful.