The latest report by the Auditor-General on Members’ Car Loan and Mortgage Scheme Fund for the year ended 30th June, 2021 reveals a number of malpractices and fraud to the fund by the executive in Nyandarua county.
According to the report, the fund disbursed a car loan of Ksh. 2,400,000 for the year ended 30th June, 2021; however, documents provided for audit revealed that the loan was applied to purchase a vehicle from a scheme member who was both the seller and the buyer.
In addition, the transaction was not supported by a sale contract or valuation report. In the circumstances, the validity and completeness of the loan disbursements paid out could not be confirmed. The fund also spent Ksh. 310,100 on allowances for committee members; however, the expenditure was not supported by way of committee member names, appointment letters, and rate of payment and meeting minutes.
Further, the sitting allowances were paid to eleven (11) members instead of five (5) members in breach of Regulation 6(1) of the Nyandarua County Executive Committee Members’ Car Loan and Mortgage Scheme Fund (Amendment) Regulations, 2015 which limits committee membership to only five persons. The Auditor General also discovered that Ksh. 11,585,281 in respect of loans was owed by three (3) scheme members, which were not serviced during the year under review.
Management explained that the loans were owed by individuals whose contracts were terminated. However, there was no evidence of efforts made by management to recover the outstanding loan balances. In the circumstances, the recoverability and completeness of the loans could not be confirmed.
