Published on May 6, 2024 by Agencies for Kenya Online News
Last Updated on 2 years by Agencies for Kenya Online News
The Kenya Union of Savings and Credit Union (KUSCCO) board of directors has been disbanded by Cooperatives and MSMEs Development Cabimet Sevretary (CS) Simon Chelugui
This follows a preliminary examination of the union’s financial records conducted by the Grant Thornton audit firm, which uncovered deficiencies in resource management.
“It has come to light that despite incurring losses, the union proceeded to declare bonuses, dividends and interest a practice that cannot be condoned,” Chelugui said in a statement to newsrooms.
“In light of these egregious lapses, a consultative meeting convened on April 25, 2024, with representatives from depositors reached a unanimous consensus on the future of the Union.”
It was concluded that the current board of directors has allegedly failed in its duty to steer the union effectively, he said.
The dismissal comes in the wake of the findings of an inspection carried out by the Commissioner for Cooperatives Development last year revealing discrepancies in the management and operations at the union.
This saw top managers and administrators who were implicated being relieved of their duties as part of an administrative measure.
“As custodians of cooperative resources, we remain steadfast in our duty to ensure responsible and transparent management for the benefit of all stakeholders,” he said.
The CS at the same time directed the Commissioner to appoint an interim board of 15 members drawn from esteemed leaders of affiliate cooperatives to oversee the union’s transformation and rehabilitation.
“This interim board will be tasked with overseeing the transformation and rehabilitation of the union, with the full support of a dedicated technical team,” he said.
Some of the irregularities highlighted in the preliminary report by Grant Thornton are high cash withdrawals with expected operations of Sh5.4 billion between February 2013 and April 2024 and suspicious cash transfers of Sh318 million to another senior official.
Other flaws identified are loans to senior KUSCCO staff and directors (including subsidiaries) totalling Sh61.5 million, double purchase of the same land (LR 23269/35) of Sh80 million and suspicious cash transfer of funds to insurance agencies amounting to Sh434 million.
The firm according to the CS also noted some Sh200 million cash transfers from KUSCCO accounts to staff accounts and inter-subsidiary cash transfers.
It was further observed that KUSCCO opened for KUSASA with the customers’ cheques received at KUSASA being endorsed and deposited at the KUSCCO account for clearing.
