Records on loans worth Sh3.9 billion disbursed through the State-backed Uwezo Fund are missing, making it difficult to account for billions set aside for small enterprises soft loans.
Auditor-General Edward Ouko says a review of the Fund’s operation for year to June, 2018, indicate there are no documents of the loans issued or list of the groups that had accessed the credit.
Mr Ouko in his report says there were also no debtors’ ledgers detailing loans issued since inception and repayments made over the years on account of any loans recovery.
Records on loans worth Sh3.9 billion disbursed through the State-backed Uwezo Fund are missing, making it difficult to account for billions set aside for small enterprises soft loans.
Auditor-General Edward Ouko says a review of the Fund’s operation for year to June, 2018, indicate there are no documents of the loans issued or list of the groups that had accessed the credit.
Mr Ouko in his report says there were also no debtors’ ledgers detailing loans issued since inception and repayments made over the years on account of any loans recovery.
Majority of the groups that received soft loans from the government's Sh5 billion Uwezo Fund to promote their enterprises have defaulted on paying back the amounts within stipulated time, the government earlier said.
“There were also no comprehensive loan listings and or aging analysis in support of outstanding loans,” Mr Ouko said.
“Consequently, the accuracy, completeness, validity and recoverability of the unsupported and unaccounted for loans to group balance of Sh3,920,225,398 cannot be confirmed,” reads the audit report. Social protection departments earlier said 60 percent of the groups are yet to pay back the money to enable other deserving groups get access to the revolving fund.
The Uwezo Fund is a flagship programme of Kenya's Vision 2030 blueprint, which includes initiatives to enable women, youth and disabled persons access funds to promote businesses and enterprise at the constituency level and boost economic growth.
The financial irregularities at Uwezo Fund comes as the State prepares to merge it with the Youth Enterprise Development Fund and Women Enterprise Fund to form Biashara Kenya Fund.
The Treasury revealed terms of the loans through Biashara Kenya Fund regulations, which have been tabled in Parliament for approval and will lead to the merger of Uwezo Fund, Youth Enterprise Development Fund (YEF) and Women Enterprise Fund (WEF).
The fund is also on the spot over Sh7.5 million that was issued to persons whose details such as personal numbers and job groups were not indicated in the imprests schedule.
According the report, multiple imprests amounting to Sh10.1 million were issued to officers even before surrendering the previous ones that they took, a move which Mr Ouko said is illegal.
The audit further revealed that Sh492, 427 outstanding imprest was given to officers who had already left the fund with Mr Ouko saying recovering such amount is doubtful.
Mr Ouko has also questioned Sh5.4 million spent by the fund in transport, traveling and subsistence allowance but documents relating to the allowances were not availed for audit review.
The fund is further on the spot over Sh1.2 million that was used to buy airtime for the officers.
Out of the amount, Sh260, 000 worth of airtime was provided to officers in excess of their applicable entitlement contrary to regulations.
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