The Auditor-General has warned that the Sacco Societies Regulatory Authority (Sasra) risks a loss of Sh206 million deployed to set up a risk-based supervision system following a delay in the implementation of the project without explanation.
An audit report for the financial year ended June 2020 says that available records show that three firms contracted to supply and install the risk-based supervisory system, electronic document management system and related hardware system were supposed to complete the project by August 2020.
However, at the time the audit was done four months into the six-month implementation window, no documentary evidence was provided to ascertain whether objectives were being met.
According to the timeline in the contract, the project should have been at the deployment phase four months after the commencement of the contract. The management also did not explain the low level of budget absorption.
“Consequently, value for money may not have been obtained on the project,” said Auditor-General Nancy Gathungu in the Sasra audit report.
The regulator mooted the system to better monitor liquidity levels of deposit-taking saccos and keep an eye on their capitalisation requirements to protect savers from the loss of their funds.
Fraud is the second biggest cause of concern in the sector and has seen members lose millions of shillings in recent months, shining the spotlight on the efforts to curb the vice.
Fraud is the fourth biggest source of complaints from members in deposit-taking saccos at 9.64 percent. Complaints on guarantors and guarantee for loans is at 12.05 percent, loans issuance 22.29 percent and claims and refunds of savings at 36.75 percent.