PwC audit uncovers Sh192 million loans held by fired KUSSCO officials
The loans were among red flags raised in an audit conducted by PricewaterhouseCoopers.
A forensic audit has exposed insider borrowing by senior executives and board members of the Kenya Union of Savings and Credit Co-operatives (KUSSCO) amounting to Sh192.8 million, deepening the financial crisis facing the union.
The loans were among red flags raised in an audit conducted by PricewaterhouseCoopers, which also revealed that Sh13.3 billion in member deposits was at risk due to mismanagement.
Co-operatives and Micro, Small and Medium Enterprises Cabinet Secretary Wycliffe Oparanya released the loan details in response to concerns raised in the Senate.
The largest borrower was former Kuscco managing director George Ototo, who owed Sh103.11 million. Others included former finance manager George Owino (Sh17.98 million), internal auditor Kenneth Kimaiyo (Sh9.5 million), and several former directors whose loans ranged between Sh2 million and Sh20 million.
The audit showed that some of the officials defaulted and breached Kuscco’s lending policy, which limits borrowing to five times a member’s savings.
This financial misconduct first came to light after several Saccos complained about delays in accessing their deposits, prompting the Commissioner for Co-operative Development to carry out an inspection.
The inspection found falsification of records, diversion of funds, and loss-making investments. In December 2023, the board responded by sending four senior executives on compulsory leave.
They were later removed, along with the rest of the board, and interim officials took over to facilitate the audit.
Those affected included Ototo, Owino, former chair George Magutu, former legal officer Jackline Atieno and former radio project head Mercy Muthoni.
They were later charged in court with theft of Sh82.8 million from the union and have denied the charges.
