Audit exposes massive financial irregularities at Women Enterprise Fund
This was part of a broader issue where multiple paybills, set up for loan repayments and disbursements to women’s groups, were handled outside the mandated government system.
The Women Enterprise Fund is under intense scrutiny following an alarming audit report by the Auditor General, Nancy Gathungu.
The audit has revealed major discrepancies and unaccounted for funds amounting to over Sh1.4 billion, exposing potential financial mismanagement.
The audit, which covers the financial year ending June 30, 2024, highlights numerous irregularities, from unauthorized transactions to unexplained variances in financial statements, placing the future of the fund in serious doubt.
A shocking revelation from the audit points to Sh212 million being transacted through unauthorized mobile paybills, with no explanation or record of where the money went.
"In the circumstances, the mobile money balances of Sh212 million could not be accounted for," Gathungu noted in the report.
This was part of a broader issue where multiple paybills, set up for loan repayments and disbursements to women’s groups, were handled outside the mandated government system.
The government’s Executive Order, issued in August 2023, had called for the transition of all government payments to a single platform by August 10, 2023. However, the board ignored these directives, leading to the unaccounted funds.
Further complicating matters, an additional Sh34 million was paid out as gratuities, but without proper documentation or verification of the recipients.
The absence of proper paperwork raises questions about the legitimacy of these payments, making it impossible for the auditor to confirm the accuracy of the fund’s financial activities.
"In the circumstances, the accuracy and completeness of the gratuity payments could not be confirmed," Gathungu stated.
The audit also revealed disturbing discrepancies in the fund’s financial records.
Variances totaling Sh1.2 billion were found in the financial statements, with significant mismatches in recorded expenses.
For instance, the fund reported spending Sh68 million on computer maintenance, but only Sh9 million was listed in the general ledger.
Similarly, a variance of Sh118 million was flagged in loans to women’s groups, indicating a lack of proper oversight.
Another worrying finding was the fund’s mounting losses.
During the year under review, losses grew to Sh330 million, with a 49 percent decline in profitability from the previous year.
The fund's ability to meet its financial obligations is now in question. Gathungu warned that, if not managed properly, the fund risks becoming technically insolvent and unable to fulfill its obligations.
"The fund continued to operate at a loss which if not managed may affect its future operations and sustainability of services," the report reads.
Moreover, the audit revealed that the fund had failed to disclose Sh5 million in income from fixed deposits and had not prepared financial statements for its loans and mortgage schemes.
These failures compound the growing concerns about the transparency and accountability of the fund’s management.
"The recoverability of the Sh71.3 million couldn’t be confirmed," Gathungu remarked, referring to the outstanding loans the fund has yet to collect.
