- Sacco boards must nominate at least three eligible external auditors for members to vote on during the Annual General Meeting (AGM).
- The selected auditor’s appointment must be submitted to SASRA within 30 days, together with certified AGM minutes.
- External auditors should rotate after three years unless SASRA grants a waiver, while any midterm removal requires the regulator’s prior approval.
Sacco societies under the Sacco Societies Regulatory Authority (SASRA) now have clearer guidance on the steps they must follow when appointing external auditors, part of the regulator’s wider push to strengthen financial oversight and accountability within the cooperative sector.
According to guidance published by SASRA, the process is designed to give Sacco members a direct say in who audits their society’s books, while also giving the regulator oversight of the appointment and removal of auditors throughout the year.
The process begins at board level. A Sacco’s board is required to identify and recommend at least three eligible external auditors, presenting these names to members at the annual general meeting (AGM) rather than making the choice unilaterally.
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From there, the decision shifts to the membership. Sacco members attending the AGM are given the opportunity to vote and select one auditor from among the names put forward by the board, a step intended to reinforce the democratic, member-owned character of Sacco governance.
Once members have made their choice, the Sacco is required to formalise it with the regulator. The society must submit the selected auditor’s name together with a certified copy or extract of the AGM minutes to SASRA, and this must be done within 30 days of the meeting.
SASRA’s framework also addresses how long an auditor can serve. As a general rule, Saccos are expected to rotate their external auditor after a three-year term, a measure aimed at preserving auditor independence and reducing the risk of overly familiar relationships between a Sacco and its auditor. The regulator may, however, grant a waiver allowing a Sacco to retain an auditor beyond the standard three years.
The guidance further sets out safeguards for auditors who face removal outside the normal rotation cycle. Should a Sacco wish to remove its external auditor mid-financial year, it must first seek and obtain SASRA’s prior approval.
The Sacco is required to provide written reasons justifying the removal, and the auditor in question is given the right to submit written representations in response to the proposed removal before a final decision is made.
Taken together, the steps reflect SASRA’s broader mandate of protecting Sacco funds by ensuring that the appointment, retention and removal of external auditors is transparent, member-driven, and subject to regulatory checks at each stage.
By Benedict Aoya
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