The Sacco Societies Regulatory Authority (SASRA) has launched a recovery effort targeting over KSh550 million allegedly misappropriated by the management of Afya Sacco Society Ltd. The regulator’s intervention follows a damning inspection report that uncovered a trail of unaccounted withdrawals, excessive allowances, and undocumented cash transactions spanning more than two years.
According to a letter dated October 31, 2024, signed by SASRA Chief Executive Peter Njuguna, the Sacco’s financial woes arose from systematic breaches of the Sacco Societies Act and its regulations. The report reveals that KSh90 million was withdrawn from the Sacco’s back office (BOSA) between January and July 2024, in batches of KSh10 million via cheques, yet the transactions were not reflected in the official register.
Another KSh100 million was siphoned from the front office (FOSA) during the same period, also through cheque withdrawals in KSh10 million batches. These funds remain unaccounted for, raising serious concerns about internal controls and transparency.
KSh360.51 million was also paid out in cash between February 2022 and August 2024, with no supporting documentation. Among these payouts were transport allowances for board members amounting to KSh5.3 million in 2022, which rose to a staggering KSh13.9 million in 2023, and KSh6.8 million for just the first eight months of 2024.
READ ALSO;
In response, SASRA has ordered the immediate closure of the Sacco’s cash office and issued cease-and-desist directives against further cash transactions. The Sacco has also been placed under administrative and heightened supervision.
The board and management are now required to recover all irregular payments made to directors and supervisory committee members, calculated at fixed monthly rates of KSh67,515 and KSh52,500 respectively, dating back to February 2022.
The regulator has also directed the Sacco’s chief executive and internal auditor to compile a comprehensive report within three months, detailing the use and accountability of the KSh360.51 million in question.
The scandal has sparked outrage among members, primarily public health sector workers who have been unable to access loans or withdraw savings. While management previously blamed liquidity issues on delayed remittances by county governments, SASRA’s findings suggest deeper structural and governance failures at the nearly 60-year-old institution.
By Masaki Enock
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
