The legitimacy of two key cooperative sector funds has come under parliamentary scrutiny, with Members of Parliament (MPs) demanding urgent reforms and full disclosure from the State Department for Co-operatives.
The Special Funds Accounts Committee, chaired by Migori MP Fatuma Zainab, has directed the department to submit all outstanding audit documents to the Office of the Auditor-General within 14 days.
Appearing before the committee at Parliament Buildings on Tuesday, Principal Secretary State Department for Cooperatives, Patrick Kilemi was questioned over the governance of the Cooperative Societies Liquidation Fund and the Management Supervision Fund.
MPs raised concerns about the absence of formal leadership structures, including a Chief Executive Officer and Board of Trustees, with the funds currently managed under the audit section of the Commissioner’s office.
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Noting that the current setup may not meet legal thresholds for fund governance, Kilemi urged the committee to determine whether the structures in place conform to statutory requirements.
MP Kivasu Nzioka requested a comprehensive breakdown of the number of SACCOs operating in Kenya, while Nyatike MP Tom Odege questioned the long-term viability of the sector, citing cases where retired civil servants were unable to access savings held in collapsed SACCOs.
Defending the cooperative movement, Kilemi stated that Kenya hosts over 7,000 financial cooperatives, ranking first in Africa and sixth globally. He emphasized that SACCOs finance 65% of school fees nationwide and play a vital role in housing, transport, and investment. He added that the government is working on legislative reforms and insurance regulations to strengthen oversight.
However, the committee was stunned to learn that the Liquidation Fund failed to maintain separate financial accounts for nine consecutive years (2004–2012).
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The finance and audit teams responsible for the fund’s management during this period were criticized for lack of professionalism and delay in filing of the financial statements.
Partial documentation on the Management Supervision Fund, which oversees SACCO performance, was tabled before the committee as chairperson Zainab directs the PS to furnish all missing records within two weeks, stressing the need for transparency and accountability. “We must uphold transparency and safeguard public funds,” she said.
The committee’s findings and recommendations will be compiled into a formal report and tabled in the National Assembly, potentially triggering broader reforms in SACCO governance and cooperative fund management.
By Masaki Enock
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