Members’ lethargy fuelling corruption in Saccos-Official

BySacco Review

Aug 6, 2018

By Azael Masese

Failure by co-operative members to interrogate the performance of their respective organisations has been identified as a weakness that needs urgent remedy.
Intriguingly, this happens even in Savings and Credit Cooperative Organisations (Saccos) where majority of the members are the elite, leading to embezzlement of members’ savings.
State Department of Co-operatives Senior Deputy Commissioner Geoffrey Njang’ombe disclosed that they have already liquidated assets of two societies and one of them recruited university staff.
“Some of these members whose societies have been liquidated are not ignorant but are not interested to know how the societies are operated,” he regretted.
His sentiments come at a time when the country is celebrating the 96th Ushirika Day. On this day, Kenya is put on the global map as number one in Africa and 7th globally in the co-operative movement.
Though education for members is a critical principle in the co-operative movement Njang’ombe underscored the need to be conducted to reduce cases of abuse of the members’ savings.
“If the members are aware, they cannot be compromised,” he noted, adding that in some instances, the audit reports are rushed through.
Without the capacity to interpret the financial reports, this further complicates the equation creating a loophole for possible misuse of the savings.
In some instances, the presentation is manipulated and there is very little disclosures made, hence the need to have an informed membership to hold the board and management accountable.
Another critical structure that can prevent possible embezzlement of society funds is the supervisory committee.
The committee is expected to oversight the operations of a particular society and table its findings during the Annul General Meetings (AGMs) or Annual Delegates Meetings (ADMs).
However, it becomes vulnerable to abuse as the board might influence who is appointed into it. “But if it is properly left to function, it will ensure members’ interests are safeguarded,” he noted.
Another grey area he singled out is external auditors who also might be compromised and never raise a red flag when there is a possible misdeed.
“Some external auditors are compromised and share the loot with the board hence not reliable,” he pointed out.
With co-operative functions devolved, he also warned on the need for caution to be observed, saying that co-operatives officers are not facilitated to run programmes.
“If there is no intervention, this might increase corrupt practices,” he warned.
However, he said there are a few external auditors who are professional but the fee they demanded is beyond the reach of many societies.
If these concerns are addressed, Njang’ombe remained upbeat that the co-operative sector is on the right path.
“There is growth in Saccos participating in the housing sector, transport sector besides many counties registering new ones either as multipurpose or those in the Diaspora,” he said.

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