The Sacco Societies Regulatory Authority (SASRA) has issued a stern warning to external auditors who fail to submit mandatory statutory reports on time, saying they risk permanent deregistration and a lifetime ban from auditing any cooperative institution in Kenya.
In a circular released this week, SASRA revealed that several audit firms had either failed to file or delayed submitting reports on the financial and operational status of regulated Savings and Credit Cooperative Societies (Saccos) for the year ended December 2024. The regulator said this contravenes the Sacco Societies Act, which requires submission within four months after the close of a financial year.
“The authority has noted with concern that some external auditors and audit firms which rendered external auditing services to regulated Sacco societies for the financial year ended December 2024 have failed and/or neglected to furnish the authority with the prescribed statutory report,” said SASRA CEO David Sandagi.
Sandagi also warned that failure to comply would attract the harshest penalty under the law. “Any failure to submit the statutory report for any financial period of auditing and within the prescribed timelines shall result in a permanent removal from the annual list of registered and approved external auditors for regulated Sacco societies,” the circular stated.
Under Section 45 of the Sacco Societies Act, SASRA maintains a list of approved external auditors eligible to conduct audits for regulated Saccos. Removal from this list effectively bars a firm or individual from any future audit work in the cooperative sector.
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“SASRA has approved 402 external auditors for the financial year ending December 2025. Those who failed to submit reports for 2024 have been given a 30-day window to comply or face permanent expulsion.” Sandagi said
The regulator’s crackdown comes amid growing concerns over governance failures and liquidity crises in parts of the Sacco movement. In recent years, several societies have collapsed due to weak oversight, prompting SASRA to tighten reporting obligations and demand greater transparency from auditors and boards.
Earlier this year, a forensic audit by PricewaterhouseCoopers exposed a Ksh13.3 billion financial scandal at the Kenya Union of Savings & Credit Cooperatives (KUSCCO), involving cooked books, phantom profits, and large unexplained withdrawals by former top executives.
Section 44(3) of the Sacco Societies Act mandates every Sacco to appoint external auditors during annual general meetings. These auditors are required to prepare a statutory report and submit it to SASRA within four months after the end of the financial year, meaning the deadline for 2024 reports was April 30, 2025.
The statutory report supplements the internal audit presented to Sacco management and provides SASRA with an independent assessment of the institution’s solvency, internal controls, and compliance with prudential standards. Without it, the regulator says its ability to safeguard billions in member deposits is severely compromised.
By Masaki Enock
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