A recent forensic audit conducted by the Sacco Societies Regulatory Authority (SASRA) has brought to light shocking revelations regarding the Kenya Union of Savings and Credit Cooperative Society (KUSCCO) during the leadership of former CEO George Ototo.
The investigation has exposed illegal deposits amounting to a staggering Sh18 billion, leading to potential criminal charges against key figures in the organization.
The findings of the forensic audit, which is now complete, have raised serious concerns about the management and operations of KUSCCO.
The report recommends criminal charges against several board members, including former chairman Magutu and vice chairman David Lagat, among others.
These individuals are accused of mismanaging funds and violating regulations that are designed to protect the interests of Sacco members.
The discrepancies noted in the audit highlight a big gap between the declared Sacco deposits and the actual funds held by KUSCCO.
Sources indicate that the cooperative is now facing severe financial challenges, reportedly operating on overdrafts while struggling to account for billions of shillings.
This financial irregularities has raised concerns among members and stakeholders, prompting calls for accountability and transparency.
George Ototo has resurfaced, seeking to regain his former position amid claims that he was unjustly removed by the Kenya Kwanza administration.
His attempts to lobby for a comeback are being fueled by the appointment of Wycliffe Oparanya as the new Cooperative Cabinet Secretary, who represents the ODM party in the current coalition government.
The former KUSCCO directors, ousted in the wake of the initial investigation, are rallying for their reinstatement, claiming their removal was unjust.
The audit has also revealed that directors borrowed substantial unsecured loans from KUSCCO, actions that did not serve the cooperative’s members effectively.
Under the directive of former Cooperative CS Simon Chelugui, SASRA was mandated to conduct an exhaustive investigation, leading to the interim management of KUSCCO while the findings were deliberated upon.
The audit extends its reach to New Fortis Sacco, where former KUSCCO chairman George Magutu was involved in directing an ill-fated deposit of Sh800 million that has since deteriorated.
This mismanagement, coupled with an alleged bribery scheme where Sacco officials received kickbacks for deposits, has further compounded the issues within these cooperatives.
Furthermore, the report has highlighted the misappropriation of funds in the Kitengela housing project, which has resulted in a complete failure of the initiative.
The housing units constructed under this project are described as shoddy and uninhabitable, raising further concerns about the oversight and governance of these cooperative societies.
New Fortis Sacco has also come under scrutiny for its recent decisions to distribute dividends from member deposits rather than surplus profits.
The financial statements presented at their annual general meeting have prompted suspicion regarding the accuracy and integrity of their financial practices, especially in light of significant increases in outstanding loans and deposits.
The implications of this forensic audit are profound.
The potential prosecution of former leaders, including George Magutu and George Ototo, for their roles in financial mismanagement sends a clear message about the need for accountability in Kenya’s cooperative sector.
With billions of shillings unaccounted for and numerous allegations of fraud, the future of KUSCCO and similar organizations hangs in the balance, leaving many members anxious about their financial security and the integrity of their cooperatives.
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