The government has disbanded the management board of the Kenya Union Savings and Credit Cooperatives (KUSCCO) on the grounds of mismanagement.
Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Cabinet Secretary Mr Simon Chelugui disbanded the board and ordered Commissioner of Cooperative Mr Joseph Obonyo to appoint an interim board.
The order by the CS saw a section of managers and some administrators dismissed to pave the way for an in-depth audit of the organization’s accounts.
In the mismanagement of the resources at the organisation, an insurance agency got Sh 434 million in unclear circumstances.
“Further, the Commissioner for Cooperative Development is directed to appoint an interim board comprising fifteen members drawn from esteemed leaders of affiliate cooperatives, per the Cooperative Societies Act CAP 490 Laws of Kenya,” read a statement from CS Chelugui.
The CS added that a new board is expected to steer KUSCCO’s transformation drive with the help of a technical team.
The action by the CS followed an inspection at the organisation that was conducted in October last year, by the office of the Commissioner for Cooperative Development that exposed the administrative errors.
The inspection by the cooperative department, was after analysis of finance records conducted by Grant Thornton, a private audit company, exposed massive irregularities in finance management, under the watch of the board and the managers.
An other concerns by the auditor was the mysterious transfer of Sh 318 million to the KUSCCO Housing Society Secretary accounts.
A senior manager in the organisation, the report exposed how he received a Sh50 million loan, as others staff are listed to have received the loans irregularly.
The organization suffered a loss of Sh80 million over double purchase of a single piece of land, and questionable cash transfers to staff, including the Managing Director, who got Sh67 million.
Two other members of the staff got cash transfers of Sh 118 million and Sh 15 million respectively.
