NAIROBI, Kenya – An audit of the Women Enterprise Fund has raised serious concerns about financial mismanagement, with Auditor General Nancy Gathungu revealing significant discrepancies and unexplained transactions in the fund’s operations.
In her adverse opinion, Gathungu highlighted numerous cases of questionable expenditures, missing documentation, and a lack of accountability that point to potential misuse of public funds.
The audit, covering the financial year ending June 30, 2024, unearthed a series of troubling findings.
Among the most alarming was the discovery that Sh212 million, which had been transacted through unauthorized mobile paybills, could not be accounted for.
The audit further revealed that Sh34 million had been paid as gratuities without the necessary documentation to support the payments.
Other irregularities included the transfer of Sh20 million from a mobile paybill in August 2023, with no details provided regarding where the funds were moved.
The fund, which manages loans and loan repayments for women’s groups, operated three mobile paybills for these transactions.
However, auditors found that the fund’s board had irregularly decided to recall the Sh212 million to the main account, despite an executive order from President William Ruto in August 2023 that mandated all payments be transitioned to a single government payment platform.
The audit also raised concerns over the fund’s failure to comply with the executive order to close non-designated paybills by August 10, 2023.
The unaccounted Sh212 million was flagged as a major red flag, with Gathungu asserting that the mobile money balances could not be traced or explained.
In addition to the missing funds, Gathungu questioned the legitimacy of the Sh34 million gratuity payments, which lacked proper documentation, including details of the payees and their employment contracts.
The lack of matching between financial statements and ledger entries further raised suspicions, with variances amounting to Sh1.2 billion in several expenditure lines, including Sh70 million in travel expenses and Sh29 million in board costs.
The audit also uncovered discrepancies in the fund’s loan disbursements, with a Sh118 million variance in loans to women’s groups, as well as a Sh59 million discrepancy in computer maintenance costs.
The fund’s financial statements indicated an expenditure of Sh68 million on computer maintenance, while the general ledger only recorded Sh9 million.
Another troubling finding was the unrecorded Sh678 million in the fund’s ledger, casting doubt on the accuracy of its financial statements.
Gathungu also flagged a variance of Sh5 million in staff costs, with the fund’s financial statements showing Sh374 million spent, while payroll records only accounted for Sh369 million.
Of further concern was the potential loss of Sh71 million in defaulted loans due to inadequate follow-up by the fund’s legal office.
The audit found that the legal office had failed to provide evidence of active recovery efforts, raising doubts about the recoverability of the funds.
The audit paints a grim picture of the Women Enterprise Fund’s financial health.
The fund reported a loss of Sh330 million during the year under review, with profitability declining by 49 percent from the previous year.
Gathungu warned that if the fund’s financial mismanagement is not addressed, it risks insolvency, which could threaten its ability to meet its financial obligations and sustain its operations.
Additional issues raised in the audit include the undisclosed income of Sh5 million earned from fixed deposits, the failure to disclose assets and property worth Sh4 million, and the failure to prepare financial statements for the fund’s loan and mortgage scheme.
The fund’s management was also criticized for excessively high employee costs, which accounted for 94 percent of revenue—well above the 35 percent threshold.
In a year marked by excessive meetings, the board of the Women Enterprise Fund held 43 meetings, which Gathungu flagged as irregular given the fund’s financial instability.
This audit has placed the fund’s management under intense scrutiny, and calls for urgent reforms are growing.
Without immediate corrective measures, there are concerns that the Women Enterprise Fund, designed to empower women’s groups, may be at risk of financial collapse, further jeopardizing the livelihoods it aims to support.
