NAIROBI, Kenya – The Public Accounts Committee (PAC) has called for a special audit of the Judiciary’s Sh6 billion mortgage scheme, which has been running for more than a decade without a legal framework despite handling billions of shillings.
PAC chair and Butere MP Tindi Mwale said on Thursday that the committee will formally request Auditor-General Nancy Gathungu to probe the scheme’s governance, disbursement criteria, beneficiaries, and compliance with the Public Finance Management (PFM) Act.
“We are talking about five billion shillings. What happens if the bank tells you, ‘We don’t have the funds, we can’t lend you for the next five to ten years’? What will you do? An MoU is a gentleman’s agreement, but we need the force of law,” Mwale said.
The fund, which began operations in 2013, was established through a 2011 Memorandum of Understanding between the Judiciary and a commercial bank.
MPs expressed concern that the scheme has since grown into a revolving fund worth Sh5.3 billion by June 2023 but continues to operate outside a clear legal framework.
Auditor-General Raises Red Flag
In her latest report, Gathungu questioned the legality of the mortgage scheme, noting that it lacked enabling legislation and that the Judiciary had failed to justify its continued operation without such a framework.
“The legality of the fund and its transactions could not be confirmed,” her report stated.
Bura MP Yaqub Adow described the matter as “a very serious issue,” equating the value of the fund to a county’s annual budget.
“This is close to Sh6 billion — that’s Tana River County’s budget. It is not pocket change,” he said.
Other MPs, including Naisula Lesuuda (Samburu West) and Maryanne Kitany (Aldai), raised questions about why only one bank was managing the fund, and whether the National Treasury had been involved in the process.
Judiciary Defends Scheme
Appearing before the watchdog, Chief Registrar of the Judiciary Winfridah Mokaya defended the initiative, saying it was launched with Exchequer seed capital and has provided affordable loans to staff since 2013.
She confirmed, however, that the scheme has only undergone two audits since its inception and admitted draft regulations were only developed in October 2024.
“We are committed to following due process in all financial dealings,” Mokaya told MPs, adding that consultations with Treasury on regulations were ongoing.
PAC reminded Judiciary officials that they remain the accounting officers and would be held responsible for any violations of public finance laws.
The committee is expected to recommend a special audit to establish the fund’s legality, identify its beneficiaries, and determine whether Treasury actions facilitated any breaches.
