Auditor General Nancy Gathungu has flagged Uwezo Fund for not producing records showing the people who owe the kitty Sh4.64 billion.
In her report for the year ended June 30, 2021, Gathungu said there were no debtors’ ledgers detailing loans issued by the fund since inception and repayments made over the years on account of loan recoveries.
“There were no comprehensive loan listings or aging analysis in support of the loans. In the circumstances, the accuracy and completeness of the reported receivables—outstanding balance of Sh4,640,480,509 could not be confirmed,” the report said.
Uwezo Fund is a flagship programme aimed at enabling women, youth and persons with disabilities access loans to promote businesses and enterprises at the constituency level.
It seeks to enhance economic growth towards the realisation of Vision 2030 and the Sustainable Development Goals No.1 (eradication of extreme poverty and hunger) and 3 (promotion gender equality and empower women).
The fund is highly devolved and adopted the concept of bottom-up approach with decision making done at the grassroot level.
It was established vide Legal Notice No. 21 of 21st February, 2014 – Public Finance Management (Uwezo Fund) Regulations, 2014 and was launched in September 2013.
Since inception, the fund has disbursed more than Sh6.95 billion and directly supported 1,088,757 beneficiaries of which 69 per cent are female and 31 per cent male through provision of affordable and accessible credit, capacity building on entrepreneurship skills, basics on book keeping and market linkages and networking.
The kitty envisions an equitable social-economic transformation of youth, women and persons with disabilities.
In her report, Gathungu said a review of records maintained at sampled constituency Uwezo Fund offices revealed internal control weaknesses.
The report said failure to institute measures for effective follow up of beneficiaries of the kitty lead to high loan defaulters.
“The records further revealed deficiency in documentation, authorisation and approval of loans to prevent irregular loans. Individual loan accounts and details of loans beneficiaries were not maintained in Muhoroni and Khwisero constituencies. Further, some groups were given loans yet there was no evidence of approvals and completed application forms,” it stated.
“In the view of the above, the effective management and recoverability of the loans may not be achieved. This raises doubt on the internal controls put in place to implement the activities of the fund to achieve the intended purpose.
Gathungu further said the statement of financial performance reflected constituencies’ administration costs of Sh173.1 million.
“However, out of the 290 constituencies, only 213 submitted their respective expenditure returns totalling Sh130.4 million, leaving a balance of Sh42.6 million in respect to 77 constituencies which was not supported by comprehensive expenditure returns,” the report said.
The report further said various prior year audit issues remained unresolved as at June 30, 2021. “Management has not provided reasons for the delay in resolving the prior year audit issues,” it said. BY THE STAR