Audit finds Sh53 million intended for farmers misused by Busia County staff
The scheme, meant to assist small-scale farmers, has been undermined by misuse, weak legal safeguards, and oversight failures.
Busia County is facing a potential loss of over Sh50 million after an audit uncovered that county employees posed as farmers to access unsecured loans.
The scheme, meant to assist small-scale farmers, has been undermined by misuse, weak legal safeguards, and oversight failures.
Governor Paul Otuoma was questioned by senators on Monday over irregularities in the Busia County Agricultural Development Fund, a program originally designed to provide financial support to struggling farmers.
According to the Auditor General’s report for the financial year ending June 30, 2024, the fund disbursed at least Sh53.7 million between 2016 and 2024 without any collateral, spanning the tenures of both former Governor Sospeter Ojaamong and Otuoma.
Initially, only 63 county staff admitted to receiving loans, but further review revealed 128 employees had improperly obtained Sh4.8 million from the fund.
The report highlights alleged collusion between the county executive and assembly, who are said to have diluted the Busia County Agricultural Development Fund Act, 2014, removing safeguards on security and recovery.
Governor Otuoma acknowledged the loans were issued without proper checks, attributing the problem to a “defective law” he inherited.
“The money was meant for small-scale farmers who could not get commercial loans. Initially, we thought only farmers benefited, but an audit revealed county staff were also involved,” he told the Senate committee.
He added that defaulters had been contacted and that his administration proposed amendments to strengthen the law.
Senators, however, criticised the slow pace of recovery. Machakos Senator Agnes Kavindu, along with nominated senators Raphael Chimera and Hamida Kibwana, questioned why efforts to recover the funds only began in March 2024, nearly two years into Otuoma’s leadership.
“It seems Busia is giving free money, and no one is serious about recovery,” Chimera remarked.
Busia Senator Okiya Omtatah urged immediate action against officials who approved unsecured loans, citing Article 226(5) of the Constitution, which holds public officers personally accountable for losses. “Crack the whip. Pursue both the officials and the beneficiaries,” he said.
Committee chairperson Godfrey Osotsi recommended that the county consider deducting unpaid loans directly from salaries. “Sh53.7 million is not pocket change,” he said.
The senators also raised concerns about the Busia Cooperatives Enterprise Development Fund, where 92 cooperatives received Sh106 million between 2014 and 2019 without collateral. By June 2023, only Sh39.4 million had been repaid, with Sh2.8 million recovered from defaulters.
Governor Otuoma confirmed that the county attorney had been instructed to pursue legal action to recover the remaining funds.
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