Audit unveils over Sh1.4 billion mismanaged at Women Enterprise Fund

A recent audit report by Auditor General Nancy Gathungu has exposed alarming financial irregularities at the Women Enterprise Fund, totalling Sh1.4 billion.

The report, released for the financial year ending June 30, 2024, paints a disturbing picture of poor financial management, with large sums of money unaccounted for, unauthorised transactions, and unexplained variances in the fund’s records.

The findings have raised serious concerns about the fund’s ability to meet its financial obligations and sustain its operations in the future.

One of the most significant findings in the audit is the Sh212 million that passed through unauthorised mobile pay bills.

Despite directives from the government to channel all payments through a centralised system, the fund continued to use multiple pay bills, leading to unaccounted funds.

“In the circumstances, the mobile money balances of Sh212 million could not be accounted for,” Gathungu commented in her report.

The funds should have been moved to a single, government-approved pay bill by August 2023, but this directive was ignored.

Adding to the financial mess, Sh34 million was paid out as a gratuity without supporting documentation.

“In the circumstances, the accuracy and completeness of the gratuity payments could not be confirmed,” the Auditor General stated.

The missing records raise serious doubts about the legitimacy of these payments, leaving taxpayers and other stakeholders with unanswered questions.

The audit also found discrepancies in the fund’s general ledger and financial statements, with Sh1.2 billion in unexplained variances.

This includes mismatches in travel expenses, board costs, and loan amounts disbursed to women’s groups.

For instance, while the fund reported Sh68 million spent on computer maintenance, only Sh9 million was recorded in the ledger. The discrepancy between the financial statements and the ledger casts doubt on the overall accuracy of the fund’s financial reporting.

Perhaps most concerning is the growing financial instability at the Women Enterprise Fund. According to the audit, the fund reported losses totalling Sh330 million for the year under review, a steep decline in profitability from Sh220 million the previous year.

The fund’s current financial situation is unsustainable, and the Auditor General has warned that the fund may soon face insolvency.

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“The fund continued to operate at a loss which, if not managed, may affect its future operations and sustainability of services,” Gathungu remarked.

The audit also highlighted that Sh678 million was missing from the fund’s ledger, with no explanation for the missing amount.

Furthermore, the fund’s legal office failed to provide evidence that it was actively pursuing the recovery of Sh71 million in defaulted loans.

“The recoverability of the Sh71.3 million couldn’t be confirmed,” the report reads, raising concerns about the effectiveness of the fund’s loan recovery efforts.

In addition to these financial challenges, the audit uncovered a failure to disclose Sh5 million in income from fixed deposits and Sh4 million in assets.

Management has also been criticised for failing to prepare financial statements for the fund’s loan and mortgage schemes, further compounding the financial mismanagement issues.

Given the mounting losses, lack of accountability, and failure to comply with government directives, the Women Enterprise Fund’s future remains uncertain.