Wanga put to task over bursaries, Sh50m loans

Homa Bay Governor Gladys Wanga has been put on the spot over the issuance of Sh50 million to senior county officers without securities, repayment timelines and interest.

This has led to massive default, putting millions of taxpayers’ money at risk.

It also emerged that the county failed to disburse more than Sh106 million bursaries to thousands of students.

The revelations were made during the Senate County Public Investments and Special Funds committee meeting on Monday.

The panel chaired by Vihiga Senator Godfrey Osotsi considered three funds operated by the county between 2019 and 2022. They are Bursary, Car Loan and Mortgage and Alcoholic Drinks Funds.

The committee heard that former governor Cyprian Awiti’s administration borrowed money from the Car Loan and Mortgage Fund and advanced it to senior officers, disregarding the law.

The regulations state that borrowings from the Fund by any government unit must be approved by the loans committee and the terms and purpose of borrowing must be clearly spelt out in the lending agreement

In the financial year ending June 2020 for instance, the government borrowed Sh24 million and issued the unsecured loans to top officers, without timelines for refund.

However, they did not provide documents to support the transactions including the confirmation of the balance by the beneficiaries, the terms of the loan, the interest receivable and when the recovery is due.

Auditor General Nancy Gathungu reported that the Fund did not have in its custody the title deeds and logbooks used as collateral to secure loans advanced to 26 officers.

Further, documents such as motor vehicle insurance certificates, purchase invoices or sale agreements and loan repayment schedules were not provided for audit review.

The cars were registered in the names of the loanees and not jointly - in the name of the individuals and the county as is required by law.

This is a contravention of the requirement of Regulation 9(2) of the Public Finance Management (County Executive Car Loan (Members) Scheme Fund) Regulations, 2014.

The regulation requires that jointly issued log books shall be kept in custody of the officer administering the Fund, until the loan is repaid in full.

Records also revealed that management flouted the law which requires the mortgage institution to charge security on the properties acquired through a loan from the Fund.

Gathungu also questioned how the county will recover Sh27 million in outstanding loans advanced to 13 ex-employees whose contracts were terminated in March 2019, before repayment.

Additionally, the audit shows the county failed to release Sh106 million for students' bursaries during the year under review.

“In the circumstances, the needy students and persons living with disabilities may have been denied necessary support for their education,” reads part of the report.

However, Wanga in her response said there was under-expenditure of Sh106.61 million against a budget of Sh109.18 million due to delayed disbursement of funds.

“The funds were disbursed to the department in the subsequent year which was later disbursed to the beneficiaries," she said.

The governor told the committee that getting receipts from parents after they receive the bursaries is a challenge.

“We will get the receipts,” Wanga said, adding that once schools are open, they would write to them on the same.

On the Alcoholic Drinks Fund, the report revealed that the management had not mapped all the businesses operating within the county and failed to maintain a register of all registered liquor businesses.

“It was noted that the revenue collectors were re-issued with receipt books before properly accounting for the previously issued or filled up copies,” the report reads in part.

"The management failed to maintain collection control sheets with serial numbers of receipt books for the licenses provided.”