Kisii county risks losing Sh186 million after the county assembly advanced the cash to MCAs as car and housing loans without any form of security.
Auditor General Edward Ouko has revealed that the MCAs approved the car and mortgage loans without putting in place mechanisms for recovering the money.
According to the auditor, the fund did not have a charge register in place and the securities provided such as logbooks and title deeds were not charged to the loans as prescribed in the fund’s regulations.
“A review of an application for housing loans revealed that the applications for loans amounting to Sh186 million were not adequately supported with relevant documents such as approved copies of the designs of the proposed structure, bills of quantities and official search of the titles to confirm ownership,” the report reads.
The 2017-18 report on Car and Mortgage Schemes by the Kisii county assembly was tabled in the Senate on Tuesday.
“These documents were not presented to the committee prior to the approval and disbursement of the loans. Consequently, the regularity and recoverability of the loans advanced to the members in case of the default could not be ascertained,” it reads further.
Ouko disclosed the management had authorised the disbursement of the loans to the MCAs without obtaining valuation reports in order to determine the actual value of cars and properties to be financed when compared.
Further, the auditor indicted the assembly over an outstanding loan facility of Sh47 million from Chase Bank Limited for the Car Loan and Mortgage Fund Scheme.
The loan was taken without the approval of the county assembly, contrary to the Kisii County Assembly Car Loan and Mortgage Fund Act, 2014.
“No satisfactory explanation was provided for the omission,” Ouko said in the report.
Edited by R.Wamochie
