•She said eight financial intermediary partners had not been servicing loans totalling Sh71.3 million.
•According to the report, no specific provisions by way of bad debt adjustments have been made in the financial statements to recognise the impairment.
Image: CHARLENE MALWA
Auditor General Nancy Gathungu has raised concerns over the Sh3.26 billion loaned out to women entrepreneurs that have been outstanding for more than a year.
In her report for the year ended 30 June 2021, Gathungu said the Woman Enterprise Fund (WEF) received Sh3.63 billion out of which Sh3.26 billion was given to women through the Constituency Women Enterprise Scheme.
“Although the fund made a general provision for doubtful debts of one per cent in line with its credit policy and guidelines, its adequacy cannot be confirmed,” the report said.
The scheme is a channel through which WEF disburses funds to women entrepreneurs.
Gathungu flagged the fund’s non-performing loans to financial intermediaries.
She said eight financial intermediary partners had not been servicing loans totalling Sh71.3 million.
“There are ongoing court cases between the fund and the intermediaries which indicate the loans may be recovered in full. There are no collaterals to support an advance of Sh60 million to two financial intermediaries who have failed to service the loans,” she said.
According to the report, no specific provisions by way of bad debt adjustments have been made in the financial statements to recognise the impairment.
WEF was a strategic move by the government towards addressing poverty alleviation through the socio-economic empowerment of women.
It provides funding to women aged at least 18 years, who must have the intention of investing in income-generating activities, and who already belong to appropriately registered groups that must have been in existence for three months.
It is a semi-autonomous government agency in the Ministry of Public Service established in August 2007.
The report said Sh14.96 million was given out in loans to finance Local Purchase Orders and were dues but not paid as of 30 June 2021.
The reports said Sh12.25 million of the Sh14.96 million has been outstanding for more than one year contrary to the policy of the fund.
“Recoverability of these loans is doubtful since they have been in arrears beyond their respective repayment periods as stipulated in the loan agreements,” it said.
Local Purchase Order Financing is a product offered by WEF to serve women by increasing their capacity to respond and adequately service tenders thus meeting supply requirements.
The loan is available to individual women owning enterprises or women-owned companies
Gathungu flagged unsupported taxi services under general expenses. She said expenditure of Sh21.7 million was incurred in respect of travel, conferences and accommodation.
“Review of records revealed expenditure totalling to Sh1,735,400 in respect to travel, conferences and accommodation were not supported with user requisition, approval and taxi receipts,” she said.
“In the circumstances, the validity and completeness of the expenditure totalling Sh21,789,005 on travel, conference and accommodation could not be confirmed”
She cited Sh2.8 million paid as allowances to volunteers engaged by the fund during the year under review.
Gathungu said the payments were not approved by the Salaries and Remuneration Commission.
“The management did not provide justification and the basis for paying the extraneous allowance in addition to the monthly stipends to volunteers who are not staff of the fund or on permanent and pensionable terms of employment,” she said.
Edited by Kiilu Damaris