Auditor General Nancy Gathungu has exposed financial mismanagement amounting to Sh1.4 billion at the Women Enterprise Fund, raising red flags on the fund’s accountability and sustainability. In a damning audit for the year ending June 30, 2024, Gathungu issued an adverse opinion, highlighting unexplained transactions, inflated expenses, and poor financial reporting.
Among the key findings was Sh212 million transacted through unauthorized mobile paybills that remains unaccounted for. The fund had operated three mobile paybills for loan repayments and disbursements to women’s groups, in violation of an Executive Order issued in August 2023 that required all government transactions to be consolidated through a single paybill number, 222222. Despite this directive, the fund board irregularly recommended the transfer of the funds to the main account for call deposits.
Additionally, Sh34 million was paid as gratuities without proper documentation, while another Sh20 million transferred from a paybill account lacked a traceable destination. Financial inconsistencies were rampant, with variances totaling Sh1.2 billion across multiple expenditure lines. Travel expenses had a Sh70 million discrepancy, board costs differed by Sh29 million, and computer maintenance expenses showed a questionable gap of Sh59 million between financial statements and the general ledger.
The audit also raised concerns about loan recoveries, with Sh71 million in defaulted loans lacking evidence of follow-up by the legal office. Moreover, the fund failed to disclose interest income of Sh5 million and assets worth Sh4 million. Payroll figures differed by Sh5 million, and staff costs represented a staggering 94 percent of revenue, far exceeding the recommended 35 percent.
The fund’s financial health is also under threat, with losses ballooning to Sh330 million, marking a 49 percent decline in profitability compared to the previous year. Gathungu warned that the fund risks insolvency if these issues are not addressed.
The audit paints a picture of a fund plagued by mismanagement, poor oversight, and non-compliance, potentially jeopardizing its ability to support women’s empowerment initiatives across Kenya.
