A parliamentary committee has raised the alarm over the management of the Cooperative Societies Liquidation Fund, questioning how billions of shillings may have been handled for years without a clear governance structure.
This follows revelations that thousands of civil servants, who retired after decades of saving through SACCOs, have been left empty-handed to date.
During a session held at Parliament Buildings on Tuesday, the Special Funds Accounts Committee summoned officials from the State Department for Co-operatives and directed them to submit all pending audit documents to the Auditor-General within 14 days.
The session, chaired by Fatuma Zainab (Migori Woman Representative), revealed that the Liquidation Fund, which is responsible for winding up failed SACCOs, has been operating without a Chief Executive Officer or a Board. It is currently being managed under the audit section of the Commissioner’s office.
Kivasu Nzioka (Mbooni) requested details on the number of SACCOs in the country, while Tom Odege (Nyatike) cast doubt on their long-term viability, citing civil servants who retired after decades of saving, only to walk away empty-handed to this day.
Principal Secretary Patrick Kilemi, appearing before the committee, defended the sector, stating that Kenya hosts over 7,000 financial cooperatives, ranking first in Africa and sixth globally. “SACCOs finance 65 per cent of school fees in this country,” he said, highlighting their key role in housing, education, transport, and investment.
He added that efforts were underway to strengthen governance through legislative reforms and new insurance regulations.
“Are these really funds? There is a structure stipulating what it takes to constitute a fund,” PS Kilemi told the lawmakers, admitting that the setup may not meet legal thresholds for fund governance.
MPs raised concerns that the absence of a formal structure exposes the fund to financial mismanagement, especially given its mandate to protect the lifetime savings of SACCO members.
Further scrutiny revealed that the fund failed to maintain separate financial accounts between 2004 and 2012, a nine-year gap that sparked outrage among members.
Mary Emaase (Teso South) criticised the delay in submitting audited financials, blaming weak oversight and a lack of professionalism in the audit and finance departments. “Public money must be accounted for. We cannot allow institutions to run on autopilot,” she said.
The committee also flagged the Management Supervision Fund, mandated to oversee SACCO performance, for tabling only partial documentation, prompting renewed calls for transparency.
Chairperson Zainab directed the PS to present all outstanding records within two weeks, stressing that the legitimacy and financial integrity of the fund must be upheld. “We must uphold transparency and safeguard public funds,” she stated.
The committee will table its findings and recommendations in the National Assembly, potentially triggering renewed scrutiny of SACCO governance across the country amid ongoing concerns over mismanagement.
