State Department For Co-Operatives Given 14-Day Ultimatum Over Audit Gaps In Key Cooperative Funds

The State Department for Co-operatives has been given 14 days to submit missing audit documents for two critical cooperative funds—the Cooperative Societies Liquidation Fund and the Management Supervision Fund—after glaring gaps in their governance and financial oversight were raised by Parliament.

This directive came from the Special Funds Accounts Committee, chaired by Migori MP Fatuma Zainab, during a session with Principal Secretary for Co-operatives, Patrick Kilemi.

The committee flagged serious concerns regarding the management of the funds, which are intended to oversee the supervision and dissolution of struggling cooperative societies.

The legislators expressed alarm over the absence of proper leadership structures, with PS Kilemi confirming that the funds currently lack a Chief Executive Officer and Board, and are instead being managed under the audit section of the Commissioner’s office.

“Are these really funds?” PS Kilemi asked during the session, adding that it was up to the committee to determine whether the existing arrangements met the legal threshold for fund management.

Defending the sector, Kilemi highlighted Kenya’s prominent position in cooperative development, noting that the country has over 7,000 financial cooperatives and ranks first in Africa and sixth globally.

“SACCOs finance 65 percent of school fees in this country,” he said, pointing to the central role they play in education, housing, transport, and investment.

He also informed the committee that the government was working on reforms to strengthen oversight, including legislative changes and the introduction of insurance regulations for SACCOs.

However, the partial documentation presented to the committee on the Management Supervision Fund was deemed insufficient. Chairperson Fatuma Zainab ordered the PS to submit the complete records within two weeks.

“We must uphold transparency and safeguard public funds,” she said.