A recent audit of the Kenya Union of Savings & Credit Co-operatives (Kuscco) has revealed extensive financial mismanagement, exposing large-scale theft, bribery, and fraudulent financial reporting. According to the audit findings, the institution has suffered losses amounting to KES 13.3 billion, rendering it insolvent.
The forensic investigation uncovered systematic financial misconduct, including the falsification of financial statements, unauthorized bank withdrawals, and conflicts of interest in contract issuance. “The 2022 financial statements were allegedly forged as the signatures of the 2021 and 2022 audited financial statements differ, despite the signing partner being CPA Alfred Basweti of Omenye and Associates,” stated the PwC audit report.
The audit also implicated at least 23 senior Kuscco officials, with eight executives facing direct scrutiny. Among them were the then managing director George Ototo, finance manager George Owino, and chairman George Magutu. Evidence gathered from emails, computer logs, and M-Pesa statements confirmed fraudulent financial activities within the institution.
One of the most alarming revelations was that CPA Alfred Basweti, the purported signatory of the 2022 financial statements, had passed away before they were signed. “Kenneth Kimaiyo, the former internal auditor, informed us that CPA Alfred Basweti had died before the signing of the Kuscco 2022 financials,” the audit noted.
The financial irregularities at Kuscco have put deposits from 247 Saccos at risk, totaling KES 24.8 billion. Of this, KES 12.5 billion is currently unaccounted for. The scale of the fraud has prompted calls for increased regulatory oversight. Authorities have indicated that new measures will be introduced to ensure stricter financial governance within the cooperative sector.
This case adds Kuscco to a growing list of financial institutions that have suffered from internal fraud, raising concerns over the effectiveness of current regulatory frameworks. As investigations continue, affected Saccos and stakeholders await further action from law enforcement and regulatory bodies.
