The Sacco Societies Regulatory Authority (SASRA) has issued a circular reminding external auditors of regulated SACCOs to comply fully with reporting obligations under Section 44(3) of the Sacco Societies Act 2008, and the accompanying regulations. The circular, dated 16th October 2025, underscores SASRA’s growing resolve to enforce accountability and transparency within Kenya’s cooperative financial sector, which continues to play a vital role in the country’s economic landscape.
The directive follows concerns that several auditors and audit firms, appointed to review the books of regulated SACCOs for the financial year ended December 2024 failed or neglected to submit the statutory reports required by law. These reports are crucial because they provide SASRA with an independent assessment of a SACCO’s financial condition, solvency, internal controls and compliance with prudential standards. They also help detect early signs of mismanagement, fraud or regulatory breaches that could endanger members’ savings.
Under the law, every external auditor must within four months of the close of SACCO’s financial year, submit to SASRA a report detailing the institution’s solvency, financial condition and any irregularities or violations observed. The circular reminds auditors that this is not a formality but a statutory duty, essential to maintaining the stability and integrity of the SACCO system. By reinforcing this requirement, SASRA aims to ensure that regulated SACCOs continue to operate transparently and in the best interests of their members.
In the circular, SASRA warns that failure by auditors or audit firms to submit the statutory report within the prescribed timelines will result in permanent removal from the Annual List of Registered and Approved External Auditors. This list determines which firms are eligible to audit regulated SACCOs and removal from it, effectively disqualifies an auditor from participating in any SACCO audit work in the future. The regulator further notes that the directive is issued without prejudice to any ongoing or future disciplinary action against non-compliant auditors, making it clear that enforcement measures will be swift and uncompromising.
The circular also copies the Chief Executive Officer of the Institute of Certified Public Accountants of Kenya (ICPAK), highlighting SASRA’s intent to work closely with the professional body in strengthening audit standards and discipline. This collaboration reflects a broader regulatory shift toward holding auditors individually accountable for compliance lapses, ensuring that both SACCO management and their external reviewers meet the highest standards of professional integrity.
This move carries significant implications for the cooperative financial ecosystem. The SACCO sector now controls assets exceeding KES 1.0 trillion, making it a crucial pillar of Kenya’s financial system. The integrity of audits within this space directly affects public confidence, investor trust and the overall perception of governance within member-based financial institutions. By tightening oversight and emphasizing timely statutory reporting, SASRA is aligning the cooperative sector with global best practices in financial supervision and accountability.
SASRA’s latest circular therefore represents more than a compliance reminder, it marks a decisive shift towards stricter regulatory enforcement. By demanding transparency and threatening deregistration for errant auditors, the Authority sends a clear message that accountability is non-negotiable. For investors, SACCO members and the broader financial community, this is a welcome step towards a more transparent, resilient and professionally governed cooperative sector.
