Charles Kilibo, an auditor in Felbright and Company Auditors while presenting their audit findings indicated that they have established that the SACCO had been wrecked by serious governance weaknesses that created room for fraud and other habits of financial mismanagement.
Masaka Elders Savings and Credit Cooperative Society - SACCO Limited has lost at least 399.7 million shillings to fraud, a special
financial audit has revealed.
An audit report by Felbright and Company auditors read before the SACCO’s
special general meeting convened in Masaka has revealed that the microfinance institution
lost the money between January 2016 and May this year.
The audit was prompted by a petition by a section of SACCO delegates to
the Ministry of Industries and Cooperatives, in which they complained of suspicious
financial mismanagement and manipulation of internal controls by the current
board of directors.
Charles Kilibo, an auditor in Felbright and Company Auditors while presenting
their audit findings on Monday indicated that they have established that the SACCO had
been wrecked by serious governance weaknesses that created room for fraud and
other habits of financial mismanagement.
He says that the SACCO was found to have been operating with a weak and
divided board of directors who were also rocked in leadership struggles, hence
the failure to secure members’ savings.
Kilibo explains that the money was lost to irregular transactions by
SACCO board members and staff, high default rate and uncoordinated loans' approvals
and other suspicious cash transfers from the institution’s accounts.
//Cue in: “for the
period……Cue out: ……committee
The audit report has also indicated that at least 75 million shillings was
also lost through Mobile money transaction debtor and some unscrupulous SACCO
staff who were trusted to service members’ loans.
Kilibo explains that they established that many people were paying
their loans through mobile money accounts of some staff who however could not transmit
the monies to SACCO accounts.
//Cue in; “we
found that…..Cue out; ……members’
The report has made recommendations to the Registrar of Cooperatives at
the Ministry of Industry at Cooperatives to hold the implicated board members
and management staff individually accountable for the money that was lost.
The auditors also recommended for immediate suspension of the SACCO
board of directors and staff implicated in the report until the money is fully
But Margret Ntambaazi, the current SACCO board of directors’ chairperson
has denied participating in the said fraud, arguing that they inherited some of
these problem from the previous leadership.