Hustler Fund Mismanagement Flagged By Kenya’s Auditor General
The government has responded to Auditor General Dr. Nancy Gathungu’s findings regarding the Financial Inclusion Fund (Hustler Fund).
They attributed the problems to data extraction errors, understaffing in the secretariat during the fund’s inception, and errors in note numbering.
Dr. Gathungu issued a disclaimer, citing inconsistencies in the fund’s management.
She stated that Hustler Fund Management failed to provide financial statements for audit review, preventing verification of the source and authenticity of the balances.
This omission highlighted significant gaps in the fund’s transparency and accountability measures.
Billions of taxpayers’ money is at stake at the Hustler Fund, it has emerged, with the Auditor General unearthing major irregularities in what was arguably President William Ruto’s biggest campaign plank.
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In her detailed report, the Auditor General raised concerns about the recovery process from exchange transactions.
Her analysis revealed that 17,855,858 beneficiaries applied for loans, totaling Ksh 32,015,962,276.
However, a significant balance of Ksh 10,950,075,614 remained unpaid as of June 2023, which included interest receivable and loans outstanding.
Dr. Gathungu also examined balances from multiple bank accounts and mobile network operators linked to the fund.
She discovered that Ksh 259,026,553 held by service providers could not be verified due to insufficient documentation provided by the fund’s management.
Furthermore, the Auditor General discovered discrepancies in the disclosure of bank account signatories and their specimen signatures, which were critical to the audit review process.
These lapses made it even more difficult to validate the Hustler Fund’s financial activities.
Further investigation revealed that the fund’s loan disbursements exceeded its permitted limits.
Dr. Gathungu identified 238,707 cases in which loans totaling Ksh 420,312,323 were issued, exceeding the original limit by Ksh 219,615,242.
Among the recipients were 5,070 people who were ineligible for loans under the fund’s rules.
The report also described how 11,213 borrowers received additional loans totaling Ksh 161,931,703 before fully repaying their previous obligations.
Furthermore, Dr. Gathungu identified 129,315 closed accounts totaling Ksh 81,622,289 in loan repayments that could not be traced, indicating inadequate tracking and accountability measures.
Furthermore, the Auditor General discovered 867 instances of duplicate loan identity numbers, resulting in 1,978 loans totaling Ksh 477,928.
This finding exposed systemic flaws in the fund’s loan management system configuration and oversight.
In response to these revelations, the Ministry of Cooperatives and MSMEs acknowledged several challenges faced by the fund at its inception, including understaffing, errors in note numbering, data extraction issues, missing data dumps, and overall extraction challenges.
These factors contributed to the Hustler Fund’s operational challenges, as described in the Auditor General’s report.
Dr. Gathungu’s findings call into question the integrity and effectiveness of one of President William Ruto’s flagship projects.
What was once hailed as a key initiative is now under scrutiny, with the possibility that it will turn into yet another scandal for the administration.
Hustler Fund Mismanagement Flagged By Kenya’s Auditor General
