Metropolitan Sacco Bosses Down Their Tools Ahead of Books Audit

At least five top managers of the troubled Metropolitan National Sacco Ltd have resigned to pave the way for deeper investigations after a government audit revealed massive irregularities.

The exits came days after the Sacco’s board was sacked and replaced with a caretaker committee last week following damning findings of an inquiry ordered by Commissioner of Co-operatives David Obonyo in April.

Questionable transactions, including Sh49 million in M-Pesa transfers by a single teller at the Sacco’s Nakuru branch and an overstatement of the institution’s premier loan facility by an excess of Sh7 billion due to suspected disbursements to non-existent members, are some of the malpractices that were exposed.

The audit further revealed that the management of the sacco, which draws its membership from teachers and civil servants, hoodwinked members with false dividend payments despite non-existent surplus reserves from which such disbursements are made.

The fake dividends were paid out of the members’ savings. The management could also not explain why its cumulative assets were stated as Sh28 billion yet the external auditors had established that they were slightly above Sh14 billion.

Additionally, the audit revealed that some Sh 490 million non-performing loans were irregularly dished out to its employees while its branches in Kiambu, Thika and Kisumu could not account for funds totalling Sh 176.9 million.

Following the damning findings, the audit recommended the disbandment of the board, investigation of the Nakuru branch teller and that the officers who falsified the loan book be held accountable.

It was also recommended that all the current and former staff holding non-performing loans be investigated and the amounts recovered. 

In addition, the auditors suggested a freeze on further investments in non-core business by the Sacco and that all loss-making branches be closed. 

The Sacco has eight branches and 15 satellite ones, but only two – Kiambu and Koinange – are profitable.

Sacco Societies Regulatory Authority chief executive Peter Njuguna last week told the Nation the caretaker committee will draft a plan to implement the recommendations “within 90 days starting Saturday”.