Another Kusco-Like Theft of Sacco Savings Discovered at Energy Sacco

In Summary

• The Auditor General's report has exposed massive misuse of county funds, including payments for undelivered equipment, stalled projects, unjustified foreign trips, and questionable procurements.
• Public Service and Human Capital Development CS Justin Muturi disclosed that budget constraints are preventing the commercialisation of the National Youth Service (NYS) as directed by President Ruto.
• ACA officers seized 19,000 counterfeit fertiliser bags in Nairobi’s Kariokor area, arresting a suspect and preventing a potential Ksh57 million fraud that could have affected farmers and food security.
• The Ministry of Health is seeking funds to settle Ksh30 billion owed to private hospitals under NHIF, as service providers demand urgent payment and senators question the government's handling of the issue.
• Nairobi County and Kenya Power have resolved their Ksh4.8 billion dispute after high-level talks, agreeing to restore services and handle future conflicts amicably.

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A forensic audit has exposed a fraudulent scheme at Energy Sacco, where staff and members colluded to embezzle Ksh82.36 million through ghost shareholding, fictitious loans, and manipulated financial records.The Eastleigh Voice reports that the scheme involved creating fake shares to inflate contributions, allowing members to access loans beyond permitted limits. Some members secured loans up to 10 times the allowed limit, while others had their records backdated to meet eligibility requirements. The fraud, which took place between 2016 and 2021, was uncovered by forensic auditors who later sued the Sacco for unpaid investigative fees. The report revealed suspicious banking transactions, including Ksh5.1 million paid into one account under 11 different names. Energy Sacco, which had kept the loss undisclosed, is now facing scrutiny as concerns grow over financial mismanagement in Kenya’s Sacco sector.

In a report by The People’s Daily, Public Service and Human Capital Development CS Justin Muturi revealed that budget constraints hinder the implementation of President Ruto's directive to commercialise the National Youth Service (NYS). The ministry needs Ksh26.48 billion but has only been allocated Ksh11.18 billion. This shortfall affects the recruitment of 20,000 additional recruits and the development of NYS Commercial Enterprises. The Attorney General's office proposes making NYS a parastatal, conflicting with the President's vision for a self-sustaining, commercially-driven NYS. NYS Commandant General James Tembur also highlighted that the current budget can only accommodate 10,000 recruits for FY 2024/2025. This shortfall poses a significant challenge to achieving the President's ambitious targets. 

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The long-standing dispute between Nairobi City County Government (NCCG) and Kenya Power (KPLC) has been resolved after a meeting led by Head of Public Service Felix Koskei, bringing together Governor Johnson Sakaja and Energy CS Opiyo Wandayi. According to Capital News, the standoff, which involved a Ksh4.8 billion wayleave claim by City Hall, had led to service disruptions, including blocked access to KPLC premises and water supply cuts. Both parties agreed to verify outstanding claims, restore normal operations, and handle future disputes amicably. Additionally, they pledged to comply with development regulations under the Physical and Land Use Planning Act (PLUPA) 2019.

The Ministry of Health is negotiating with the National Treasury and President William Ruto to clear Ksh30 billion owed to private hospitals under NHIF, with Health CS Dr Deborah Barasa assuring service providers that payments will be honoured. The Rural and Urban Private Health Association (RUPHA) has raised concerns over potential job losses and delays in debt reconciliation amid ongoing staff layoffs at NHIF. As reported by The People’s Daily, senators questioned the ministry’s handling of the situation, with some accusing the CS of sidelining the Senate despite health being a devolved function. The government has so far spent Ksh20.9 billion on Social Health Authority (SHA) claims since its launch in October 2024, but hospitals insist on a structured payment plan to clear the debt. 

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Officers from the Anti-Counterfeit Authority (ACA) have seized over 19,000 counterfeit fertiliser bags in Nairobi’s Kariokor area. Acting on a tip-off, ACA officers arrested a suspect found repackaging used Yara-branded bags with fake fertiliser. The illegal scheme, traced back to Athi River, could have led to a loss of Ksh57 million if the fake fertiliser had reached farmers. ACA’s Nairobi Regional Manager, Abdi Abikar, highlighted the danger of counterfeit fertiliser, linking it to low crop yields and food insecurity. Investigations are ongoing to track down the syndicate’s ringleader, with ACA promising more crackdowns to protect farmers from such scams, as reported bt The People’s Daily. 

A new audit report by Auditor General Nancy Gathungu has exposed large-scale misuse of public funds by county governments, raising concerns over accountability. The report highlights questionable expenditures, including Kilifi County’s Ksh75.9 million payment for a CT scan machine that was never delivered, Tana River’s Ksh6.4 million spent on foreign travel without proper documentation, and Wajir’s Ksh9.3 million generator repair cost, which could have bought a new one.  The Standard reports that other flagged expenditures include Marsabit County’s costly foreign trips, Samburu’s Ksh3 million mobile phone and laptop purchases without records, and Nairobi’s Dishi na County Programme over irregular payments. The Auditor General has urged better oversight to prevent continued wastage of taxpayer money.

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