KUSCCO Scandal: KSh 12B Fraud Puts SACCO Housing at Risk

• A forensic audit by PricewaterhouseCoopers (PwC) has uncovered widespread fraud.
• One of the most alarming findings in the report is that financial statements were signed by a deceased auditor, indicating clear evidence of forgery.
• Beyond the immediate financial crisis, this scandal poses a significant threat to SACCO members who rely on KUSCCO’s housing arm for home financing.

The Kenya Union of Savings and Credit Cooperatives (KUSCCO), a key player in SACCO-backed homeownership initiatives, is at the centre of a financial scandal that has sent shockwaves across the cooperative sector. A forensic audit by PricewaterhouseCoopers (PwC) has uncovered widespread fraud, including document forgery and financial misstatements, with losses exceeding KSh 12 billion.

One of the most alarming findings in the report is that financial statements were signed by a deceased auditor, indicating clear evidence of forgery. The audit also revealed manipulated financial records, unauthorised loans, and unaccounted cash withdrawals, exposing deep-seated mismanagement by top executives who were dismissed in May 2024.

Beyond the immediate financial crisis, this scandal poses a significant threat to SACCO members who rely on KUSCCO’s housing arm for home financing. Many aspiring homeowners depend on cooperative-backed loans to purchase land and build houses, a process now in jeopardy due to the organization’s financial instability.

Cooperatives Cabinet Secretary Wycliffe Oparanya, upon receiving the audit report, condemned the financial mismanagement and assured that investigations would extend to other SACCOs suspected of similar malpractice. “There are other cases that we are going to bring before our security officers, especially our investigating agencies, involving other saccos that have been going under financial problems because of the suspected mismanagement.” 

With the scandal gaining momentum, the government has handed over the case to law enforcement for a full-scale investigation and potential legal proceedings. Speaking at a press briefing, Inspector General of Police Douglas Kanja vowed swift action against those responsible, stating “We are going to leave no stone unturned. Anyone involved in the mismanagement of members’ money will face the full force of the law.”  

Following these damning findings, the government has taken decisive action by halting KUSCCO’s financial operations, a decision that will greatly impact members in the housing finance program. The organization will now focus solely on advocacy and training as authorities work on a restructuring plan to rebuild trust and ensure compliance with financial regulations.

As investigations continue, SACCO members and stakeholders are calling for tighter oversight and stronger governance frameworks to prevent such financial mismanagement in the future.

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