More than Sh2.5 billion, that various youth groups were loaned by the government to set up startups, may go down the drain, Auditor General Nancy Gathungu has warned. In a new report following a review of the
Youth Enterprise Development Fund accounts, the auditor revealed that some of the debts have not been paid for over three years.
“A review of records revealed six loan categories with an amount of Sh2,463,644,828 had not been serviced for a period of more than three years,” Gathungu said.
As of June 2022, the fund had disbursed over Sh14.2 billion in loans to 2 million youths.
The auditor has also ruled as inadequate, an allocation of Sh395 million that the fund management set aside for bad and doubtful debts.
“Further, management did not explain the actions being taken to recover the long outstanding amounts,” the auditor general reported.
YEDF managers have been rapped over loan repayments amounting to Sh66 million from unidentified borrowers.
The report reveals that some of the said borrowers have not been identified for more than three years since a similar query was raised.
“Management did not explain why reconciliations were not done in order to update and allocate borrowers accounts which could lead to misstatement of receivables from exchange transactions balance,” Gathungu said.
The auditor has also cast doubt on some Sh180 million, which was irregularly paid to a company from the fund for an ICT contract.
The Public Investments Committee (12th Parliament) established that the payment was irregular and benefited, among others, top guns at the fund.
The concerned company and its directors were convicted for conspiracy to commit an economic crime. Other charges upheld by the courts included unlawful acquisition of public property and falsifying documents.
Gathungu says during her review for the period to June 30, 2023, it was established there was no evidence to indicate that the amount would be repaid.
“Its recoverability is, therefore, doubtful. In addition, there was no provision made for bad and doubtful debts in respect of this amount,” the report reads in part.
“In the circumstances, the accuracy and completeness of the receivables from exchange transactions balance of Sh180,363,789 could not be confirmed.
