Women Enterprise Fund risks being insolvent, Gathungu says

Women Enterprises Fund (WEF) runs the risk of being technically insolvent if it continues to generate low revenues compared to its expenditures, a qualified report of the Auditor General reveals.

According to the report for 2023/2024, WEF generated a total revenues of Ksh 398,848,406 against the total expenditure of Ksh 652,535,478 in its financial statement thereby resulting into a 49 per cent deficit or Ksh 330,089,422.

The fund was established to accelerate progress on meeting the needs of women and girls in Kenya by providing credit at a subsidised rate to the women entrepreneurs for enterprise development, building capacity of women entrepreneurs, and their organisations, and attracting and facilitating investment in micro, small, and medium enterprises oriented infrastructure.

Auditor General Nancy Gathungu disclosed in the report that the fund is replete with issues like as inaccuracies in financial statement, remarkable non-performing loans, unsupported receivables from exchange transactions, understatement of finance income and non-disclosure of inventories – all of which points out to mismanagement and misuse of public funds.

Other issues that Gathungu noted in her report included inaccuracies in cash and cash equivalents balance, unsupported and unaccounted mobile money, inaccuracies in employee costs and unsupported training expenses

The auditor general said although no provision for non-possible loans was made in the financial statements, the financial position reflected a balance of Ksh 2,510,430,962 in respect to receivable from exchange transactions which as disclosed in the financial statements, included non-performing loans balance of Ksh 71,330,000 from financial intermediary partners.

It further reported that whereas Ksh 71,060,851 was disclosed in the financial statements as income, a review of financial records revealed that the fund had earned Ksh5,366,810 as interest from fixed deposits, which had not been disclosed as part of the financial income.

“In this circumstance, the accuracy and completeness of the finances income amount of Ksh 71,060,851 could not be confirmed,” the report said.

Regarding the inaccuracies in cash and cash equivalents balance, the report revealed that Ksh 1,815,567,600 in the financial statements, including a balance of Ksh 1,645,751,217 for WEF main account.

However, the respective bank reconciliation statement for June 2024 reflected unpresented cheques relating to payments in the cashbook amounting to Ksh 2,876,624 not reflected in the bank statement.