The Special Funds Accounts Committee has raised concerns over the purpose and effectiveness of the State Officers and Public Officers Motor Car Loan Scheme (SOPOMCLS).
During a meeting convened to address pending audit queries, Legislators revealed that the fund valued at Kshs. 3.8 billion, has only facilitated transactions worth Kshs. 641 million since its inception.
According to reports by the Auditor-General, the fund was dormant between 2015 and 2019, with Kshs. 3 billion sitting idle during that period.
Further analysis of audit reports uncovered an alleged accounting error where a car grants worth Kshs.9.8 million was recorded in the wrong ledger.
The scheme’s CEO, Edna Atisa, explained that the fund was established to provide car loans to state officers in the Executive and civil servants under the Public Service Commission.
She attributed the delay in the fund’s operationalization to challenges in securing a financial institution to administer the scheme.
MPs questioned the necessity of involving a financial institution that charges a 1 percent interest fee, suggesting that the fund could manage loan processing internally.
Atisa further stated that the accounting query was because the fund at its inception lacked capacity and therefore staff from the National Treasury, initially managed the fund. Members questioned the competency of the officers who had handled the matter.
Currently, Kshs. 3.4 billion of the fund is invested with the Central Bank of Kenya, generating a profit of Kshs. 533 million through government securities.
Lawmakers criticized this approach, arguing that the fund prioritizes investments over fulfilling its mandate of offering car loans to state and public officers.
“Does this Car Loan Scheme exist to provide car loans to state and public officers, or is your mandate to focus on investments while your clients are neglected?” Session-Chair, sought Kivasu.
The Committee has directed the fund’s management to reappear for further investigation of financial records leading to 2024.
In a separate meeting, the Committee examined pending audit queries linked to the Public Service Superannuation Fund.
The fund’s CEO, Dr. Jonah Aiyabei was tasked to respond to unremitted pension contributions from employers over a one-year period.
Dr. Aiyabei attributed the issue to system lags during the fund’s initial operations and assured Members that an automated system is being developed and will be operational by March 2025.
The National Treasury is required to pay a penalty in line with the fund’s regulations for the delayed remittances. The Committee directed the fund’s management to present additional evidence to support their responses to the audit query.
