The auditor general has revealed that fifteen senior state officials are failing to manage their 380 million shillings mortgages.
Nancy Gathungu said an audit of the State Housing Mortgage Scheme Fund revealed that the debts of 15 officers had not been repaid and there had been accumulated debt of 15.6 million shillings.
The state established the Fund in 2015 to finance affordable mortgage loans of up to 40 million shillings per state employee.
The main beneficiaries of the affordable home loans are the Cabinet Secretary, the Governor, the Attorney General, the Cabinet Secretary, and the Chief of Defense Forces, each of whom is eligible for a home loan of up to 40 million shillings.
Currently, there are 22 Cabinet Ministers, Justice Ministers, and Cabinet Ministers. The report for the year to June 2021 casts doubt on the recoverability of Sh379,774,630 and the debt of Sh15,601,855 included in the long-term mortgages.
Ms. Gathungu said in a report to Parliament that the State Mortgage Scheme Fund's report on the financial position reflects a balance of 2.96 billion shillings in long-term receivables from foreign exchange transactions. (mortgage receivables) as of June 30, 2022.
“However, a review of loan records shows that loans for Sh 379,774,630 owed to fifteen (15) individuals remain unpaid and have accumulated a debt of Sh 15,601,855 since June 30, 2021,” Ms. Gathungu said.
She said no evidence of the Fund management's actions to recover the loans was provided for audit review. Furthermore, Ms. Gathungu said there is no provision for bad debt on mortgages. “Under these circumstances, the recoverability of the loans amounted to 379,774,630 shillings, and the debt of 15,601,855 shillings included in the balance of long-term receivables of 2,962,606,855 shillings as of June 30, 2021. , n 'cannot be confirmed', Ms. Gathungu said in her report.
The loans cost senior officials only a fraction of prevailing market rates, up to 12.39% for the majority of Kenyans who borrow from commercial banks.
As a rule, key secretaries, independent committee members, and independent office holders (budget controller and auditor general) are entitled to a home loan of up to 35 million shillings each.
Loans are repaid within 20 years or before the borrower turns 70.
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