Millions of shillings issued to Members of County Assemblies (MCAs), governors and senior county officials under official car loan and mortgage schemes may never be recovered. This is according to the latest Auditor-General report.
The audit findings for the financial year ending June 30, 2025 expose widespread defaults across county assemblies and executive offices, raising concerns about weak financial controls and poor accountability under devolution.
Auditor-General Nancy Gathungu notes that several counties have failed to recover loans advanced to both serving and former officials, with some unpaid balances dating back to the early years of devolution in 2013.
EXITED SERVICE
In many cases, the beneficiaries have since exited office, died, or disappeared from county payrolls, yet there is little evidence that county governments pursued recovery through legal or administrative means.
“Some officers and MCAs passed on without repaying their loans, while others left office with outstanding balances,” the report states, warning that the burden may ultimately fall on taxpayers.
The audit links the growing losses to weak or non-existent regulations, lack of insurance cover, absence of collateral, and ineffective loan recovery mechanisms.
In Mombasa County, the assembly has failed to recover Sh53.56 million issued through car loan and mortgage schemes. Part of the amount is owed by former MCAs who served between 2013 and 2018, while other balances relate to deceased members and officials who left office years ago.
STRUGGLING TO RECOVER
Bungoma County is struggling to recover Sh23 million advanced to MCAs from the first and second county assemblies who were not re-elected. Auditors questioned why the loans were structured beyond the five-year term of MCAs without adequate safeguards.
In Uasin Gishu, Sh118.94 million issued to county staff has been classified as non-performing. The audit also flagged a former governor who defaulted on a mortgage loan initially set at Sh40 million and later increased to Sh64 million, exceeding limits set by the Salaries and Remuneration Commission.
Similar lapses were reported in Samburu, Marsabit, West Pokot, Kajiado and Nyamira counties, where millions were advanced without insurance cover or collateral, and recovery efforts were either weak or non-existent.
The Auditor-General warns that unless counties tighten oversight, enforce recoveries and hold accounting officers accountable, car loan and mortgage schemes risk collapsing, deepening public distrust in county financial management.
