Five county Assemblies are at the risk of losing millions of shillings over unpaid car and mortgage loans taken by MCA’s who lost in 2017 general elections and have not paid their loans.
The most affected counties according to Auditor General’s report include Nairobi, Busia, Nyamira, Kiambu and Kwale. Mr Ouko further that county assemblies advanced huge sums of money to MCAs without any form of security, contrary to the Public Finance Management (PFM) Act, thus putting taxpayers’ money at great risk in case of default.
In Nairobi for instance, The Auditor general said, 10 MCAs received car loans way above the recommended amounts. The former MCAs in Nairobi pocketed Sh12.7 million without proof of security. Nyamira assembly is also finding it tough to recover over Sh4 million loaned to the former MCAs after the expiry of their term of service.
Every ward rep is entitled to a Sh3 million mortgage and Sh2 million car loan in line with the Salaries and Remuneration Commission policy. This means counties need to allocate more than Sh10 billion to cater for the nearly 2,250 MCAs.
Meanwhile, about Sh78 million in car loans was dished out to 38 MCAs without the vehicles’ valuation reports, and about Sh100 million was given as housing loans without supporting documents contrary to the PFM Act.
Millions in taxpayers’ money will be used to pay former MCAs’ defaulted car loans and mortgages issued without security.