Senate questions Machakos County over Sh96mn car, mortgage scheme deposit

NAIROBI,Kenya Sep 29 – The Senate has questioned the Machakos County Government over Sh96 million held by SBM Bank as security for an employee car and mortgage scheme, with legislators raising concerns that the funds have earned no interest since 2019.

The Senate County Public Investments and Special Funds Committee, chaired during Monday’s sitting by its vice-chairperson, Senator Beth Syengo, questioned Governor Wavinya Ndeti and her executive over the management of the scheme and implementation of previous Senate recommendations arising from an audit of the county’s car and mortgage scheme and municipal management.

According to the Auditor-General’s findings, the county deposited Sh96 million with SBM Bank in 2019, but only Sh55.3 million had been disbursed to six beneficiaries.

The arrangement came under scrutiny after the committee noted that the county funds are being held as security while the employees benefiting from the loans are also required to provide personal collateral, including title deeds and logbooks.

“We cannot have Sh96 million in public funds sitting in an account without earning interest while beneficiaries are also required to provide their own security. The county must review this arrangement and demonstrate that it gives value to the public,” Senator Syengo said.

Governor Ndeti defended the arrangement, saying the Sh96 million was not idle but was being used as collateral to enable SBM Bank to advance its own funds to employees.

She said the county was engaging the bank to renegotiate the terms of the agreement following concerns raised by auditors and the Senate.

“The Sh96 million is security for the scheme, not money that has simply been left unused. However, we accept the concerns raised and are engaging the bank so that the arrangement can be reviewed and improved,” Ms Ndeti said.

Machakos Senator Agnes Kavindu called on the county to restructure the scheme to ensure more employees can benefit while safeguarding public resources.

“County resources must serve employees fairly. If this scheme is sustainable, then its structure should allow more eligible staff to benefit while protecting public funds,” Senator Kavindu said.

Senator William Kisang, meanwhile, pressed the county to provide documentary evidence to support its assurances, including details of its engagement with the bank.

“Verbal commitments are not enough for audit purposes. We need the revised agreement, evidence of negotiations and a clear record showing how the county intends to safeguard this money,” Senator Kisang said.

The committee also raised concerns over gaps in Machakos County’s municipal asset registers, compliance with revenue-account requirements and failure to meet statutory requirements on ethnic diversity and representation of persons with disabilities in recruitment.

The county was directed to renegotiate the agreement with SBM Bank and submit a revised draft of the deal, together with an updated loan book, to the committee.

It was also ordered to complete the valuation of municipal assets and ensure future recruitment in municipalities complies with diversity and representation requirements.

The committee is expected to use the submissions from the county to assess whether previous recommendations arising from the Auditor-General’s findings have been implemented.