Auditor General asks gov't to reinvest over Ksh.3B car loans set aside for civil servants

Auditor-General Nancy Gathungu wants the State to reinvest the more than Ksh.3 billion set aside for the publicly-funded car loan scheme following slow uptake by civil servants.

The auditor general says that out of Ksh.3.8 billion that was set aside for the scheme, only Ksh.141.31 million was advanced in loans to buy cars by the civil servants in the year ended June 2021 leaving a balance of Ksh.3.7 billion.

Following the dismal uptake of the loans, Gathungu has called on the State to invest the idle cash on income-generating ventures noting the fund has fallen short of its objective.

“The objectives and purpose for which the fund was established may not be achieved and the value for the idle money has not been realised as the amount could have been invested on income-generating securities,” Gathungu says in a report to Parliament.

Her call comes barely ten years after the government set up the scheme to attract public service to attract and retain top talents in the public sector.

Since its inception in 2015, the National Treasury has been allocating more than Ksh2 billion every financial year.

The State has been issuing car loans depending on job grades and it comes with an annual interest rate of 3% which is relatively lower compared to the average lending rate of 13.5 per cent.

This loan is available for all civil servants except for those serving in Parliament, Judiciary and those public servants serving under the Public Service Commission.