SASRA Cracks Down on Auditors Over Delayed 2024 Statutory Reports

The Sacco Societies Regulatory Authority (SASRA) has moved to tighten compliance among auditors handling regulated Saccos by issuing a 30-day ultimatum to those who have not submitted their 2024 statutory audit reports.

The regulator said auditors who fail to meet the deadline will be struck off its official register, a decision that would permanently bar them from working with licensed Sacco societies in Kenya.

In a circular released by Acting Chief Executive Officer David Sandagi, SASRA expressed concern over what it described as widespread non-compliance by some external auditors and audit firms that handled Sacco audits for the financial year ending December 2024.

“Any failure to submit the Statutory Report for any financial period of auditing, and within the prescribed timelines, shall result in a permanent removal from the Annual List of Registered and Approved External Auditors for Regulated SACCO Societies,” the notice stated.

The authority reminded auditors that submitting these reports is not optional. The requirement is anchored in Section 44(3) of the Sacco Societies Act, which compels auditors to file their statutory reports within four months of the end of a Sacco’s financial year. SASRA said it expects full compliance within the set 30-day period.

Sandagi noted that failure to comply would attract strict penalties, including permanent removal from the list of approved auditors as outlined in Section 45 of the Act. He added that the circular does not prevent the regulator from taking further action against those who have already been flagged for non-compliance.

The Statutory Report plays a crucial role in safeguarding the financial health of Sacco societies. It provides an independent assessment of Sacco’s solvency, governance, and internal controls. Auditors are also required to highlight any evidence of mismanagement, breach of prudential standards, or illegal activity by directors, employees, or management.

The report must further assess whether internal processes and controls effectively protect members’ savings and ensure overall financial stability.

SASRA urged auditors to take the directive seriously.