The treasury. [Nation]Many counties have exposed themselves to massive financial liability as a result of issuing an unsecured mortgage and car loans to employees, which has lead to defaulted repayments.Audits on the county governments’ accounts revealed that in most of the devolved units mortgage and car loan funds were directly transferred to beneficiaries who did not deposit securities with the fund managers, said the Treasury.The Treasury said in its Budget Outlook statement for 2017, “Loan and mortgage repayment was pegged on beneficiaries’ allowances rather than their salaries. A number of funds are uninsured, exposing them to contingent liabilities in the event of defaults or upon expiry of beneficiaries’ employment contracts”. Mortgages and car loans are each handled by a fund administrator who keeps custody of all collateral against such facilities and ensure all loans are recovered from beneficiaries this is according to The Public Finance Management Act.County government provide for car loan and mortgage funds in their budgets.In 2015 the Salaries and Remuneration Commission (SRC) set the maximum duration of mortgage schemes at 20 years and five years for car loans for both state and public officers in national and county governments.A county governor is entitled to a car loan of up to Sh10 million and a mortgage of up to Sh40 million. A deputy governor can access a car loan of up to Sh 5 million and a Sh25 million mortgage.Issuance of such loans to the county staff is tricky as they serve a five year time.The rate of interest on both the car loan and mortgage scheme was set at three per cent yearly on reducing balance for the duration of the loan.

Is there a story unfolding in your community? Let Hivisasa know