Section 23 of the Societies Act in Kenya establishes crucial restrictions on the appointment or election of certain officers within registered societies or exempted societies.
These restrictions aim to uphold integrity and prevent individuals with a history of fraudulent or dishonest conduct from assuming key roles. Let’s delve into the key components of Section 23.
Key Provisions of Section 23
Conviction-Based Restriction (Subsection 1)
No person with a conviction for a crime involving fraud or dishonesty shall be eligible for appointment or election to specific offices within a registered society or exempted society.
The restricted offices include:
(a) Treasurer, deputy treasurer, or assistant treasurer.
(b) Any other office responsible for the collection, disbursement, custody, or control of the society’s funds or accounts.
(c) Trustee or auditor of the society.
Limitation on Auditors (Subsection 2)
Subsection 2 further specifies that no person who is an officer of the society can be appointed or elected as an auditor of that society. This ensures independence and impartiality in the audit function.
Significance of Section 23
Preventing Fraudulent Individuals
The section serves as a preventive measure by barring individuals with a history of fraud or dishonesty from assuming positions of financial responsibility or trust within societies. This helps safeguard the societies’ financial integrity.
Protecting Society Funds
By restricting individuals with a fraudulent or dishonest background from roles involving funds, the provision aims to protect the financial interests of registered societies and exempted societies. It minimizes the risk of misappropriation or malpractice.
Maintaining Auditor Independence
Prohibiting officers of the society from being appointed as auditors enhances the independence and objectivity of the audit process. This separation of roles contributes to the accuracy and reliability of financial reporting.
Legal Consequences for Non-Compliance
Non-compliance with Section 23 may have legal consequences, emphasizing the seriousness with which the legislation treats the eligibility criteria for specific offices.
Conclusion
Section 23 of the Societies Act in Kenya establishes stringent restrictions on the appointment or election of officers with a history of fraud or dishonesty.
By doing so, the section aims to ensure the integrity of registered societies and exempted societies, protect their financial interests, and maintain the independence of the audit function.
