Books to be kept by a registered society
A co-operative society shall keep up-to-date and in proper businesslike manner such accounts and such books as the Commissioner may from time to time direct either generally or in respect of any particular society or class of societies.
Notwithstanding the provisions of sub-rule (1), every co-operative society shall keep—
(a) a register of members showing in respect of each member—
(i) the name, age, date of application for membership, postal address and occupation;
(ii) the date he was admitted to membership;
(iii) the date on which he ceased to be a member;
(iv) the appointment, if any, of his nominees in accordance with rule 32 of these Rules;
(b) a minute book giving details of the proceedings at general meetings;
(c) a minute book giving details of the proceedings at Committee meetings;
(d) a cash book showing details of all moneys received and expended or paid out in any way by the society;
(e) a ledger containing such accounts as are necessary to properly record the transactions of the business;
(f) a personal ledger showing transactions of each member with the society including details of produce delivered to the society by each member and the payment made therefor;
(g) an assets register;
(h) a stock control ledger;
(i) a register of charges showing in respect of every charge created by the society the amount of the charge and the person entitled thereto;
(j) a register of loans to members showing in respect of each loan the name of the borrower, the amount borrowed, the purpose of the loan, the due date of repayment, and the date the repayment is made;
(k) a ledger showing deposits and withdrawals by members; and
(l) such other books as the Committee may decide or the Commissioner may prescribe.
Annual returns
The annual return required to be filed pursuant to section 25 of the Act, shall be in Form IVA set out in the Schedule to these Rules and shall be filed with the Commissioner within four months after the closure of the financial year.

Display of audited accounts
Every co-operative society shall cause its audited accounts to be displayed in a conspicuous place at its registered office and branches at least two weeks before presentation of the accounts to its members at the general meeting.

Approval of auditors
A person qualified under the Accountants Act (Cap. 531) wishing to be considered to audit co-operative societies shall make an application in writing to the Commissioner and shall pay a fee of three thousand shillings and such application may be made annually.
The Commissioner may cause the list of auditors approved to audit co-operative societies to be published in the Kenya Gazette.
Submission of audited accounts to Commissioner
The audited accounts required to be submitted to the Commissioner pursuant to section 25(7) of the Act shall be in six copies and shall—
(a) have the following minimum disclosures—
(i) correct name of the society as registered must appear on all accounts along with its registration number;
(ii) share capital disclosed separately;
(iii) statutory reserve computed separately;
(iv) one total only disclosed for each main group of assets and liabilities;
(v) specified loans as short term if repayment period is less than five years and long term if repayment period is more than five years;
(vi) provision for dividends, bonus or honorarium disclosed under current liabilities;
(vii) a detailed schedule of depreciation of fixed assets under “notes to accounts”;
(viii) details of all investments disclosed under “notes of accounts”;
(ix) stocks and cash balances stated indicating whether verified or otherwise;
(x) the balance sheet signed by the Chairman and two other Committee members;
(xi) separate accounts prepared in respect of each activity;
(xii) no material amount written off except with a resolution of the general meeting of the society accompanied by a satisfactory explanation;
(b) include a statement of management responsibility; and
(c) be submitted together with—
(i) an extract of minutes of the general meeting in support of appointment of the auditor; and
(ii) a banker’s cheque of the relevant audit and supervision fee.
The audited accounts shall be read together with Commissioner’s comments thereon, if any.

Establishment of the Fund
There is hereby established a fund to be known as the Management and Supervision Fund and every registered society shall, unless exempted in writing by the Commissioner, pay into it annually an audit and supervision fee.
The Commissioner shall administer the Fund and the balance of the Fund shall be kept with the accounting officer who shall be authorized to accept receipts and to make payments in accordance with the provisions of these Rules:
Provided that the accounting officer shall not make any payment from the Fund unless he holds a cash balance on behalf of the Fund sufficient to cover the payment.

The receipts to the Fund shall consist of—
(a) fees under sub-rule (1) as fixed by the Commissioner for the better carrying out of the provisions and purposes of section 25 of the Act;
(b) ten per centum of the audit fees paid by the society to the auditor in respect of the annual accounts in question; and
(c) fees paid under rules 16 and 17(2).
Expenditure charged to the Fund may include expenditure for—
(a) purchases of specialized stationery, office machinery and equipment for use by the Commissioner in the administration of co-operative societies and the Fund;
(b) repairs of office machinery and equipment purchased from the Management fund;
(c) temporary extra clerical assistance, authorized by the Commissioner as necessary from time to time in connection with the audit and supervision of co-operative societies;
(d) payment of professional audit fees which shall be subsequently recovered wholly or in part from co-operative societies concerned;
(e) liquidation expenses including legal fees and costs where no moneys are available to the liquidator and where in the opinion of the Commissioner such expenditure should be incurred for the proper carrying out of the
liquidation; and
(f) any other expenditure approved by the Treasury including the investment of funds surplus to requirements.
19. Accounts of the Fund
Fifty per cent of the annual receipts received by the Fund shall be payable half yearly to the Government as appropriations-in-aid.
All expenditure from the Fund shall be supported by vouchers and authorized by the Commissioner in the same manner as for other Government expenditure.
The Fund shall be audited annually by the Controller and Auditor General.

Quorum at general meetings
The quorum of general meetings of a co-operative society shall be as laid down in the by-laws.
Where a meeting is convened by the Commissioner under provisions of section 27(8) of the Act, members present at such meetings shall be deemed to constitute a quorum.

Presiding over general meetings
At all general meetings of a co-operative society the Chairman or in his absence the vice chairman or such other person as provided for in the by-laws shall preside and in their absence, any person elected by a majority of those present shall preside.
The Commissioner or his representative may preside at any meeting convened under the provisions section 27(8) of the Act but shall not be entitled to vote.
Voting at general meetings
Unless otherwise provided for in the Act, these Rules or by-laws of a co-operative society, any question referred to the members present at a meeting shall be decided by a majority of votes.

The Chairman shall declare whether every resolution put to the vote has been carried or lost and shall cause an entry to that effect to be made in the minute book of the society which when signed by him shall be conclusive evidence of anything contained therein.
The Chairman shall have one vote only and no casting vote.
A resolution on which the voting is equal shall be postponed to a subsequent meeting.
Conduct of affairs of a Committee
The majority members of a Committee may for good cause suspend the Committee member subject to ratification by a general meeting.
If during the term of office of a committee, a vacancy occurs in the Committee, the Committee shall, if the number of members drop below five, co-opt a member of the society to serve on the Committee until the next general meeting of the society.
Elected members of a Committee shall be removed only by a two-thirds majority of members of the society present and voting at a general meeting.
If a general meeting removes a member of a Committee, it shall forthwith elect a new member who shall hold office for the remainder of the term of the member so removed and where the entire committee is removed from office, the general meeting may decide to elect or fix a day for election of an interim committee of not more than five
members to hold office for a period not exceeding ninety days.
The quorum at a Committee meeting shall be as laid down in the by-laws.
The Committee of a registered society shall hold regular meetings at which—
(i) the minutes of its previous meeting shall be considered and confirmed;
(ii) the accounts, bank books and cash in hand shall be scrutinized and checked, and the Committee’s observations thereon recorded in the minutes;
(iii) any current business shall be considered.
A person elected into a Committee of a co-operative union or apex society on the basis of his elected position at the affiliate primary co-operative society shall cease to be a Committee member of the co-operative union or apex society upon being replaced or voted out at the primary co-operative society.

Board of Representatives
Every co-operative union and apex society shall have a Board of Representatives consisting of at least one delegate from each affiliated society elected at its annual general meeting.
No member serving on the Committee of a co-operative union may be elected to serve on the Board.
A chairman shall be chosen for each meeting from amongst the representatives in attendance at the meeting.
Every representative shall hold office until the next annual general meeting after his election but shall be eligible for re-election.
If during the currency of office of the Board a vacancy occurs such vacancy may be filled by a nominee of the committee of the affiliated society concerned.


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