Pyrethrum farmers in Nyandarua County. The parastatal is heavily weighed
by debt and unaccounted-for funds and has not paid farmers. FILE
By EDWIN MUTAI
In Summary
- PBK has failed to pay farmers or service a recent government loan that stands at Sh1.13 billion as at end of the last financial year.
- The board has so far failed to account for 132,749kg of pyrethrum stock whose movement could not be explained from the year 2002 to 2005.
- It owes farmers Sh136.71 million and has failed to honour the terms of a government loan that stood at Sh990.93 million, inclusive of principal amount and accrued interest as at June 30, 2012.
The Pyrethrum Board of Kenya (PBK) cannot trace
pyrethrum worth Sh2.66 billion as it teeters on the brink of collapse
under the weight of debt.
According to the Auditor General, the parastatal
has failed to pay farmers or service a recent government loan that
stands at Sh1.13 billion as at end of the last financial year.
The board’s continued operations, going by audit
report tabled in Parliament on Wednesday, depend solely on the support
of creditors and the government.
Auditor General Edward Ouko has qualified the
board’s books of accounts — meaning there are serious gaps in the
reporting. The board has so far failed to account for 132,749 kilos of
pyrethrum stock whose movement could not be explained from the year 2002
to 2005.
The auditor shows that the board continues on a
losing streak, with a loss of Sh89.97 million in the financial year
ended June 30, 2012, though this is smaller than the deficit of Sh184.67
million in the previous year.
Mr Ouko said PBK owed farmers Sh136.71 million and
has failed to honour the terms of a government loan that stood at
Sh990.93 million, inclusive of principal amount and accrued interest as
at June 30, 2012.
The auditor in the March 2013 said it was not
possible to confirm that the property, plant and equipment balance of
Sh1.48 billion presented by the management was stated fairly.
He said the amount includes land and buildings
valued at Sh1 billion, which excludes seven parcels of land registered
with allotment letters and eight others of undetermined value that have
been registered in the name of the board.
The board also failed to resolve a 1989 fraudulent
transfer of property No 71/138 within the defunct Nakuru Municipality
to a private developer.
On the loss of the Sh2.66 billion stock, the
report says two former managers and four members of staff were
interdicted and the matter is under investigation by the Ethics and
Anti-Corruption Commission.
“However, the investigations do not appear to have
been completed as at June 30, 2012 and the recoverability is,
therefore, doubtful,” Mr Ouko said.
The auditor questioned the unremitted statutory
deductions amounting to Sh702.29 million. He noted the amount includes
trade and other payables of Sh438 million — out of which a total of
Sh187 million represents Paye employees (Sh69.52 million), Paye board
(Sh618 million) and Pareto Savings and Pensions Fund (Sh82.84 million).
“The argument is unable to explain under what
circumstances they have continued to hold such huge sums of statutory
deductions at the expense of its staff,” said the auditor.
Mr Ouko said PBK did not avail any evidence to show that its budget was approved by the Treasury as stipulated.
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