Kenya Seed firms in Dar, Uganda post Sh77m loss

Auditor-General Edward Ouko. He says in a report that Kenya Seed Company subsidiaries in Tanzania and Uganda posted Sh76.8 million loss in the year to June 2016. FILE PHOTO | NMG 

In Summary

• Mr Ouko says Kenya Seed’s firm in Tanzania-Kibo Seed Company Limited, has a net current liability of Sh132 million and accumulated loses of Sh75 million.
• Mt Elgon Seed Company Limited in Uganda has a net liability of Sh143 million and made a loss of Sh101,000.
• Staff composition also questioned, with 48 per cent of workers coming from one community

By EDWIN MUTAI
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Kenya Seed Company subsidiaries in Tanzania and Uganda posted Sh76.8 million loss in the year to June 2016, Auditor-General Edward Ouko has said in a report.

Mr Ouko says Kenya Seed’s firm in Tanzania-Kibo Seed Company Limited, has a net current liability of Sh132 million and accumulated loses of Sh75 million.

Mt Elgon Seed Company Limited in Uganda has a net liability of Sh143 million and made a loss of Sh101,000.

Simlaw Seeds Company Uganda Limited has a net liability of Sh43 million as at June 30, 2016 while Simlaw Seeds Company Tanzania has continued to make losses, which had accumulated to Sh0.86 million as at June 30, 2016.

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Qualified opinion

“The continued operation of these subsidiaries as going-concerns is thus dependent upon the continued financial support from the parent company and creditors,” Mr Ouko says in a qualified audit opinion tabled in Parliament early this month.

Mr Ouko questions the company’s business continuity planning saying information available indicates that Kenya Seed Information Communication Technology Services Guidelines are not detailed enough to enable recovery of critical information systems from a major services disruption.

He says a formal documented Disaster Recovery Programme for use by IT staff to initiate orderly recovery of information system resources is not in place.

“It was also observed that preventive maintenance on IT equipment is not carried out on the IT equipment to prevent or detect malfunctions,” says the chief State auditor.

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Sub-optimal use

Mr Ouko adds that the current hardware support maintained activities in place are focused on corrective actions as opposed to being preventive and detective.

“In the circumstances, the IT equipment is susceptible to malfunction thus causing sub-optimal use,” Mr Ouko says in the audit tabled in Parliament by Leader of Majority Aden Duale.

Mr Ouko further questions the staff composition in the agency, saying it does not comply with the National Cohesion and Integration Act 2008.

“Audit review of the ethnic composition of the company revealed that the company had a total of 433 employees.

The ethnic composition of the company had one community with 47.86 per cent (212 employees) having increased from 41.55 per cent in the previous year being over 33.3 per cent requirement this is contrary to Part III Section 7(2) of the National Cohesion and Integration Act 2008, which states that no public establishment shall have more than one third of its staff from the same ethnic community.

"Consequently, the management is in breach of the law,” says Mr Ouko.