The defaults have increased by 30 per cent year over year from Ksh.770.1 million previously.
The rental arrears now make up about 24 per cent of the fund’s net receivables of Ksh.4.1 billion.
Nevertheless, Auditor General Nancy Gathungu has flagged more than half of the rental arrears as historical pending arrears in her audit of the fund’s books.
“A review of the debtors ageing analysis revealed debtors totalling to Ksh.541,755,371 which have been outstanding for more than two years. No explanation was provided by management for the failure to collect the rent arrears or write them off as bad debts,” the Auditor General stated.
The audit has further pointed at the Fund’s lack of policy for doubtful provisions as it warns NSSF may lose resources through invalid debtor provisions nothing some provisions have been made in relation to financially stable companies and individuals.
NSSF has Ksh.34.7 billion investment properties as per its latest financial disclosures to June last year.
The Fund earns rental income on its properties including Hazina Towers, Hazina Trade Centre, Hazina South B (estate), View Park Towers, Bruce House and social housing projects in Nairobi and Mombasa.
NSSF’s rental income has previously come under pressure from the supressed market for lettable space.
The Fund has an additional Ksh.5.1 billion in assets under construction which are expected to yield in additional rental properties.
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