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NCPB's debts and liabilities at Sh15.6 billion - audit

A section of the NCPB stores and offices in Eldoret town
NCPB A section of the NCPB stores and offices in Eldoret town
Image: MATHEWS NDANYI

The National Cereals and Produce Board's (NCPB) liabilities and debts stand at more than Sh15.6 billion, according to the Auditor-General.

In his latest audit report, Edward Ouko says the liabilities include Sh964.8 million in respect of VAT arrears payable to the Kenya Revenue Authority (KRA) on provision of agency services to the government.

The tax figure also includes an outstanding Sh464.4 million tax bill dating back to 2002.

The board on the other hand is owed more than Sh3.5 billion which includes Sh630.3 million for trade creditors, Sh7.4 million owed by staff and Sh 293.2  owed by sundry creditors.

Accumulation of huge debts by the government amounting to Sh7.5 Billion is adversely affecting operations at the board.

The debt includes Sh3.8 billion in payments for intervention programmes implemented by the board on behalf of the government.

“This has led to over reliance on expensive bank over drafts and loans that servicing of interests is a major drain in meager resources,”says the  former NCPB managing director Newton Terer in the 2016/17 audit report.

Terer indicates that during the period, NCPB posted profit of 265.8 million up from 265.3 million the previous year. However gross sales turn over declined from Sh8.07 billion to Sh7.79 billion during the year under review.

During the period,  NCPB received Sh2.9 billion which was used to purchase 992,000 bags of maize for Strategic Food Reserves (SFR). At the same time NCPB sold 2.8 million bags of maize at a value of sh 7.3 Billion. The money was remitted to SFR Trust Fund Account.

The board also imported and distributed assorted fertiliser to farmers at a cost of Sh6.2 billion.

During the period NCPB in collaboration with millers purchased and sold 429,897 bags of wheat at a cost of Sh 1.28 billion

The audit established that the NCPB' finance costs rose by 151 percent to Sh371.5 million from the previous year.

This includes Sh91 million in bank charges which Ouko said lacked evidence to prove how the figure was accrued.

“The management did not also explain what led to heavy borrowing from the banks leading to a high interest charge of Sh240.5 million in the same year,”,said Dr Ouko in his report.

NCPB's assets were valued at Sh6.7 billion but they included 55 donor funded storage facilities whose ownership had not been clarified by the board. The assets also included 37 parcels of land valued at Sh54.3 million but there were no titles to prove ownership.

NCPB has been embroiled in maize scandals and a Senate Committee has recommended that the board should be devolved so that most of its operations and assets are taken over by counties.