In her latest NCPB audit report covering the year ending June 2021, she said the board’s statement of its financial position reflected a bank overdraft of Sh6.72 billion. That represented an increase of Sh1.3 billion from the previous year.
The increase was 24 per cent from the previous year’s balance of Sh5.4 billion. She said the bank overdraft was related to the government's fertiliser subsidy programme implemented by the board on behalf of the Ministry of Agriculture.
Gathungu said Kenya Commercial Bank continued to charge 12.5 per cent interest and a 10 per cent default rate on outstanding loans. She said the overdraft was undermining the board’s operations.
“In the circumstances, the board continues to incur default charges and interest on the bank overdraft balance of Sh6,729,563,152, which may affect its liquidity,” Gathungu said.
She said NCPB's performance had declined.
The report indicates the statement of profit or loss and other comprehensive incomes disclosed a decline total revenue from Sh1,659,790,172 reported in the 2019-20 financial year to Sh774,010,342 realised in the year under review.
This situation, she said, resulted in a decline in sales of Sh885.7 million or 53per cent.
Similarly, the board’s operating loss increased from Sh.1 billion reported in 2019-20 to Sh3.1 billion in the year under review.
“In the circumstances, the board may not internally generate enough revenue to finance its operations in future without relying on the government support,” she said.
The audit team also queried records of board assets, noting the statement of financial position reflects a balance of Sh19.1 billion of property, plant and equipment.
The amount includes a leasehold land balance of Sh5.7 billion. However, the leasehold land includes 34 parcels that do not have title deeds, the audit report said.
“In addition, the leases for three plots in Kericho had not been renewed, thus making a total of 37 properties valued at Sh587 million whose title documents were not in the custody of the board,” the audit report indicated.
Gathungu also questioned long-outstanding trade debtors and prepayments at NCPB.
She said the statement of financial position reflects trade debtors and prepayments, which include outstanding debts total more than Sh725 million that remained unsettled for more than eight years.
(Edited by V.Graham)
