Auditor General Nancy Gathungu has questioned huge financial investments made by Moi University in the Rivatex East Africa Limited.
Gathungu said in her latest audit report covering 2019-/20 that the investment made by the university in Rivatex was not captured in the statement of its financial position.
She said the presentation of the financial position of the university was not in line with audit requirements.
The requirements are that when preparing consolidated financial statements, an entity combines the financial statements of the controlling entity and its controlled entities line by line.
The financial statement, she said, should outline assets, liabilities, net assets or equity, revenue and expenses.
Moi University, which owns and controls Rivatex, should have clearly indicated the details in its financial records.
Gathungu said a comparison of the amounts in the financial statements of the Moi University and Rivatex East Africa Limited as at June 30, 2020, exposed several inconsistencies.
In part of its financial records under miscellaneous, Moi University expense said it used Sh24.7 million on the textile firm. The records, however, do not reflect such expenditure.
The university also said it used or raised Sh21.5 million on assets disposal, but the same is not indicated in records at Rivatex.
At the same time, records at Rivatex revealed trade payables of Sh273.2 million, but the same does not appear in financial records of the university during the year under review.
“No explanation or reconciliation has been provided for the above variances,” Gathungu said in the report.
The company, headed by Thomas Kipkurgat as CEO, collapsed but was bought and revived by the government with support from donors at a cost of more than Sh6 billion.
It employs more than 800 people directly but has been dogged by massive claims of nepotism.
In one case reported to the Ethics and Anti-Corruption Commission, a senior manager employed more than six of his relatives in senior positions.
Gathungu also questioned the university’s failure to remit statutory deductions.
“An additional amount of Sh 1.6 billion for other statutory deductions have also remained unremitted to the relevant authorities against the requirements of Section 19 (4) of the Employment Act, 2007,” Gathungu said.
The university has been declared technically insolvent.
(edited by Amol Awuor)
