The Kerio Valley Development Authority lost Sh2.1 billion last year, raising fears its operations could stall if more cash go missing.
Auditor General Edward Ouko has warned that the Eldoret-based agency could plunge into crisis.
A 2016-17 audit report tabled in the National Assembly says KVDA accumulated Sh2,129,080,849 deficit, compared to Sh2,027,543,843 incurred in the previous year. It increased by Sh101.5 million.
“If strategies are not put in place to reverse the loss-making trend, the authority’s future operations are likely to be adversely affected,” Ouko said in the report.
In February, KVDA announced it would lay off 300 employees in a restructuring plan geared towards improving services and streamlining recurrent expenditure.
Managing director David Kimosop told the staff that they had financial constraints because of
“Due to underfunding of the recurrent vote, payment of salaries and other statutory deductions has been a problem. The number of staff is relatively higher than the projects can support,” he said.
KVDA is mandated to plan, initiate, coordinate and monitor implementation of programmes and projects that transcend administrative boundaries within Kerio Valley.
It is also liaises with the government, the private sector and other agencies on matters by limiting duplication of activities and ensuring best use of technical, financial, human and natural resources.
Ouko raised the red flag over the authority’s Sh708.9 million investment property during the financial year. This relates to the net book value of permanent buildings.
The report says a detailed schedule of the investment property and valuation reports on rents paid were not made available for audit.
“In the circumstances, the completeness and accuracy of the investment property balance of Sh708,904,769 could not be confirmed,” it reads.
The report disclosed that during the period, directors of the regional agency pocketed Sh13.1 million that could not be confirmed.
“The expenditure was not supported by proper analysis indicating the amount paid to each director, nature of the allowance, date of the meeting and nature of the meeting attended,” Ouko observed.