NCPB only sold imports, no local maize, says audit

Maize farmers may have missed out on Sh20 billion payout in 2017-18 after an audit indicated that no local produce was sold in that period.

Auditor General Edward Ouko revealed that all sales by the Strategic Grain Reserve Fund were imported maize.

SGRF raised the amount after selling 8.8 million bags of 90kg grains at between Sh1,245 and Sh2,300. 

“Records indicate that the Fund bought 15,597,871 bags of imported maize and the closing stock was 287,431 bags only as at June 2018,” Ouko said.

“It is not clear whether the remaining bags were sold thereafter as they could not be accounted for at the time of the audit.” 

The findings, which to an extent indict the National Cereals and Produce Board, came at a time farmers are locked in a tussle with the government over imports.

While Agriculture CS Mwangi Kiunjuri has proposed that the government imports maize, the SGRF management says there are sufficient stocks at the NCPB.

Farmers have for some time complained that their maize rots in stores for lack of space at the depots.

In what exposes how unscrupulous NCPB officers operate, Ouko says the cost of imported maize was overstated and that the grain was procured without approval documents, and that suppliers were paid without vouchers.

Last year, investigative agencies flagged suspected fraud at NCPB, netting senior government officials they accused of being part of the conspiracy. 

Former Agriculture PS Richard Lesiyampe and former NCPB managing director Newton Terer among other suspects denied the charges.

They denied conspiring to defraud the agency of Sh469 million in the irregular purchase of two million bags of maize.

Even as the case is yet to be concluded, Ouko has cast doubts on 34 farmers who supplied more than 10,000 bags during the period under review.

Some of the farmers in question were charged in connection with the Sh1 billion scandal at NCPB.

For the overstated cost of imported maize, Ouko questioned a Sh3.5 billion variance in the records kept by the NCPB and those by the Fund.

Whereas the SGRF indicated that it bought maize worth Sh34 billion, records at the cereals board reported Sh31 billion.

The query arose amid findings that the SGFR reported an opening stock of Sh3 billion yet no local maize was sold.

“Further, payment vouchers of Sh9 billion relating to the procurement of the imported maize were not provided for audit scrutiny,” Ouko said.

The fund management also did not provide vouchers of Sh1.6 billion in respect to the payment to local maize farmers for supplies to various depots in the country.

“Although the management explained that the vouchers were taken by EACC for investigations, it was not possible to confirm the propriety of the expenditure,” the report reads.

Ouko further reprimanded the Fund management for an excessive expenditure of Sh5.1 billion without approval.

The money was expended when the government planned to buy two million bags but ended up purchasing 3.7 million bags from local farmers.

Another Sh288 million irregularly paid to farmers supplying Kisumu, Moi’s Bridge, Kitale, Bungoma, Lugari, Kipkaren, Nakuru and Eldoret depots was queried.

“Some of the forms were not signed by the assistant chief, chief, agricultural officer or ward administrator as per guidelines issued by NCPB,” Ouko said.

The audit further revealed that forms used to vet farmers had preprinted serial numbers while others were handwritten.

“Besides, the forms had no section for evidence of the size of land owned or leased by the farmers to show how much each farmer was producing.” 

This was the case of the farmers flagged for supplying over 10,000 bags with the auditor saying there was no proof they owned land to produce maize to that level.

“Although there were no set maximum limits, the practicability of delivering more than 10,000 bags from a single farmer could not be verified given the average production per acre,” the auditor reported.

Some Sh436 million paid to staff and suppliers without supporting documentation was also flagged.

Also queried was Sh41 million paid to members of a task force, repair of motor vehicles, board expense, accommodation and travel.

Ouko also queried the fund for holding maize worth Sh4.07 billion at various depots beyond the stipulated six months, a rule that was set to avoid deterioration and loss in value.

An unaccounted for 6.4 million bags of maize were flagged as they were not reconciled with sales and closing stock.

Some 176,265 bags of maize suspected to contain high levels of aflatoxin was also queried.

The maize was stored in Machakos, Nairobi, Meru, Isiolo, Migori, Nakuru, Lugari and Kitale depots. 

Edited by R.Wamochie