•Housing corporation's capacity to collect Sh2.9 billion debt in doubt.
•Also worrying is continued losses at the agency's polystyrene factory.
Image: EZEKIEL AMING'A
The National Housing Corporation is at risk of losing acres of lands registered under its name to grabbers who have put up private property.
An audit report tabled in Parliament recently reveals that the corporation could lose 45 parcels of approximately 227 acres in various parts of the country.
Auditor General Nancy Gathungu raised concerns that the parcels, of undetermined value, have no title deeds which the corporation can rely on in the event of a claim.
“Some of these properties have developments on them,” the auditor said, citing a parcel in Stoni-Athi valued at Sh79.5 million which was written off from the books without supporting documents.
Gathungu further revealed that the corporation did not provide for audit review title deeds for five parcels of land measuring approximately 12.3 acres in Nakuru and Nairobi.
The auditor said in the report for the year ending June 2020 that in the ensuing circumstances, NHC’s declaration that its land balance is Sh2.2 billion cannot be confirmed.
“The accuracy, validity, and ownership and completeness of the land balance of Sh2,196,149,894 could not be confirmed,” Gathungu said in her qualified opinion on NHC’s books of accounts.
The corporation has also been questioned for putting Sh99 million in one of its subsidiaries, an allocation which was not supported by a certificate of registration and share certificates.
The unquoted investment in the company wholly owned by NHC was expended from the Research and Development Ltd vote-head.
Gathungu has also cast doubt on the recoverability of Sh2.98 billion owed to the corporation by various buyers and persons who subscribed to NHC tenant purchase schemes.
They include Sh196 million which was for outright purchase of furnished blocks in various projects which the buyers have not been able to pay.
There is also a balance of Sh450 million for the tenant purchase scheme and Sh24 million owed by former staffers of the corporation.
Also included in the balance is Sh1.63 billion owed by defunct local authorities.
“Provision for doubtful debts was, however, not made for these debts,” Gathungu said in the report that includes balances amounting to Sh779 million, which also had an unreconciled variance of Sh44.6 million.
“Loans amounting to Sh693.7 million have been outstanding for more than 90 days and although the management has made provisions amounting to Sh137 million, its adequacy is doubtful,” the auditor said.
In what could expose NHC struggles with debt collection, more so rent, the report reveals that the corporation is owed over Sh285 million in rent arrears.
Sh240 million of the stated amount has been outstanding for long, the auditor said, adding that the paltry Sh81 million provided for doubtful debts was equally not supported by a detailed schedule.
Also flagged is some Sh366 million whose recoverability is in doubt. “Although a provision of Sh1.4 million has been effected, its adequacy is in doubt.”
NHC is also owed over Sh110 million by the Housing Finance of Kenya and the Ministry of Public Works which Gathungu revealed has not been paid for the past one year.
Gathungu has also cast doubt on the sustainability of the corporations’ Expanded Polystyrene Panels factory.
This was after NHC made a trading loss of Sh37 million, Sh4 million upwards compared with last year, when it made a loss of Sh33 million.
“This is indicative of the continued deterioration in the financial performance of the subsidiary. No measures have been put in place to reverse this trend and the sustainability of the EPS factory is in doubt,” Gathungu said.
She also raised concerns with the delay in the construction of Langata Court Mall whose Sh527 million contract was executed in February 2015.
Gathungu said it was not possible to confirm whether value for money will be realised from the incomplete project.
“The contract is significantly behind schedule despite the approved extension of time having elapsed,” she said of the project which was to be completed in February 2016.
The project time was extended to January 2019 after the works were retendered at a contract sum of Sh468 million to another contractor.
She reported that a recent site inspection revealed that the contractor was still on site with only 45 per cent of the works done and Sh280 million paid out so far.