The Agriculture and Food Authority is under scrutiny over questionable salary arrears and payments to farmers amounting to Sh200 million.
In a new report, Auditor General Nancy Gathungu has cast doubt on the transactions, stating that millions could be lost to duplicate payments amid lax oversight.
She says in the report, which covers the period up to June 30, 2024, that her review established incidents of duplicate payments and undocumented transactions.
There was no proof that monies meant for Chemelil, Muhoroni and Nzoia sugarcane farmers were ever paid out or reached the beneficiaries.
According to Gathungu, saccos and cooperatives received payments, but no remittance documents confirmed that farmers ever got the money.
At Chemelil Sugar Company, Sh140 million was paid out to a number of saccos and other institutions, but there was no record or proof of the money reaching farmers.
Chemelil did not provide any documents to show that the money was eventually received by farmers as directed by the Treasury.
Instead, the sugar company reported that it had no means of following up to confirm that each farmer got their dues as disbursed.
The company also couldn’t identify the beneficiaries of farmers who may have died between the time of preparing the list and the disbursement date.
Another transaction of Sh13.5 million is also in doubt—albeit the audit is not clear whether it is in respect of Mumias or Muhoroni Sugar.
Gathungu asserts it was not possible to confirm receipt of the amount as the entity did not provide any remittance documents from the saccos to confirm if the farmers received the money.
At Nzoia Sugar, Sh63 million, which the entity reported to have disbursed to farmers for offsetting their arrears, couldn’t be confirmed.
The report says the money was sent to various saccos, farmer cooperatives and banks, but the company did not provide any remittance documents from the Nzoia Sacco Society to indicate that farmers had received the money.
“In the circumstances, the completeness and regularity of farmers’ arrears could not be confirmed,” Gathungu said, putting the authority on the spot.
Another transaction of Sh150 million for offsetting salary arrears for February, March and April 2023 at Nzoia Sugar has also been red-flagged.
The auditor says the schedule prepared by the company and used by AFA for payment indicated that different staff members had duplicate account numbers.
As a result, some retirees got an irregular double payment to the tune of Sh5 million, Sh20 million in the case of casuals and Sh17 million to permanent staff.
“The accuracy and regularity of the salary arrears could not be confirmed,” the report tabled in Parliament recently reads.
Also flagged is a provision of Sh1.3 billion in respect to salaries that were harmonised.
Gathungu raised concerns that the amount was not supported by the relevant documentation, including an approved structure that was used to come up with the amounts.
“Further, the management could not explain why they had to provide for such a huge amount without finalising the consultation with SRC,” the report reads.
Gathungu said the completeness and regularity of the provision of the Sh1.3 billion salary adjustment couldn’t be confirmed in the ensuing circumstances.
There was no interim management committee report on the remuneration, minutes of the committee, or the current employment status of the affected employees.
Auditors also could not establish whether some of the employees were still in the organisation or if some had left due to natural attrition factors.
Over Sh11.2 billion in assets, including 17 parcels of land (Sh6.6 billion), were also without ownership documents. Some lands were illegally allocated to private developers.
Auditors further flagged idle cane testing units, which were built at Sh1.4 billion to help in ascertaining sucrose content as the basis of paying farmers.
The Sh1.39 billion project remains non-operational due to poor integration with sugar mills, despite being installed in 11 companies.
AFA has also been called out over an irregular investment of Sh221 million in a fixed deposit account without Treasury approval.
At least 28 dormant bank accounts (Sh13.1 million) raised red flags over financial oversight, reflecting a culture of impunity in public funds usage.
Instant Analysis
The audit underscores the country’s struggle to enforce accountability in agricultural funds, with recurring issues like ghost payments and stalled projects. Taxpayers could demand action as AFA’s failures directly impact farmers and sugar sector reforms.
