Maize Worth Sh1.34B Stored In Food Reserve Was Left To Go Bad

Auditor General Nancy Gathungu has raised the red flag over contaminated maize worth Sh1.34 billion at the Strategic Food Reserve Trust Fund (SFRTF) after it was left to go bad.

Gathungu has disclosed that a review of records of stocks at the National Cereals and Produce Board (NCPB) had shown that the Ministry of Health had ascertained that out of the 6 million bags of maize that was in stock as at June 30, 2019, maize in 176,265 bags valued at Sh342.5 million was found to contain high aflatoxin levels and was, therefore, not fit for human consumption.

In addition, she said that maize stocks held in Kisumu and Moi’s Bridge silos were found to have been damaged by heat as a result of having been stored in the silos for more than two years.

The silos in Kisumu had 39,905 bags while the Moi’s Bridge silos had 525,818 bags, all valued at Sh998.74 million.

The report also reveals that though stock summary records at the Nakuru depot as at June 30, 2019, had indicated that there were 387 bags of imported maize valued at Sh626,940, physical verification disclosed that there was no stock of imported maize at the depot.

“Though the Fund gave authority to NCPB to sell the maize at Sh780 per bag, the initial cost was Sh1,778 per bag thus resulting in a total loss of Sh560, 599,554, excluding storage and fumigation charges,” Gathungu says.

The report comes at a time when farmers are complaining that their maize rots in stores for lack of space in the depots.

In January, NCPB faced challenges buying maize from farmers after most growers opted to sell the crop to private millers and traders who offer better prices and make prompt payments.

This is after the board offered Sh2,500 per 90 kg bag yet millers were buying the same at Sh2,700.

Past scandals involving maize have seen top government officials prosecuted over loss of funds at the NCPB after they were accused of being part of the conspiracy.

Former Agriculture PS Richard Lesiyampe and former NCPB managing director Newton Terer were among suspects charged in court over various graft allegations involving maize. The case is still pending in court after they denied the charges.

Budget utilisation And in the report for the financial year that ended in June 2019, Gathungu also raises concern over storage costs, other general expenses as well as procurement of maize by the Fund worth billions of shillings which she says cannot be accounted for.

On the procurement of maize, she says that although the Fund budgeted to purchase 2 million bags of maize from local farmers for the 2018/2019 crop season at a price of Sh2,500 per 90 kilogramme, all amounting to Sh5 billion, the Fund only purchased 417,951 bags of maize of 90 kilogramme each at a total of Sh1 billion which translated to a budget utilisation of only 20 per cent.

Out of the Sh5 billion, an expenditure of Sh979.7 million was to be met from sales proceeds of old stocks of maize, while the balance of Sh4 billion was to be financed through exchequer issues.

On storage costs, Gathungu noted that although the statement of financial performance reflects an expenditure of Sh432.77 million on fumigation and storage charges for the year ended June 30, 2019, invoices that were verified during the audit to support the transactions indicated a closing stock of 3,414,518 bags of 90kg each which is equivalent at 6,146,132 bags of 50kg each while supporting schedules to the financial statements disclosed a closing stock of 6,279,685 bags of 50kg each.

“Although the management explained that the difference of 133,553 bags was the closing stock of the unsold imported maize, the accuracy of the reported expenditure on fumigation and storage costs could not be confirmed,” she added.

With regards to the payment of arrears of farmers, Gathungu noted that although the fund received Sh2.1 billion to cater for payments of debt owed to maize farmers for earlier deliveries and was also given Authority to Incur Expenditure (AIE) of Sh1.4 billion making a total receipt of Sh3.6 billion, examination of records indicated that an amount of Sh2.6 billion was spent on farmers’ arrears for 2017/2018 crop season leaving a balance of Sh931 million that has not been accounted for.

2,500 What the board offered per 90kg bag yet millers were buying the same at Sh2,700.

(PD)