Sh1 Billion Missing at Kenya Planters Cooperative

The New Kenya Planters Cooperative Union is facing intense scrutiny after MPs uncovered disturbing financial and administrative irregularities, including more than Sh1 billion in undocumented expenditure and questionable staff management practices.

Appearing before the National Assembly’s Public Investments Committee on Social Services, Administration and Agriculture chaired by Navakholo MP Emmanuel Wangwe, NKPCU’s senior leadership led by CEO Timothy Mirugi struggled to account for discrepancies flagged by the Auditor-General in the agency’s 2022/2023 and 2023/2024 financial statements.

MPs warned that the lapses threaten an institution central to Kenya’s coffee value chain.

At the heart of the probe is Sh1 billion in expenditure under the Farm Input Subsidy Programme.

The Auditor-General says the spending, including Sh940 million for farm inputs and Sh61 million for awareness campaigns, lacks proper supporting documentation.

Othaya MP Wambugu Wainaina said no evidence had been presented to justify such massive spending and called the gaps unacceptable for a public entity handling farmers’ resources.

NKPCU insisted it had shared schedules with auditors, but the committee found the documents incomplete and missing key verification details like invoice numbers.

MPs described the inconsistencies as red flags that require immediate explanation.

The agency also came under fire for an unauthorised overspend of Sh73 million.

Although the approved budget was Sh452.2 million, NKPCU moved Sh518 million without permission to exceed the ceiling.

The Committee pressed the Director of Finance and Accounting, Ednah Kerubo, to explain how the breach was allowed to occur.

MPs further faulted the union for retaining eight officers beyond the mandatory retirement age of 60 without approval from the Head of Public Service.

NKPCU claimed the extensions were necessary because the employees possess rare skills needed to operate milling equipment inherited from the defunct KPCU.

Wangwe dismissed the justification, saying operational needs cannot replace legal procedures.

The lawmakers raised additional concerns over ethnic imbalance in the staffing structure, noting that nearly half of NKPCU’s employees come from one ethnic community.

Ndhiwa MP Martin Owino urged the agency to develop a clear recruitment policy that reflects Kenya’s diversity.

The Committee also flagged longstanding receivables and the diversion of project funds to a processing company instead of farmers or coffee inputs.

NKPCU admitted it did not seek approval from the National Treasury before making the transfers, prompting Wangwe to warn that the matter may require the intervention of the Cabinet Secretary.

On debt recovery, MPs said only Sh6 million of the Sh94 million owed to the union had been collected, translating to a recovery rate of just 6.4 percent.

The CEO was directed to submit a full schedule of all debtors.

Wangwe said every shilling meant for coffee farmers must be used transparently, adding that accountability is key at a time when the country is banking on coffee as its next major economic driver.