The National Cereals and Produce Board (NCPB) is in a spot over claims of understating maize sales and stock losses.
Auditor General Nancy Gathungu’s report has also raised concerns over unaccounted fertiliser sales during the year under review.
For instance, Ms Gathungu noted that the NCPB management could not account for fertilisers which were sold at Meru depot, products whose sale was later cancelled from the ERP system.
The audit revealed anomalies in documents relating to the sale of 90,000 bags of fertilisers worth Sh243 million that were later cancelled.
“However, a review of stock cards provided no evidence of the stock movement as reported in the detailed sales transactions. They were also reversed in the ERP system with no explanation while the stock was not traced in the stores,” the report shows. The Auditor General questioned the understatement of sales by NCPB by Sh181 million during the 2020/2021 financial year.
The report further questioned how the board had reported Sh39.8 million in stock losses as sales.
“A part of the losses was attributed to transporters, but the management did not explain how the losses occurred since the goods were already in the depot. Further, the analysis revealed that more than half of the losses occurred at Nyasiongo sub-depot amounting to Sh19,165,300,” the report noted.
Records of maize sales in Eldoret depot, presented for audit, showed that sales worth Sh1.3 million were realised. However, the ledger at the headquarters indicated nil sales.
Another report generated from the ERP system from Nakuru showed 960 bags were sold, which differed from the physical stock card of 2001 bags.
“In addition, analysis of the detailed sales transaction report revealed sales orders of 3,145 bags of maize amounting to Sh4,025,600,” according to the report.
The Auditor General flagged NCPB directors for holding seven full board meetings against a restricted maximum of six for each financial year.
NCPB, according to the audit, is in a precarious situation with declining revenue and mounting operation losses, which increased from Sh1 billion in the 2019/2020 financial year to Sh3 billion in the year under review.
“In the circumstances, the board may not internally generate enough revenue to finance its operations in the future without relying on government support,” the auditor said.