National Cereals and Produce Board (NCPB) lost over Sh400 million in the purchase of gunny bags, MPs were told.
The board had allocated Sh842 million for the purchase of the storage materials but spent only Sh401 in the procurement.
The ministry, however, could not explain how the balance of Sh440 million was spent.
It also emerged yesterday how the board spent Sh3.2 million for maize storage, with documents tabled before the National Assembly’s Public Accounts Committee (PAC) revealing how certain suppliers were offered higher unit price in the deal.
Agriculture Principal Secretary Hamadi Boga was hard-pressed when he appeared before the committee, forcing him to ask for more time to bring top management of the board to explain the irregular purchase.
The ministry could not explain how the board identified suppliers in the purchase as there was no documentary evidence to show how the procurement was conducted.
The board awarded Greenland Suppliers to supply 2.7 million jute bags while Rai Plywoods, Textplast Industries and Trans Global Distributors were contracted to supply 525,000 plypropylene bags.
“Expenditure items include amounts of Sh446, 651,961 and Sh394, 907,461 respectively totaling Sh841, 559,422 relating to purchase of gunny bags.
However, an audit review of procurement records revealed that an expenditure of Sh401,460,400 was incurred on procurement of gunny bags during the year,” says audit report.
The ministry came under heavy criticism for awarding some of the supplies to foreign companies.
Busia Women Representative Florence Mutua said it was suspect that the tender worth Sh386 million was handed to a local firm for the bags that can be locally sourced.
PS Boga, however, said jute bags were procured through an open tender thus making it open to both local and foreign firms. The jute bags were procured at Sh143 per unit.
For instance, Rai Plywoods supplied 45,000 pieces of the bags at Sh38.28 each while Trans Global Distributors supplied 20,000 bags at Sh28.07.
Textplast Industries, which was the major supplier, delivered 400,000 bags at Sh28.08 each. The same firm supplied another batch of 60,000 bags at Sh30.74.
In his defense, the PS said the difference in price was because the bags were procured through different methods.
He explained that 400,000 pieces of P.P bags were procured through restricted tender method with a unit price of 28.08 while another 50,000 pieces were purchased at Sh30.74 through request for quotation method.
He told the session chaired by Jessica Mbalu (MP Kibwezi East) that another 10,000 pieces of P.P bags were procured through the request for quotation at Sh30.74.
Auditor General Edward Ouko in his 2016/17 report flagged out the purchase as irregular, raising issues with how the suppliers were identified.