Economy

Red flag over varying State rental income

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Auditor General Nancy Gathungu. PHOTO | LUCY WANJIRU | NMG

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Summary

  • The latest audit shows that rent income from State-owned housing units rose by Sh103.5 million in the year to June 2019 compared with a decline of Sh93 million in the previous year when it reported Sh156.3 million.
  • The 2018 income was a decrease from the Sh249.6 million banked the previous year.
  • Auditor-General Nancy Gathungu while raising the red flag said no satisfactory explanation was given for the reduction.

The Housing Department is on the spot over inconsistencies in the amount of rental income collected, raising suspicion that part of the cash may have been misappropriated.

The latest audit shows that rent income from State-owned housing units rose by Sh103.5 million in the year to June 2019 compared with a decline of Sh93 million in the previous year when it reported Sh156.3 million. The 2018 income was a decrease from the Sh249.6 million banked the previous year.

Auditor-General Nancy Gathungu while raising the red flag said no satisfactory explanation was given for the reduction.

“In the circumstances, the accuracy and completeness of the comparative rent income for the period ended June 30, 2019 could not be confirmed,” Ms Gathungu, said in the department’s audit for the eight months period ending June 2019.

She put the department on the spot to explain why statements of receipts and payments reflect comparative rent income of Sh156,530,113 while the trial balance in support reflects a nil balance.

The rental income is received from civil servants occupying government residential buildings.

Housing principal secretary Charles Hinga earlier told Parliament that the department had recorded a jump in rent from government houses following operation of a single bank account.

Mr Hinga in August 2019 told the National Assembly’s Public Accounts Committee (PAC) that the Housing Department had invited auditors to investigate the unusual jump in rent from government houses after a review of bank accounts.

He said when the multiple accounts operated by various ministries, departments and agencies were closed and a single one opened, the rental income increased significantly.

The average monthly deposits to the single bank account jumped to Sh37.7 million in the six months to June, compared with Sh4.4 million paid in December.

“I have requested National Treasury Internal Audit unit to come and conduct a full audit. I am concerned whether we are actually losing money or it's issue of revenue reconciliation. As I speak, I do not have enough accountants,” he told the committee chaired by Ugunja MP Opiyo Wandayi.