advertisement
Market News

State to audit Stima investment deals

Mary Mungai
Commissioner of Co-operatives Mary Mungai. FILE PHOTO | NMG 

The government will audit accounts of Stima Investment Co-operative following invitation by the society’s members.

The audit to be conducted by Nairobi principal co-operative officer Hesbon Kiura and Embu senior co-operative officer Charles Mugwika will look into management decisions executed by the current and past boards. A report is expected within the next one month.

Commissioner of Co-operatives Mary Mungai said her officers were at liberty to recommend surcharges or have any officer found culpable held criminally liable for actions they took on use of member funds during their time in office.

Sources within the society intimated that discontent had been brewing since April over uncontrolled land purchases that resulted in a land bank whose value was reportedly set at 46 per cent of total assets.

This saw some officials sent home and a new team appointed to streamline the by-laws with the incoming team resolving that future land purchases will no longer be single sourced but will be done on a competitive basis.

advertisement

The society’s audit report read out to members on April 19 raised several queries over handling of finances especially on purchase and sale of land where VAT on sales and purchases was registered at Sh76,430,379 million.

But on checking the Kenya Revenue Authority i-Tax portal, they discovered the society had a balance of Sh101,956,660 million meaning not all purchase were declared.

“There is an unreconciled difference of Sh25,526,291 between the two. We consider this a key audit matter since the amount is significant and remains unreconciled,” said the audit report prepared by Mbaya and Associates.

The firm’s statement showed that rebates to members share capital fell from 17 per cent in 2016 to 3.5 per cent in 2017 representing a 62 per cent drop from Sh154.8 million registered in 2016 to Sh58.46 million last year. This was mainly attributed to low sales of land and increased expenses.

Total expenses for 2017 reached Sh157.12 million compared to Sh94.66 million a year earlier while the income dropped to Sh223.93 million from 2016’s total income reported to have been Sh261.53 million.

advertisement