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PAC team kicks out Agriculture bosses in Sh5.7bn probe

boga

Crop Development and Agricultural Research principal secretary Hamadi Boga. FILE PHOTO | NMG

A parliamentary watchdog committee Tuesday sent away top officials of Agriculture ministry “for failing to adequately prepare” to answer questions raised by Audit Office.

The National Assembly’s Public Accounts Committee (PAC) directed the Crop Development and Agricultural Research officials led by principal secretary Hamadi Boga to appear before it after two days.

“They are not ready to respond to audit questions raised in the Auditor-General report for the year 2017/18. We have given them two days to prepare and appear before us,” Opiyo Wandayi, who chairs PAC said shortly after adjourning the meeting Tuesday morning.

The department had appeared before the committee but sought more time to put together responses to the audit queries.

Former Auditor-General Edward Ouko, in a report, raised the red flag over expenditure in the procurement of subsidised fertiliser.

IMPORT FACILITY

“In the audit report for 2015/16, it was indicated that the expenditure of Sh5.7 billion shown in that year’s statement of receipts and payments under use of goods and services included Sh5,368,529,000 relating to other operating expenses, out of which, payments totalling Sh4,189,820,270 were made to National Cereals and Produce Board (NCPB)... for subsidised fertiliser.

“However, included in the payments of Sh4,189,820,270 made to NCPB was Sh147,574,229 relating to interest on Post Import Facility which arose from a 2013/2014 contractual obligation the State department failed to honour,” Mr Ouko said.

FERTILISER SUBSIDY

He said the department in 2013/2014 had contracted a company to supply and deliver

102,550 metric tonnes of various types of fertiliser, at an equivalent cost of Sh3.8 billion.

The ministry subsequently assigned the contract to NCPB, who, in turn, entered into a Letter of Credit (LC) arrangement with a commercial bank.

“Upon delivery of the fertiliser and subsequent expiry of the 180 days of the LC, NCPB failed to pay up and the bank converted the LC into a loan chargeable at 14.78 per cent per annum,” Mr Ouko said.

He said the ministry disbursed Sh2.1 billion to the cereals board as subsidy for purchase of fertiliser to be sold to farmers in the year 2014/15.