Kenya Utalii College is broke after posting Sh410.5 million loss in the year to June 2017, a government audit shows.
“The college is technically insolvent and its continued existence as a going concern is dependent on financial support from the government and its creditors,” Auditor-General Edward Ouko says in a report to Parliament.
Mr Ouko said the college reported a deficit of Sh410,579,471 down from Sh452,599,190 that it recorded in 2016.
He said the current liabilities balance of Sh3.4 billion exceeded current assets figure of Sh537,072,539 thus resulting in negative working capital of Sh2.8 billion as at June 30, 2017.
Mr Ouko cited the management for failing to comply with the loan agreement signed between the college and the government of Kenya for a loan of Sh140 million.
The loan was advanced to the college in February 1996 to refurbish the Kenya Utalii Hotel. Payments for the loan amounted to Sh13 million as at June 30, 2017 and the accumulated interest amounts to Sh2,914,782,436.
“Further, and although the previous year’s financial statements indicated that the college had entered into negotiations with the government to have the loan together with accumulated interest written off, no meaningful progress in this regard had been recorded,” Mr Ouko said in a qualified audit opinion dated August 17, 2018.
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