Agency on the spot for stocking infected Sh218m maize seeds
The Kenya Seed Company is on the spot for stocking varieties of seeds that were infected with Maize Lethal Necrosis Disease (MLND) in the year to June 2018.
The State-owned firm also held slow germinating maize seeds, increasing its storage costs.
“No reason was given by the management on why these Sh218 million obsolete stocks were not disposed leading to avoidable loss,” a fresh audit tabled in Parliament shows.
The report by Auditor-General shows that Kenya Seed Company (KSC) made provision of Sh250,177,000 for obsolete stocks in the statement of profit and loss and other comprehensive income.
“Examination of records made available for audit revealed that varieties of raw maize worth Sh217,848,520 was infected with MLND and slow germination as reported by the Kenya Plant Health Inspectorate Service (Kephis),” the report dated June 17, 2019 states.
The report shows that 1.7 million kilogrammes of maize variety PH4 worth Sh124.9 million was the most affected by MLND.
KSC further lost Sh37.2 million of seed variety number DH04 weighing 514,131 kilogrammes.
DH01 seed variety was also destroyed by the disease with KSC losing 244,012 kilos of seed worth Sh17.6 million.
Other varieties that were destroyed by MLND are DH2, H628, H265, IRR, KSDTV-01, H614, H6213, H513 and H519.
The auditor also raised the red flag over the irregular procurement and payment of security services.
The company awarded security services contract to the Gillys Security and Investigation Services for Sh29.7 million annual contract but due to non-performance, the contract was terminated on July 31, 2017 and another contract signed with Lavington Security to provide the services for a five-month period.
The contract was renewed on December 11 for six months with effect from January 1, 2018.
“However, examination of the documents provided for audit revealed that the services procured from Ms Lavington Security were through direct procurement.”