State to au­dit Stima in­vest­ment deals

Business Daily (Kenya) - - MONEY & MARKETS - James Kar­iuki jkar­­tion­ The so­ci­ety’s au­dit re­port raised sev­eral queries over han­dling of fi­nance

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 ex­pecte d 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.

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.


AU­DIT Com­mis­sioner of Co-op­er­a­tives Mary Mun­gai.

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