Auditor General Edward Ouko has raised alarm over the possible loss of Sh2.1 billion fertiliser subsidy funds at the National Cereals and Produce Board.

The subsidy fund is part of the Sh3.5 billion the Ministry of Agriculture cannot account for, according to Ouko’s current report.

The procurement was first questioned by Ouko in his 2014/2015 audit report but a year later, the cereals board is still unable to prove whether Sh2,129,128,558 fertiliser subsidy was actually effected.

Apart from the invoice and the schedule provided by the board, no other verifiable document was available to show the actual quantity of fertiliser bought and the quantity sold to farmers.

The board could also not show the auditors how much the purchase price per bag of the fertiliser and at how much it was sold to farmers.

“As was also reported in 2015/2016, the State Department disbursed an amount of Sh2,129,128,558 to National Cereals and Produce Board as subsidy for purchase of fertiliser to be sold to farmers, a review of the position in 2016/2017 revealed that the expenditure is yet to be supported,” reads part of Ouko’s 2016/2017 report.


“Consequently, the propriety of the expenditure of Sh2,129,128,558 on subsidised fertiliser could not be ascertained.”

The revelations come barely months after an internal ministry report laid bare the rot at the institution where well connected individuals – not farmers – gobble millions at the expense of genuine suffering Kenyan farmers.

The internal ministry report identified 18 ‘traders’ masquerading as farmers and suspected to have links with powerful people, shared the bulk of the Sh 1.9 billion meant for maize farmers.

DPP Noordin Haji ordered the prosecution of Agriculture PS Richard Lesiyampe over the irregular purchase of maize by cereals board officials.

The report tabled by the National Assembly majority leader Aden Duale on Tuesday also revealed that taxpayers risk losing Sh45 million in non-delivered subsidies fertiliser the Agriculture ministry procured during 2016/2017 financial year.

“A review of records availed for audit revealed that a company contracted to deliver 182,200 bags of various types of fertiliser each weighing 50 kilos during the short rains, at a total cost of Sh 456,777,550, did not deliver 17,060 bags costing Sh 45,423,103 in the period under review,” Ouko said.

The ministry – despite the company failing to deliver all the bags as per the contract terms – still went ahead to pay the firm full amount of the contract.

No reason was given why the firm did not deliver the consignment in full. Staff at the Agriculture ministry, the report revealed, are holding Sh1,425,750 in imprests advanced to them during 2015/2016 fiscal year.

“No satisfactory explanation has been provided for failure to have the imprests accounted for or surrendered on or before 30 June, 2017,” Ouko noted.

The report also red-flagged the Sh300 million and Sh25 million allegedly spent in procurement of certified seeds, breeding stock, live animals and seed potato.

Read: CS admits flaws in tender for fertiliser