Auditor queries bullet maker's Sh3bn assets

The office of Auditor General has raised a red flag over the accuracy, validity and the alleged existence of Sh3 billion in assets at the country’s ammunitions manufacturer, the Kenya Ordnance Factories Corporation.

The government facility is also on the spot for failing to account for tax recoverable worth Sh12.9 million as well as failure to refund the Sh140 million in cash or ammunition to the ministry of Defence, which has remained outstanding since 2011/12.

In his June 30, 2017 report to the National Assembly, Auditor General Edward Ouko says that the assets, which include land, idle machinery among others, cannot be properly accounted for by the facility’s management. According to the report, assets worth Sh810.4 million were not recorded in the fixed asset register as required by the law.

BLOCK FIGURES

“Although the management explained that the register indicates the block figures that were obtained from the records of the contractor and that of the ministry of Lands to value all the corporation assets including land so that the same can be documented, no documentary evidence has been provided in support,” Mr Ouko says in the report.

He added; “it is therefore not known when the process of valuing of the assets shall be completed and the register updated.”

A schedule with details of the building, civil works, waterline, equipment and machinery and furniture were not availed for audit verification.

The audit report will be considered by the House committee on Public Accounts. The watchdog committee is chaired by Ugunja MP Opiyo Wandayi.

SURVEYORS BLOCKED

The audit has established that the corporation has title documents for land measuring 727.7 hectares on which the factory stands but lacks documentation to the 908 hectares it requested to be allocated by the government.

The additional land was to enable it attain the required safety distance for the factory, subsequent to which an allotment letter was issued.

Though the process of surveying the additional 908 hectares started in February 2011, it stalled after squatters invaded and blocked the surveyor’s access to the land in the buffer zone.

The buffer zone is necessary to ensure safety of the people in the neighbourhood and the security of the factory in accordance with the international standards.

Mr Ouko’s report has also revealed that the bullet-making factory has in its records machinery, which has been lying idle from the time the factory was built.

“This is contrary to the Public Finance Management Act of 2012,” the report says.