The Treasury pumped more than Sh55.9 billion into underperforming State agencies in the year to June, 2018, mainly as bailout packages, audit report shows.
The audit on Government Investment and Public Enterprises shows that there has been continued growth of outstanding loans, now standing at Sh823.7 billion as at end of June 2018. This is a growth of Sh30 billion or 3.77 per cent from Sh793.7 billion recorded in the year to June, 2017.
“It was also noted that failing institutions continue to receive additional funding when they are underperforming, thereby casting doubt on the criteria used to determine the advance of new loans,” the statement of outstanding loans states.
The report indicates that the balance of Sh823.7 billion includes new loans issued in 2017/18 totalling Sh55,981,443,441.
During the year under review, only Sh2,852,780,790 of the loans issued had been repaid while loans amounting to Sh3,061,205,343 were written off.
Outgoing Auditor-General Edward Ouko said the Treasury lacks fundamental documents and criteria for advancing loans to failing institutions that have continued to receive government bailout over the years.
He said the Treasury management could not provide the annual work plans, cash books, ledger, trial balances, quarterly reports and monitoring and evaluation reports for the loans issued during the year.
Kenya Railways tops the list of parastatals with huge loans at Sh476.4 billion followed by Kenya Power (Sh44.5 billion), Nzoia Sugar Company which owes Sh36.6 billion but the Treasury records shows a balance of Sh158.5 million.