An audit has uncovered the improper investment of Kes.2.1 billion intended for coffee farmers from the coffee cherry fund.
The funds were deposited in a commercial bank, violating directives from the National Treasury. Auditor General Nancy Gathungu criticized the fund administrators for placing Kes.2,181,054,794 in funds into a call account, stating that farmers have not received value for their money.
Gathungu referenced a March 26, 2018, Treasury circular, which instructed state corporations and semiautonomous agencies to invest surplus funds in treasury bills or bonds directly through the Central Bank of Kenya.
The directive also required the retirement of funds previously held in commercial banks’ fixed deposits, without using intermediaries, which raised concerns over the fund’s management.
In her review of the accounts for the year ending June 30, 2023, Gathungu also highlighted irregularities with Kes.181 million in interest earned from the call deposit.
The balances had accumulated unapplied interest of Kes.181,054,794, which typically remains unearned unless rolled over with the principal. She noted that this situation denied the fund the chance to earn higher returns on the funds.
