Auditor-General Gathungu pokes holes in KICC valuation

 

Auditor-General Nancy Gathungu has raised doubts over a recent valuation of assets owned by the Kenyatta International Convention Centre (KICC), saying it may not have been done in line with current market rates.

The 2018/19 audit report on accounts of KICC before Parliament shows that the State corporation is worth Sh4.04 billion as per assessment undertaken during the year under review.

Freehold land

A breakdown of the exercise that cost the taxpayer Sh7.6 million as depicted in the audit report, shows the freehold land on which the building stands is worth Sh2.3 billion, buildings at Sh1.66 billion, furniture Sh21.46 million and office equipment Sh55.25 million.

Although the figure excludes land popularly known as Comesa parking area and courtyard on which the statue of Kenya’s president stands, Ms Gathungu doubts the figures, saying, the assets were undervalued.

She says in the report: “The valuer did not give a detailed report on how the valuation was undertaken and why the valuation, particularly the freehold land and buildings seem to be undervalued compared to the current market values.”

Valuer unknown

It is not clear who undertook the valuation as it has not been captured in the audit report whether it was done by a private entity or the National Land Commission (NLC).

Usually, NLC is the body mandated by the Constitution and the Land Act to do valuation for government agencies. This includes private property the State intends to acquire compulsorily.

Curiously, the land on which the KICC building stands is not registered in the corporation’s name. The audit report has not stated in whose name it is listed.

Ms Gathungu has also flagged failure by KICC management to incorporate the valuation figures and the assets register in the financial statements as required by the Public Finance Management (PFM) Act.

Public investments

Mvita MP Abdulswamad Shariff, chairman of the Public Investments Committee (PIC) of the National Assembly that oversees KICC said the issues raised by the audit need to be clarified.

“PIC exists to protect public investments. As a matter of fact, Ms Nana Gecaga (KICC chief executive officer) will have a date with this committee soon to respond to the issues the auditor-general has raised,” Mr Shariff told Nation.   BY DAILY NATION