National Museums is insolvent, Auditor-General Nancy Gathungu says
Auditor General Nancy Gathungu at Inn Paradise, Mombasa,
on September 16, 2022.
A cloud of uncertainty looms over the National Museums of Kenya as it emerged that it is not in a position to meet its current financial obligations as they fall due and that it largely depends on creditors and government grants to meet its day-to-day operations.
A report by Auditor-General Nancy Gathungu on the audited accounts of the National Museums of Kenya (NMK), a State corporation, for the 2020/21 financial year shows it has current liabilities of Sh276.85 million against assets of Sh137.68 million, translating to a negative working capital of Sh139.17 million.
The audit further shows that the State corporation recorded a deficit of Sh434.66 million, “which depleted revenue reserves” from Sh12.94 million to negative Sh421.72 million, further casting doubts over its sustainability.
“This precarious financial position has not been disclosed in the financial statements,” the audit presented in parliament last week states.
Also flagged by Ms Gathungu is the fact that the government may not get value for money for the Sh226.02 million Fort Jesus Unesco World Heritage site in Mombasa that has stalled.
A review of the audited accounts of NMK indicate that at the time of stalling, Sh108.37 million had already been paid to a local contractor undertaking construction of the heritage site project.
The audit notes that the delay in completion may result in cost escalation and that the public may not get value for the funds already pumped into the project.
A site visit by the auditors indicated that the local contractor was not on site and had not been on the ground since December 2021.
Further highlighted is the Sh59.35 million Vasco Da Gama Seawall and concrete repairs project that has overshot its completion period.
The works on the Fort Jesus project started on September 3, 2020, with the completion date set for March 3, 2021 before being extended twice — to June 3, 2021 and September 15, 2021.
“It was noted that the extended periods had already lapsed and still the works are yet to be completed despite the company being paid Sh108.37 million by the end of the period under review,” the audit report states.
Audit verification in February 2022 indicated that a football pitch was yet to be completed.
“A public works officer informed the audit team that there was a presidential directive to have an ablution block built on the pitch. Excavations had been done but the ablution block had not been built,” the report states.
Also behind schedule is the lower garden retaining wall (centre portion), lower garden ramp (slab and balustrades), play structures installation (sand, picket fence and play structure) set up, irrigation fittings and pump installation, ablution block plumbing fittings installation and ablution block internal doors supply and installation.
Further, the contractor was required to construct the lower garden landscaping (grassing and ground covers), lower garden storm water drainage, supply of garden waste receptacle, installation of garden lights and CCTV, pump house and water tank plinth.
The Vasco Da Gama Seawall and concrete repairs project started on May 25, 2020 and was to be completed on May 10, 2021.
The report shows that although the contractor had finished the works and handed over the project to NMK, audit verification in February this year revealed that the pavement on the eastern wall had cracked and part of the ground had sunk.
The central walk way pavement concrete had also cracked. The cracks cast doubts whether the affected area has been filled with gunny bags or selected boulders as proposed in the bills of quantities.
“Consequently, the poor workmanship could be indicative of a lack of supervision and disregard to the desired value for money to the public,” the audit report says.
