Advance payment of Sh50 per kg of cherry described unsustainable, as a bank withheld farmers Sh60 million payment
The Mountain Journal
The seven members who were in charge of the troubled New Murarandia Cooperative Society, misappropriated Sh21.2 million among other irregularities, an inquiry report reveals.
The ousted members of the executive committee after the inquiry into the operations of the coffee society were barred from holding elective positions in the cooperatives in Kenya.
“The ineffectiveness of the supervisory committee has contributed significantly to the sorry state of the society affairs,” read the report.
The inquiry ordered by the commissioner of cooperative following petitions by the farmers discovered the committee acquired a Sh60 million loan without the approval of the members.
In the 49 pages reports, the investigators Mr Hesbon Kiura and Mr Simon Ireri exposed the irregularities, recommending the society to surcharge former committee members to return the Sh21.2 million they misappropriated. Sh 21.2 million as they withdrew cash Sh15.2 million.
Two of the officials, the report found they fraudulently obtained Sh4,080,000 from the society between 2016 and last year.
The amount came into their contact after they withdrew the cash while purporting to pay Kenya Power Sh400,425, Sambamba Technologies Sh1million, Jolin Technologies Sh280,000 and a funds transfer of Sh240,225.
An inquiry further revealed how they obtained loans without members approval, and they could not account for 831 bags of coffee in the year 2016, while on transit from the society to the millers.
The members in their push for investigation claimed in 17 incidents, citing that on April 14,2016, a total of 143 bags could not accounted, while on March24, 2016 another 77 bags went missing when on transit, as the inquiry team recommended the management to be giving the members actual information based on weight loss and deliveries to avoid doubts.
In the committee, the investigation report outlined paying the farmers Sh50 per kilogramme in advance, the amount found unsustainable, and which should be stopped.
“Crop advance should be reasonable to what can be recovered within the season,” read part of the report
They also detailed how due to low payment of the produce, the number of active farmers declined to 4,675 out of 8,408, where 55 percent produced less than 1,000 kilogrammes of coffee annually.
The surcharged officials were surcharged to pay between Sh 2.4 million and Sh 6.4 million.
Farmers, the report explained how they had diverted the coffee delivery points to nearby factories for better service and treatment.
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