A fresh audit has placed the Kenya Meat Commission under intense scrutiny after gaps emerged in its financial records, including failure to capture a Sh1.67 billion Treasury loan, weak debt tracking, and growing losses that continue to strain its operations.
Auditor General Nancy Gathungu, in the report for the year ended June 30, 2025, issued a qualified opinion on the commission’s accounts, pointing to several issues that raised concerns over the reliability of its financial statements.
At the centre of the findings is a Sh1.67 billion loan from the National Treasury that KMC has not recorded in its books, despite earlier instructions following a verification process.
While the commission reported domestic borrowings of Sh372.4 million, Treasury records showed a loan balance of Sh977.3 million, creating an unexplained difference of Sh604.9 million.
The audit further noted that the Treasury had directed KMC to capture a loan liability of Sh1,667,125,232 as of June 30, 2021, continue accruing interest, and submit a repayment plan.
“Management has to date not recognised the loan amount of Sh1,667,125,232 in its books or provided a repayment plan as required,” Gathungu said.
Because of this, the auditor said the true position of the commission’s long-term liabilities could not be confirmed.
Questions were also raised on KMC’s records of payables and receivables.
The commission reported trade and other payables of Sh487.7 million, but Sh81.3 million of this amount had no supporting documents such as invoices and payment vouchers.
Further, pending payment vouchers worth Sh24.6 million linked to livestock supplies were left out of the creditors’ records.
On the revenue side, KMC is owed Sh552.4 million by government agencies, with the debts outstanding for more than 90 days and no clear recovery action shown.
Rental arrears of Sh19.4 million from tenants occupying KMC property were also flagged, alongside Sh126.6 million in older balances accumulated between 2012 and 2021 that were either disputed or could not be verified.
Gathungu said the commission lacks a structured debt management framework and does not have clear systems for assessing credit risk or reviewing doubtful debts.
“The accuracy and full recoverability of the outstanding receivables balance of Sh694,114,443 could not be confirmed,” she said.
The audit also raised concerns over KMC’s land and property assets, valued at Sh15.02 billion.
Title deeds for several parcels in Machakos, Nairobi, Kajiado, Kwale, Mombasa and Laikipia remain held by the National Treasury, limiting full verification of ownership.
Three parcels in Machakos, Nairobi and Mombasa are also tied up in court disputes and carry unpaid land rates amounting to Sh1.61 billion.
Leasehold properties in Kwale and Mombasa, initially issued in 1966 for 37 years and later said to have been extended in 2011, had no supporting documentation provided to confirm the extensions.
As a result, the auditor was unable to confirm the accuracy of KMC’s property valuation, which stands at Sh17.33 billion.
The report further shows a weakening financial position for the commission.
Revenue dropped to Sh1.64 billion from Sh1.71 billion in the previous year, reflecting reduced sales performance.
Operating losses widened to Sh588.8 million from Sh365.6 million, deepening concerns over sustainability.
Management linked the downturn to livestock shortages caused by delayed payments to suppliers, which disrupted supply and led to stock-outs, as well as slow payments from government customers.
“The continued accumulation of losses signifies persistent financial underperformance and sustainability challenges, casting doubt on the commission’s ability to operate profitably and achieve its financial objectives,” the report states.