The National Housing Corporation (NHC) is under scrutiny for its failure to furnish a detailed inventory of unsold properties valued at KES 3.2 billion for audit, as disclosed by Auditor-General Nancy Gathungu. Discrepancies in housing inventory, unrecorded land parcels, and financial concerns were highlighted in the audit.
Gathungu revealed that a portion of the unverified housing inventory, totaling KES 1.03 billion, originated from the transfer of the Parkroad Housing Scheme property and commercial shops from the State Department of Housing and Urban Development to the Corporation. However, the absence of a comprehensive list of houses in the inventory was noted, which is a violation of regulations.
The accuracy and completeness of the additions to the unsold houses, amounting to KES 1,024,352,689, could not be verified due to the absence of a detailed inventory. Gathungu also expressed concerns about unrecorded land parcels, stating that out of the 113 listed, only 45 had title deeds, while the remaining 68 lacked valuation, ownership documents, and were excluded from the balance.
The Auditor-General raised doubts about the recoverability of rural housing loans totaling Sh770.35 million, with 56 percent classified as unsecured loans. She voiced concerns about the sluggish debt recovery process from defunct local authorities, revealing a receivables balance of Sh2.86 billion, which includes outstanding loans from the local authorities.
Additionally, Gathungu drew attention to the deteriorating financial performance of the Expanded Polystyrene Panels (EPS) factory, operated by NHC since 2013. The EPS factory, designed to address housing shortages, reported a trading loss of KES 47,263,705 in the current year, continuing a decline from the previous year.
The audit uncovered issues such as erratic raw material availability, lengthy procurement processes, and unreliable production, resulting in losses. The cost of production for EPS panels exceeded income, leading to the factory operating at a loss. Despite management’s efforts to mitigate losses, the desired results have not materialized.
These findings highlight the challenges confronting the NHC and emphasize the need for corrective measures to enhance transparency, financial stability, and operational efficiency within the corporation.
