The Treasury and the National Irrigation Board (NIB) are locked in a battle over Sh2.6 billion that was advanced to the latter in 2013 but has not been repaid to date.
The money was a loan meant to be paid back, according to the Treasury, but the irrigation board argued that the money was a grant that was meant for the implementation of the National Resource Management Progress programme.
Appearing before the National Assembly Public Investment Committee Tuesday, NIB chief executive Gitonga Mugambi said they had no money to pay back the government.
He told the committee chaired by Abdulswamad Nassir (Mvita) that unless the government gives the board money to settle the outstanding debt, it has no funds at the moment to pay back the debt.
“The figure of Sh2.6 billion reflected in the government’s outstanding loan statement is not captured in the books of National Irrigation Board as a loan. The disbursement was captured as part of development grants,” Mr Mugambi told MPs.
A letter dated April 2014 by National Treasury PS Esther Koimett addressed to Mr Mugambi asks NIB to confirm the loan balances to allow the Auditor-General Edward Ouko to complete the audit in the ministry.
“To enable the Auditor-General finalise the audit, you are requested to confirm the loan balance as at June 30, 2017,” reads the letter.
Mr Nassir warned the irrigation board that the government might deduct the loan from the allocation it gets each financial year.
“My fear is, Treasury can decide to deduct its loan from your allocation and give you the balance,” Mr Nassir said.
The government and the National irrigation have also differed on the amount as NIB says it received only Sh1.2 billion and not Sh2.6 billion.