The Postal Corporation of Kenya (PCK) is teetering on the edge of financial collapse, with a damning report by Auditor-General Nancy Gathungu exposing deep-rooted mismanagement, wasteful expenditure, and mounting losses that threaten the state-owned entity’s survival.
For the financial year ending June 2024, PCK posted a staggering Sh1.1 billion net loss, pushing accumulated deficits to Sh7.3 billion. Current liabilities stand at Sh9.5 billion vastly overshadowing current assets of just Sh1.8 billion leaving the corporation with a negative working capital of Sh7.7 billion and a crippling cash flow crisis.
One of the most glaring findings was Sh147 million in nugatory expenditure avoidable interest payments incurred because PCK failed to remit staff pension deductions on time. The Auditor-General questioned whether any value for money was derived from this loss, which symbolizes broader financial malpractice at the corporation.
The report also revealed Sh3.5 billion in unremitted payroll deductions, including Sh1.1 billion in unpaid taxes and Sh1.9 billion in pension contributions, breaching employment laws and undermining employee trust.
Asset management remains equally troubling. PCK carries Sh1.7 billion in disputed land assets 34 parcels under dispute and 55 properties without title deeds. Operational software worth Sh255 million has been classified as “work in progress” for eight years, inflating asset values, while obsolete software worth Sh57 million has never been used.
The audit further exposed Sh1.6 billion in questionable supplies, including Sh177 million from a terminated contract without documentation. Employee fraud amounting to Sh26 million remains unrecovered, and financial records continue to be distorted by decades-old liabilities and debts with no supporting documentation.
Budgetary discipline is virtually absent, with revenue falling Sh1.4 billion 41% below projections while expenditures exceeded income by Sh754 million, or 38%. Despite these alarming figures, the management failed to disclose the grave “going concern” risks in their financial statements.
The Auditor-General has warned that without urgent intervention from the government, creditors, and other stakeholders, PCK’s survival is uncertain. With systemic failures and unresolved audit queries piling up, the institution faces the real risk of collapse leaving taxpayers to shoulder the cost of years of negligence.
Unless sweeping reforms are implemented, Kenya’s postal service could soon become a casualty of chronic mismanagement and financial recklessness.
