The Lower Eastern Times Opening The Third Eye
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Auditor General Nancy Gathungu has flagged major concerns over revenue leakages and questionable leasing practices at Postal Corporation of Kenya following an audit that revealed millions of shillings were collected from expired lease agreements without proper renewals.
According to the audit report for the financial year ending June 30, 2025, Posta Kenya continued earning about Sh39.3 million from 107 sampled lease agreements whose contracts had already expired.
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The report noted that although tenants were expected to vacate the properties once the lease periods ended, many remained in occupation and continued paying rent under outdated terms without any formal lease renewal or official communication between the corporation and tenants.
Gathungu said auditors found no evidence showing the leases had been renewed, extended, or formally regularized despite continued rent collection.
The audit further revealed that the corporation was still relying on leasing guidelines signed in June 2020, which were due for review after five years, exposing weaknesses in the management of its property assets.
Auditors also warned that rent for the expired leases had not been reviewed despite provisions allowing rent increments every two years, potentially denying the corporation higher income as property values continue to rise.
The report additionally questioned how the corporation leased out land and properties in various regional offices, citing concerns over transparency in tenant selection and rental pricing.
According to the findings, Posta Kenya failed to provide proof that lease opportunities were publicly advertised or subjected to competitive bidding before being awarded.
Auditors also noted that no valuation or rental assessment reports were presented to confirm whether the rent being charged reflected current market rates.
