Kakamega County Water and Sanitation Company Limited (KACWASCO) management team has been interrogated over control of Public Funds and Assets.
On Wednesday, the top managers had a rough time in responding to questions raised by the Office of the Auditor-General in the Financial report for the Financial Year (FY)2016/2017.
Led by the company Chief Executive Officer (CEO), Mr. Abdikadir Abdi, the team appeared before the Kakamega County Public Accounts and Investments Committee (PAIC) in an interrogation session, which was also attended by officers from the Office of the Auditor- General.
According to the financial report for the FY 2016/2017, the company’s statement of financial status for the receivables and prepayments balance was at Ksh. 177,888,098 as at 30th June, 2017 but with no requisite documents and schedules to support the position.
In response, the management clarified that out of the said amount, Ksh. 166,158,291 was for water outstanding/arrears, Ksh. 11,258,307 for Kenya Revenue Authority (KRA) claim and Ksh. 471,500.
The committee noted with concern the rate at which the amount was increasing, with Hon. Philip Maina outlining that the KRA claim accumulation was too high and worrying and that could attract penalties.
We need to sample some out of the 30,000 active accounts per each category to help us check on the arrears, ’’ proposed Hon. Maina.
KACWASCO Finance Manager, CPA Edwin Mukoye, attributed the accumulation of the above figures to the numerous transitions experienced by the company.
Mr. Mukoye added that most of the debts inherited by the management were historical with some dating back to 1974. He further disclosed that the management had done a paper write-up requesting the Board of Directors to write off some of the debts, a move that Mr.Peter Otwori, an officer from the Office of the Auditor-General advised that must follow the due process before being implemented.
The CEO assured the committee that the company was working hard to ensure that the arrears were collected.
“We have got a debt collecting team in place that is doing all it can to recover the money,” said Mr. Abdikadir Abdi.
Lack of full disclosure on takeover of dissolved water company assets was another issue of concern raised by the Auditor-General’s office in the year under review.
KACWASCO management could not disclose both liabilities and assets inherited from the defunct Western Water Company Limited.
The company’s Technical Manager/Rural Directorate, Mr. Michael Ogola admitted before the committee that there was sharing of both the liabilities and assets between KACWASCO and Busia Water and Sanitation Company (BUWASCO) after dissolution of the Western Water Company.
Mr. Ogola, however, clarified that there was a Gazette Notice for dissolution and signed agreement that had been provided for review by the Office of the Auditor-General. He further said that a committee had been put in place to ensure smooth transition.
According to the management, fixed assets remained in their respective counties of operation while movable assets were retained in the stations initially assigned.
For the consumables like pipes were shared by the two companies basing on the two thirds formula.
More so, during the year under review, the company was said to have produced 4,214,851 cubic meters of water but billed only 2,227,382 cubic meters to consumers thus resulting into non-revenue water.
The balance of 1,087,469 cubic meters or approximately 47.15% of the total volume represented unaccounted for water which was 22.15% points above the allowable loss of 25% prescribed in the Water Service Regulatory Board Guidelines.
The unaccounted for water resulted in loss of potential sales estimated at Ksh. 19,675,943 calculated at the chargeable price of Ksh. 45 per cubic meter.
While responding to the above, the company’s Technical Manager said that during the year under review, there was road works in major towns in the county as well as rehabilitation of the Kisumu-Kakamega highway and that as a result, many pipes were destroyed leading to loss of water.
Mr. Ogola blamed the concerned ministry in charge of roads for not consulting the water company for relocation of water pipes before carrying out the road network rehabilitation.
The company has discussed and advised relevant institutions that in future, the company shall be consulted and water pipes be relocated away from the road reserves before any road works commences,” said the Manager.
He further disclosed that the Kakamega County Water Act has a clause that states that incase the water pipes are destroyed, then the concerned institution should repair.
The company C.E.O told the committee that non-revenue water was a big challenge not only in Kakamega but across the country and that it needs serious commitment to curb it.
For you to reduce the non-revenue water by 1%, it may take the company 2 to 3 years,” affirmed Mr. Abdikadir.
Other issues raised by the Auditor-General were; unsupported payables and Accruals and Unpaid Audit Fees, Short Term Borrowing, Directors’ Irregular Payments of Allowances, Unsupported Board Allowances, Unbudgeted for transportation, travelling and subsistence among others which were responded to by the company management.
PAIC is chaired by Member of County Assembly (MCA) representing Koyonzo Ward, Hon. Harrison Shikuku.