Senate Committee Discusses Financial Misconduct at Embu Water and Sanitation
Presided by Elgeyo-Marakwet Senator William Kisang, the Senate Committee on County Public Investments and Special Funds convened a meeting today with Governor Cecily Mbarire of Embu County. The agenda was to discuss issues raised by the Auditor General concerning the financial management of Embu Water and Sanitation Company Limited for the fiscal year 2020/2021.
The audit report highlighted several financial irregularities. These included mismatched cash balances, incorrectly labeled trade receivables, inconsistencies in the VAT ledger, and discrepancies between the computerized system and the balances in the financial statements.
Moreover, the audit uncovered concerns such as underreported water and wastewater balances, inaccuracies in customer and direct deposits, and unsupported trade payables and accruals. Additional red flags were the administration costs and staff allowances, which appeared unsupported, dubious board expenses, and missing ownership documents for assets worth Kshs.184,028,619.
The company’s issues did not end there. The lack of a policy for paid airtime benefits, insufficient documentation supporting a billing software upgrade and trade receivables adjustments, a budget deficit, unresolved audit issues, high levels of non-revenue water, lack of staff diversity, employee underpayment, outstanding corporate taxes, and missing risk management and ICT policies also added to the list of discrepancies. The corporation’s management did, however, offer explanations and corrective measures in response to these findings.
Having reviewed the audit report and considered the responses of the Governor responses, the committee directed the Governor to ensure stricter management of the water company. It also required that all water companies’ ownership and directorship processes align with the Water Act 2016 within 60 days. The Governor was further instructed to submit essential documents related to the board’s establishment.
Further, the Governor was tasked with guaranteeing the proficiency of the accounting and finance department staff. Capacity building for current staff was identified as a crucial need. The committee acknowledged the high levels of non-revenue water and requested the Auditor General to evaluate the effectiveness of proposed remedial actions.
Concerns were also raised about the company’s outstanding tax arrears. The Governor was tasked with ensuring total tax remittance compliance, and the Auditor General was asked to submit a follow-up report. Additionally, the Governor was asked to address governance issues like asset management, risk management, and internal controls.
Finally, the committee addressed the company’s reluctance to provide documents in a timely manner during the audit, warning of potential sanctions under the Public Audit Act 2015.
In the meeting, Senator Kisang was joined by Vice Chair Prof Tom Ojienda, Miraj Abdillahi, Karungo Thangwa, Hamida Kibwana, Tabitha Mutinda, and Godfrey Osotsi.
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