An audit report has exposed widespread mismanagement in 17 water and sanitation companies across the country, leading to the loss of millions of taxpayers’ money.
The money was lost through unaccounted-for non-revenue water and customer deposits, and illegal allowances paid to the water companies’ board members.
According to the Auditor General’s report for the fiscal year ending June 30, 2023, several companies failed to account for up to 60 per cent of the water they produced, leading to potential revenue losses that could have expanded water supply by over 50 per cent in water-scarce counties.
In Kiambu County, Ruiru-Juja Water and Sanitation Company did not bill for water worth Sh388 million after producing 13,179,010 cubic metres of water. The company also exceeded allowable non-revenue water losses, highlighting operational inefficiencies and financial mismanagement.
In addition, the water company held 20 board meetings against the maximum four, making the company incur an additional Sh2.8 million in board members’ allowances. Two special sessions were held without the approval of the county water executive, and the board members failed to submit an annual plan to the water department.
Githunguri Water and Sanitation Company had a staggering 69 per cent of its produced water going unbilled, translating to losses of Sh92,092,770. Outdated water tariffs further compounded its financial challenges.
Nyahururu Water and Sanitation Company faces scrutiny for failing to account for Sh34,894,945 in customer deposits and discrepancies in revenue remittance agreements with the Laikipia County government.
Out of 3,241,297 cubic metres of water produced by the company, only 2,007,969 cubic metres were billed, meaning over 36 per cent of the essential commodity could not be accounted for.
“Also, the company remitted only Sh2,172,918 out of the Sh6,620,323 conservancy revenue collected in the year under review, resulting in unremitted conservancy revenue collection of Sh4,447,405. The water company spent the conservancy revenue without authority from the county government,” reads part of the report.
The report also flagged Eldama Ravine Water and Sewerage Company Ltd for incurring Sh13,339,482 in losses due to unaccounted-for water. An expenditure of Sh3,111,320 for water treatment chemicals could not be confirmed.
In Garissa County, the water and sewerage company was fingered for issues related to metering accuracy and billing practices affecting thousands of customers. Out of 18,126 customers, only 7,927, equivalent to 44 per cent, were metered, and only 2,420 out of the metered users were billed, leaving 5,504 metered customers unbilled.
“In addition, the company has been using expired water tariffs approved on May 14, 2010, and expected to have been reviewed in June 2012 for further adjustment,” the audit report states.
Updated receivables ledger
The company also failed to maintain an updated receivables ledger that would show the balance brought forward, the amount accrued during the year, payments received and balances carried forward. In the circumstances, the accuracy and completeness of trade and other receivables balance of Sh868,725,168 could not be confirmed.
