Governor Fernandes Barasa Appears Before Senate Committee on County Public Investments
The Senate Committee on County Public Investments and Special Funds held a meeting with Kakamega County Governor Fernandes Barasa to discuss issues emanating from Auditor General's report for the financial year 2020/21 regarding Kakamega County Water and Sanitation Company.
The report revealed several discrepancies in the company's financial records, including variances in board expenses, failure to account for water stocks in cost of sales, lack of explanation on the elements of the trade and other receivables balance, unremitted deductions in trade and other payables, and a continued loss-making trend that affects the company's ability to sustain operations and meet obligations.
The company provided schedules and documentation to support its responses and committed to implementing mechanisms to address the issues raised, including reviewing its tariff to cover operational costs and reducing outstanding arrears of employee deductions.
The company also cited high inflation and government-imposed VAT on essential items during the COVID-19 pandemic as factors affecting its financial situation.
The report highlighted several key audit matters related to budgetary control, insufficient budget for a water treatment facility, unresolved prior-year issues, lack of ethnic diversity in staffing, and non-revenue water.
The report noted a revenue shortfall and over-expenditure, with no satisfactory explanation provided by management.
Further, the company awarded a contract for a water treatment facility above the allocated budget, and management breached regulations on budgetary control.
Personnel records indicated that the company lacked ethnic diversity in staffing. Non-revenue water was higher than prescribed guidelines issued by the Water Services Regulatory Board (WASREB), showing inefficient water distribution or customer fraud.
The report recommended implementing ethnic diversity in subsequent employment and improving the company's water distribution to reduce non-revenue water.
Narok Senator Ledama Olekina noted that the company was technically insolvent.
" It is evident in the books of accounts presented to us and the outstanding unserviced loan of Ksh. 4 billion from Lake Victoria North Water Agency," remarked Senator Olekina.
The Governor, however, expressed regret that the water company could not repay the loan of Ksh. 4 billion, indicating the company's dire financial situation.©Standard Gazette, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s publisher is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Standard Gazette with appropriate and specific direction to the original content.