Nyahururu water firm directors on spot over missing Sh14m

What you need to know:

  • The auditor’s report revealed that out of the 2.1 million cubic metres of water the firm produced, only 1,098,405 was billed to customers.

  • It is estimated that the unaccounted-for water may have resulted in the loss of sales of Sh15.1 million.

Directors of Nyahururu Water and Sanitation Company are on the spot after failing to account for Sh14 million in customer deposits in the firm’s accounts in 2013/2014 financial year.

Last week, the county’s Public Accounts Committee summoned the firm’s directors after Auditor-General Edward Ouko’s report cast doubt on its sustainability. The firm is wholly owned by Laikipia County.

The auditor’s report revealed that out of the 2.1 million cubic metres of water the firm produced, only 1,098,405 was billed to customers while the rest, representing 49 per cent of total volume, was unaccounted for.

“This is 24 per cent over the allowable loss of 25 per cent in accordance with the Water Services Regulatory Board guidelines,” the auditor-general said in his report.

It is estimated that the unaccounted-for water may have resulted in the loss of sales of Sh15.1 million that the auditor warned could have a negative impact on the firm’s profitability and sustainability.

The auditor also raised issue with Sh14 million in customer deposits for which the firm could not provide supporting documents.

During the previous audit, the firm had reported customer deposits amounting to Sh15.6 million but by the end of June 2014 the bank statement reflected a balance of Sh1.6 million.

He warned that the company’s financial position appears precarious and its continued sustainability as a going concern depended on support from the government.

When the firm’s board appeared before the committee at Green Hills Hotel in Nyeri, managing director Bernard Mwaura failed to explain the large volume of water unaccounted for.

However, he said the Sh14 million in customer deposits was just book balances with no money in the accounts.

“These were just book balances and we did not find the actual money when we took over from the municipal council,” said Mr Mwaura, accusing MCAs of lacking financial knowledge.

Thingithu MCA Michael Kinyua, who chaired the session, said the committee would recommend the reorganisation of the board to improve efficiency at the firm.