The Water Services Regulatory Board (Wasreb) has accused the Murang’a Water and Sanitation Company (Muwasco) of violating legal guidelines set in the Water Act.
In an inspection report carried out in January this year, Wasreb noted that the company has not been maintaining any of its customers’ deposits in a bank account and that it changed one of its existing revenue accounts into a fixed deposit account where all its customers’ deposits are paid into then transferred to a revenue account.
The report further revealed that there were variances in some banks reconciliations which were not in relevant cash books, noting that it maintained a manual bank reconciliation statement.
“Upon testing the same bank reconciliation, it was found to have variances. Upon inquiring, it was established that the reconciliation variance in Sidian Bank account relates to transfers into the account from the operators’ account not posted while the variance in Equity Bank operators could not be explained,” the report said.
It stated that variances in the Sidian account was Sh814,000 while that in Equity bank was Sh4.2 million
The inspection report also noted that the company’s petty cashier had not posted all payments made through petty cash and, as a result, there were variances between ledger balances and actual cash balance held by the petty cashier.
The water regulator noted that the directors of the water company exceeded the limit set out in law for all the water service providers.
The law provides for a maximum of nine directors but Muwasco has 10 who still did not meet the constitutional gender rule requirement.
In addition, there was no age limit for the directors and the company did not ask them to declare their interest in matters before the sub-committee or the board.
The company was accused of allowing MPs to be members of the company, a move which the report said violated the doctrine of separation of powers as enshrined in the Constitution.
The report accused the managing director of signing appointment letters of directors, the same people he is supposed to be answerable to.
“It is good to note that the MD reports to the board of directors and therefore can’t purport to appoint them. The appointment letters of all the company directors should be signed on behalf of the shareholders by either the company secretary or any other person appointed by the shareholders,” read the report.
The report said that the ownership of Fort Beverages Industries Limited, a sister company of Muwasco, was not clear since it could not obtain the memorandum and articles of association of the new company formed to sell bottled water.
But when contacted, the Muwasco Managing Director Daniel Ng’ang’a told the Nation that he was still going through the report and that it was early to respond to it.
“Wasreb carried out the inspection in January and indicated that we were to respond by June 30 but I only received it on August 16. I am going through the report so that I may be able to respond to its findings,” he said.