Questions Over Missing Sh1.3 Billion in Mombasa Water Company

The County Public Investments and Accounts Committee (CPIAC) has raised concerns over the management and financial operations of the Mombasa Water Supply and Sanitation Company (MOWASSCO) following a review of the Auditor General’s report for the 2024/2025 financial year.

The committee, chaired by MCA Sylvester Kai, held a joint sitting with officers from the Office of the Auditor General at the County Assembly of Mombasa to examine issues flagged in the audit findings.

Acting Managing Director Habiba Ali led the MOWASSCO delegation and responded to queries regarding the utility’s financial statements for the year ending June 30, 2025.

During the session, committee members sought clarification on the decision by the Water Services Regulatory Board (WASREB) to place MOWASSCO under a six-month special regulatory regime.

Habiba told the committee that the company had not been consulted or given prior notice before the directive was issued, but said management would comply with the requirements.

She confirmed that the regulator had instructed the company to submit weekly income and expenditure reports, monthly bank reconciliations, and detailed management reports, while WASREB representatives would also oversee board meetings.

The Auditor General’s report flagged several financial concerns, including a discrepancy of more than Sh1.3 billion linked to the Water Services Development Project loan account, raising questions about the accuracy of the financial statements.

The committee also reviewed trade and other receivables amounting to Sh501.9 million, with concerns raised over weak documentation on debt recovery measures despite rising doubtful debts.

Legislators further questioned an unexplained variance of Sh96 million and sought clarification on how treasury allocations were classified between grants and loans.

Trade and other payables stood at Sh2.37 billion, including Sh1.08 billion that had remained unpaid for more than 120 days without supporting schedules. The report also showed that the company recorded a negative working capital of Sh1.9 billion and accumulated losses of Sh3.5 billion.

Committee members additionally raised concerns over 13 grounded vehicles valued at Sh9.9 million that had not been disposed of in line with procurement regulations.

Other issues highlighted included persistent non-revenue water losses due to leaks, illegal connections and pipe bursts, as well as unresolved wastewater project challenges and the discharge of raw sewer into the Indian Ocean.

The committee also noted that the company had been operating without a valid WASREB licence since November 2024.

In response, MOWASSCO management said measures had been introduced to improve revenue collection and strengthen operations.

These include deployment of revenue officers, debt recovery arrangements, installation of smart meters, and implementation of monitoring systems.

CPIAC directed the company to submit a recovery plan, an ageing analysis, and supporting financial documents as it prepares its report on the matter.