News
Senators Want Taita Taveta Water Body Probed For Sh100M Scandal
The Senate County Public Investments and Special Funds committee raised concerns over several audit queries on the Taita-Taveta County’s water utility during the tenure of former Governor Granton Samboja.
According to the watchdog committee, Sh100 million could’ve been lost in Tavevo Water and Sewerage Company through financial fraud and have recommended the Ethics and Anti-Corruption Commission (EACC) to investigate and recover irregular payments made to the firm’s board of directors.
The committee said the company is basically insolvent as it is operating with a negative working capital of Sh75.5 million and is struggling with debts to the tune of Sh545 million. Further, the utility could only collect Sh262 million in revenue against a target of Sh937.6 million.
The lawmakers also called for a complete overhaul of the board of directors within two months as well as confirmation or recruitment of a substantive managing director.
According to Auditor-General Nancy Gathungu’s report for the financial year ended June 2021, the water firm had bloated administration costs amounting to Sh390.9 million against revenues of Sh262 million.
The expenditure includes Sh102.3 million in staff cost and another Sh1.5 million in training expenses, which could not be supported with a training plan and training needs report, contrary to the law.
The auditor also queried the firm over Sh6.8 million spent on emoluments for the board, with irregular allowances of Sh790,000 flagged. There were also unsupported night-out claims of Sh450,000. Further, the board held 55 sittings out of which 12 were full board meetings, contrary to the law which sets the maximum at six.
Irregular composition of committees of the board, where each had five members against the requirement of three, was also flagged. The firm is also struggling with stalled projects worth Sh254.2 million.
Unsupported legal fees
Further, the audit report raised alarm over unsupported legal fees amounting to Sh750,000, with the company not being able to disclose the nature of legal services offered.
In the financial year ended June 2019, the company had a negative working capital of Sh208.1 million with liabilities of Sh489.1 million against assets of Sh280.5 million. The following fiscal year, the liabilities were Sh441.6 million against assets of Sh366.1 million resulting in a negative working capital of Sh75.5 million.
Additional reporting by Nation.
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