Senate directs firms to mitigate non-revenue water loss

Investments and Special Funds committee chair Godfrey Osotsi (right) and Senator Miraj Abdulrahman during the committee's meeting at Parliament buildings, Nairobi. [Elvis Ogina, Standard] The Senate County Public Investments and Special Funds Committee has directed water companies boards and accounting officers to put in place measures to mitigate non-revenue water loss. The Committee Chairman Godfrey Osotsi said that this can be done through the application of Geographical Information System (GIS) for receiving real-time data on bursts and leakages, installation of smart meters for accurate billing, replacement of the dilapidated infrastructure and development of institutional anti-corruption policies and enforcement measures to prevent illegal connections. Speaking at Parliament Buildings during the release of the audit reports of seven water companies on Monday, Osotsi said that the boards and their accounting officers should ensure proper record keeping and provide all supporting documents to the Auditor General in accordance with section 9(1)(e) of the Public Audit Act, 2015 and adhere to the Accountants Act, 2008, failure to which the committee shall invoke section 62 of the Public Audit Act, 2015. "The Board of Directors for the various water companies in consultation with the Public Sector Accounting Standards Board should conduct continuous capacity building on financial reporting standards for finance officers in the water companies and the management, to improve the quality of reporting and enhance compliance," said Osotsi. The Senate Committee directed that water companies' boards should ensure that the accountants have requisite competency in financial management in line with the Accountants Act, 2008 and compliance with the financial reporting template of the National Treasury to ensure proper bookkeeping, preparation of financial statements and timely submission of statements and documents to the Auditor General. The committee directed the water boards and county governments to make deliberate efforts to comply with section 7 (1) and (2) of the National Cohesion and Integration Act, 2008 and Section 65(1) (e) of the County Governments Act, 2012 on diversity, one third rule on recruitment and ethnic inclusivity. The Vihiga Senator said that the accounting officers and the county governments should put in place strategic and innovative measures for recovery to boost the financial health of the water companies for self-sustainability. He further asked the accounting officers and counties to review and regularise existing assets indicating the service provider agreements before transition from the defunct councils and have updated assets registers that reflect the current financial position, determine and ascertain their commercial viability as required by the Public Sector Accounting Standards Board (PSASB). "The Boards of Water companies should indicate if the financial support is a conditional grant or donation in their books of account and it should not be a direct transfer from the County Executive and the governors through the County Executive Committee member for Water should monitor the financial operations of the water companies pursuant to section 184 of the Public Finance Management Act, 2012," said Osotsi. The committee directed county governments, the water companies boards and the accounting officers to ensure timely remittance of statutory deductions to the relevant institutions to avoid accruing interest and penalties. The senators urged accounting officers to comply with the provisions of the Income Tax Act (Cap 470), 1974, the Retirement Benefits Act, 1997, the Pensions Act, 1942. The committee directed water companies boards to provide a plan and commitment for the repayment of the outstanding statutory deductions, failure to which appropriate enforcement measures will be taken. The Senate committee asked water companies boards and accounting officers to prepare realistic budgets and revenue projections to prevent revenue shortfalls which have negative implications on service delivery. "The water companies boards should seek the necessary approval by forwarding the budget estimates to the County Executive Committee member for Water, who shall then forward it to the County Treasury as required by the law, the water companies should automate their billing system," said Osotsi. The Committee recommended that the Council of Governors should engage the Ministry of Water, Sanitation and Irrigation, the Water Services Regulatory Board (Wasreb), the Regional Water Works Development Agencies and the Inter-Governmental Relations Technical Committee (IGRTC) to settle the transfer of the assets and liabilities as required by the Water Act, 2016. The Boards and accounting officers of the water companies are required to comply with the relevant laws such as the Public Finance Management Act, 2012, the Public Audit Act, 2015, the Public Finance Management (County Government) Regulations, 2015, the Water Act, 2016, the Accountants Act, 2008, the Companies Act, 2015, the Income Tax Act, 1974, the Employment Act, 2007, the Pension Act, 1942, the Retirement Benefits Act, 1997 and the Water Services Regulatory Board (Wasreb) guidelines, failure to which penalties for non-compliance will be sanctioned. The committee recommended that governors should engage the IGRTC and the relevant regional water works development agencies to fast-track the transfer of the assets and liabilities so that they reflect a true position of the companies in their books of account. "This committee recommends that governors of counties with cross-cutting water companies to initiate an amicable process of dealing with the matter of ownership of the water companies, as a long-term goal, the governors should formulate a strategy for the establishment of independent water companies for the respective Counties," said Osotsi. The Senate committee recommended that Boards of Directors and the accounting officers should ensure the water companies have updated fixed asset registers pursuant to section 136 (1) of the Public Finance Management (County Government) Regulations, 2015 and in the format prescribed by the National Treasury and submit the same to the Office of the Auditor-General within 60 days from the adoption of this report. Boards of Directors and accounting officers should ensure that the water companies put in place all internal control systems such as the Internal Audit Committees as provided under section 155 (5) of the Public Finance Management Act, 2012 and Risk Management Policies as provided under section 158 (1) of Public Finance Management (County Governments) Regulations, 2015 among others to guide the internal operations.

Senate directs firms to mitigate non-revenue water loss

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