Details have emerged of how a ghost chief executive officer and a manager of the Lake Victoria South Water Works Development Agency pocketed Sh5 million in unauthorised allowances.
An audit that covered the financial year that ended on June 30, 2018 shows that the CEO and chief technical manager of the agency irregularly drew Sh945,053 and Sh4,145,718 respectively in leave and acting allowances.
Auditor-General Nancy Gathungu said the duo continued to earn past the six-month period that they were supposed to serve the board, without presenting any evidence that their appointments had been extended.
The report indicated that the two offices were vacant from October 9, 2018 to September 10, 2019.
The actions of the two, she said, contravened section 4.5.4 of the Human Resource Policy and Procedure Manual that states that appointment in acting capacity is a temporary measure pending the substantive filling of the vacant post.
“The appointment shall normally be limited to a continuous period of six months or until the vacant post is filled, whichever comes earlier, but may be extended by the board/CEO if the post remains vacant. No evidence of any extension was provided,” she noted.
Non-existent
The audit also exposed diverse financial improprieties and advancing of payments for non-existent and shoddy projects amounting to millions of shillings.
The scrutiny raised red flags on the spending of Sh34 million on various projects in the eight counties covered by the agency.
Ms Nancy Gathungu blamed the management for failing to verify projects before paying and ensuring that the public got value for the money spent.
“In the circumstances, it has not been possible to confirm whether the area residents got value for money on expenditure amounting to Sh34 million,” she said.
Some of the irregularities cited were the payment of Sh15.7 million to complete the Homa Bay-Rangwe water supply project, which is yet to start operations, while the constructed tanks are leaking.
Another Sh7 million was disbursed to set up the Kamune Pan in Homa Bay County. But a physical verification indicated that the pan was only partially fenced and the work was not completed.
Some Sh3.3 million was also advanced to facilitate piping works at Gwassi Sindo water project, which was not in use and the works were not completed.
Also on the list of crooked payments is Sh3.9 million to a company to drill boreholes at Nduta and Got Kabok Primary School in Homa Bay County.
“Although the borehole was on an individual’s land, (the agency) did provide (an) agreement or title deed for (it),” noted the audit.
The agency also failed to show proof that Sh1.9 million was spent on conferences and shows, as the audit revealed that two contractors given quotations were not among the prequalified suppliers.
The audit also exposed lack of accuracy and completeness for Sh4.3 million paid to a firm for motor vehicle fuel.
The management did not provide for audit review a signed contract between the vendor and the agency outlining applicable terms and conditions.
Staff Pension Scheme
The agency was also found to be in breach of the law by failing to remit pension deductions and accruing staff gratuity of Sh5,605,289, as well as accumulated unremitted pension deductions of Sh5,271,991 to the National Water Conservation and Pipeline Corporation Staff Pension Scheme.
The auditor could also not confirm whether the agency had effective debt management measures after it was established that Sh4.6 million owed to Nyanas Water and Sanitation Company and Sh3 million to Gulf Water Services Company were outstanding over seven years.
The auditor noted that the agency had no legal officer to assist in handling arbitration and other processes and this had led to delays in litigation issues.
“As a result, the operation of the agency was not managed effectively and has (caused) the agency’s legal services expenses to increase from Sh8.3 million to Sh9.4 million,” the report said. BY DAILY NATION