Nairobi Water and Sewerage Company is on the spot after a new report by the Auditor-General revealed that the firm lost over Sh10 billion due to faulty water meters, unrecorded financial statements and allowances paid.

Auditor-General Nancy Gathungu says the utility firm which supplies the precious commodity to city residents sold a total of Sh96, 404, 533 cubic metres of water in the concluded financial year.

This translated to Sh5.63 billion of income using the rate of Sh58.5 per cubic meter. However, the firm declared an operating income of Sh4.97 billion leading to an undeclared income of Sh848 million.

The report says that Nairobi Water failed to declare an income of Sh200 million that was obtained as levy water and payment for sewerage services.

“A review of the billings by Water Services Regulatory Board revealed that a total of Sh365, 605 ,090 was charged to the company being levy charges at a rate of four percent in respect to water, sewer and metre rent top customers resulting to approximately expected revenue of Sh9.1 billion and not Sh8.9 billion reflected in the financial statements. This resulted in uncollected or undeclared revenue of approximately Sh200 million has not been explained,” partly reads the report.

During the year under review the water firm produced 192,787,851 cubic meters of treated water but its records understated the volume of water produced by indicating it was 178, 526, 912 cubic metres.

This, the auditor-general observes led to the loss of Sh834 million as projected revenue. The report also indicates that the water firm lost up to 50 per cent of its projected water sales which is way above the 25 per cent of the non-revenue water threshold that is allowed by the Water Services Regulatory Board.

Although the official company records indicate the firm produced 178,526,912 cubic metres of water only 96, 404, 533 cubic metres were billed meaning that it lost Sh9.8 billion according to the report.
The company is also on the spot for a very huge wage bill of Sh6 billion which translates to about 57 per cent of its operating income.