How Nairobi Water spent Sh50m on perks for 14 board members

The Nairobi Water and Sewerage Company is under scrutiny for irregular spending of Sh21.2 million in allowances for board directors.

The utility firm spent Sh50.2 million on allowances for 14 members of its board, says Auditor-General Nancy Gathungu.

This was against a budget of Sh29 million that had been allocated as remuneration for the bosses in the financial year that ended on June 30, 2020.

The report revealed that Sh19.58 million was paid as acting allowances and Sh30.6 million as special-duty allowances.

Ms Gathungu said the validity of the remuneration over-expenditure of Sh21.2 million could not be confirmed.

“The financial statements reflect operations expenses … of Sh2.9 billion. Included in the amount is board remuneration amount of Sh50.2 million. However, the company had budgeted an amount of Sh29 million in respect of board remuneration resulting (in) an unexplained over-expenditure of Sh21.2 million,” the Auditor-General says in her report.

During the period under review, 22 meetings were convened, with eight members attending more than 19 of them.

But according to the board’s regulations, the board and its committees meet once every quarter as scheduled though special meetings may be called when the need arises.

In such meetings, directors are entitled to sitting allowance, lunch and transport allowances.

A sitting allowance is also paid to non-executive directors for attending such meetings, as well as for any day of travel from the regular station in order to attend to the company’s duties.

The current board of directors of Nairobi Water and Sewerage came into office in July 2019 and is made up of 14 members. The chairperson is Ms Beryl Okumu Odinga.

Interestingly, company records revealed that some officers have been acting for more than two years, contrary to Section 6.3 of the Human Resource Policy and Procedure Manual.

Regulations state that if an officer has performed satisfactorily in the acting period, a confirmation of appointment should be made.

In its defence, the management said the issue had been partially resolved as the firm did not have a board of directors during the period.

“The company is in the process of filling the positions and has advertised for a consultant to conduct the (hiring),” the company said.