Water harvesting authority deficit doubles to Sh1.2bn

National Water Harvesting and Storage Authority offices in Industrial Area, Nairobi. FILE PHOTO | NMG

The budget deficit at the National Water Harvesting and Storage Authority more than doubled to Sh1.23 billion for the year to June 2021, underlining the cash flow problems at the parastatal that is now running a negative capital position.

Auditor General Nancy Gathungu said the Authority is operating under financial difficulties and mitigating measures to reverse the precarious financial position have not been disclosed in the books of accounts.

Ms Gathungu said the authority recorded an accumulated deficit of Sh1.27 billion up from a deficit of Sh715.9 million recorded in 2019/20.

She said the authority’s deficit increased from Sh193.9 million in 2020 to Sh569.7 million in the year ended June 2021.

“Further, current liabilities balance of Sh1.27 billion exceeded the current assets balance of Sh575.9 million by Sh696.6 million, thereby casting doubt on the authority’s capability to meet its immediate financial obligations as and when they fall due,” Ms Gathungu said in a report tabled in Parliament last week.

“The authority is, therefore, not in a position to meet its current financial obligations as they fall due and depends on creditors and government grants to meet its day-to-day operations,” Ms Gathungu said.

Ms Gathungu put the agency management on the spot for failing to recover Sh367.4 million in uncollected rent and other net receivables.

She said the Authority did not collect rent amounting to Sh25.9 million and net business unit debtors totaling Sh191.4 million in the year to June 2021. Ms Gathungu said the authority failed to collect Sh367,376,235 which has been outstanding for a long time.

“Further, review of the ageing analyses of the receivables revealed that Sh13,608,690 and Sh130,954,927 respectively have remained outstanding for more than 90 days and therefore casting doubt on their recoverability.” She raised the red flag over its continued retention of Sh456.6 million on behalf of suppliers whose project defect liability period had lapsed.

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