Economy

Agency risks Sh1bn fine for unremitted pay cuts

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Auditor-General Edward Ouko. FILE PHOTO | NMG

The Water Resources Management Authority (Warma) risks paying hefty penalties and interest for failing to remit Sh1 billion in statutory deductions, Auditor-General Edward Ouko has said.

The Auditor-General says the deductions amounting to Sh1,010,648,211 had been accumulating over the years.

“This is a clear indication that the authority is experiencing difficulties in meeting its financial obligations as a result of inadequate cash flow management,” said Mr Ouko in a qualified audit opinion dated July 26, 2017. Mr Ouko said the Sh1 billion that Warma has failed to remit is made up of Sh630,597,900 unremitted pay-as-you-earn.

The authority has also not remitted Sh235,133,654 in pension and Sh144,916,657 staff deductions. “Consequently, the authority risk penalties and interest on the unremitted amount of Sh1,046,744 as at June 30, 2016,” he said.

READ: Moi referral hospital accused of illegally deducting staff pay

Mr Ouko also put the Warma management on the spot for paying Sh10 million to a supplier to install a human resource information management system software which has not been delivered since 2014. He said the authority entered into a contract with a supplier to supply the software at a contract sum of Sh28.2 million in December 2015.

“The authority paid Sh10 million as initial payment as per the contract. The balance of Sh18.2 million has never been paid and the software has not been delivered.