The Director of Criminal Investigations has received a formal request to investigate alleged financial mismanagement at the Nairobi Water Services Company, which is owned by Nairobi City County.
The inquiry was initiated by Kileleshwa MCA Robert Alai, who highlighted significant financial irregularities within the company.
Alai’s letter points to a troubling accumulation of debt amounting to Sh2.3 billion, primarily due to the non-remittance of pension statutory deductions to the Local Authorities Pensions Trust (LAPTRUST), the main pension fund for the company’s employees.
This issue raises serious concerns about the company’s financial management and compliance with statutory obligations.
In his letter, Alai references Article 226(2) of the Constitution of Kenya, which holds accounting officers of public entities accountable to the county assembly for managing public resources. He also cites Section 8(1)(c) of the County Government Act, which mandates oversight by Members of County Assemblies over the executive committee and other county executive organs in implementing county policies and financial management.
Alai wants the Director of Criminal Investigations to probe several key issues including:
1. Financial Impropriety: He questions why the Nairobi Water Services Company failed to remit pension statutory deductions to LAPTRUST and what measures are in place to hold the responsible officers accountable.
2. Unapproved Loan: Alai has raised concerns about plans to borrow money from a commercial bank to settle the debt to LAPTRUST without the Nairobi City County Assembly’s approval. He seeks clarification on the assets proposed to secure this loan and how public assets will be protected.
3. Historical Arrears: The letter queries the period over which these arrears accumulated and whether they were accrued before or after devolution. Alai also seeks to identify the key officials at Nairobi Water Services Company during the debt’s accumulation.
4. Interest Computation: Alai asks how the interest amount was calculated and the method of interest compounding used.
Alai’s letter underscores the legal framework for county borrowing, referencing Section 142 of the County Government Act and the Public Finance Management Act, which stipulate that county borrowing must be approved by the county assembly and set out in writing.
Given the severity of the allegations, Alai has urged the DCI to conduct a thorough investigation and take appropriate legal action against any individuals found responsible for financial mismanagement.
He emphasizes that such actions will safeguard employees’ interests and uphold the integrity of public financial management.