―一方 OFFICE OF THE AUDITOR OPE L po 0 tT 30084 00100, 1 IR R 1 21 Nv 2M2 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) STATE DEPARTMENT FOR WATER AND SANITATION PROJECT GRANT/CREDIT NUMBER: 60290 & 60300 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30,2024 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) (Leave this page blank) WATER AND S4NITATIONDEVELOPMENTPROJECT(WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 TABLE CONTENTS Page 1. A cronym s and D efinition of Term s...............................................................................................ii 2. Project Information and Overall Peormance,............................................................................... iii 3 Statement of Performance against Project's Predetermined Objectives ...................................xiv 4. Environmental and Sustainability Reporting .............................................................................Xvi 5& Statement of Project Management Responsibilities.....................................................................XiX 6- Report of the Independent Auditor on Financial Statements for WSDP. ................................... xx 7. Statement of Receipts and Payments for the Year Ended 30th June 2024. ...............................1 8. Statement of Financial Assets and Liabilities as at 30*t June 2024..............................................3 9- Statement of Cash flows for the year ended 30th June 2024 ........................................................4 10- Statement of Comparison of Budget and Actual Amounts for the Year ended 30th June 2024.5 11. S ignificant A ccounting P olicies ........................................................................................................6 12- N otes to the Financial Statem ents ............................................................................................... 13 13 . A n n e xe s ........................................................................................................................................... 23 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for ire financial year ended June 30, 2024 1. ACRONYMS AND DEFINITION OF TERMS CBK Central Bank of Kenya CLSG Conditional Liquidity Support Grant ESIA Environmental Social Impact Assessment ICPAK Institute of Certified Public Accountants of Kenya IDA International Development Association IMF international Monetary Fund IPSAS International Public Sector Accounting Standards lAs Implementing Agencies CT County Treasury NT National Treasury PFM Public Finance Management. PSASH Public Sector Accounting Standards Board WB World Bank WSP Water Service Providers Comparative FY Financial year preceding the current financial year. ii WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 2. PROJECT INFORMATION AND OVERALL PERFORMANCE 2.1 Name and registered office Name The project's official name is Water and Sanitation Development Project (WSDP), Objective The key objective of the project is to improve water supply and sanitation services in Selected coastal and north-eastern regions in Kenya. Address The project headquarters offices are in Nairobi City, Nairobi County, Kenya. The address of its registered office is Maji House, P.O. Box 4720-00100, Nairobi - Kenya Contacts: The following are the project contacts P.O. Box: 49720-0100 Telephone: (254) 716103 E-mail: ps@water.go.ke Website: www.water.qo.ke Ill WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Project information and overall performance (continued) 2.2 Project Information Project Start Date: The project start date is 9h March, 20 18 Project End Date: The project end date is 31.10.2025 Project Coordinator: The project Coordinator is Wilfred Amwata Project Sponsor: The project sponsor is the World Bank 2.3 Project Overview Line Ministry and State/ The project is under the supervision of the Ministry of Water, County Department Sanitation and Irrigation, State Department for Water and Sanitation Project number P156634 Strategic goals of the project The strategic goals of the project are as follows: (i) Increase Water and Sanitation coverage in selected Coastal and Northeaster Regions to serve 2 million people. (ii) Improve financial performance of Water Service Providers. (iii) Reduction ofNon-revenue water strategies. Summary of Project The project management aims to achieve the goals through the Strategies for achievement of following means: strategic goals (i) Implementation of Water Supply Infrastructure (ii) Implementation of Sanitation Infrastructure (iii) Development of Performance Improvement plans for Water Service Providers benefiting from the project Other important background The project covers selected Counties in the Coastal and North Eastern information of the project Regions. Areas that the project was The project was formed to intervene in the following formed to intervene problems/gaps: (i) Less hours of service of water supply (ii) Low Water Coverage in the target areas (iii) Low Sanitation coverage in the target in areas. Iv WATER AND SANITATION DEVELOPMENTPROJECT(WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 (iv) High Non-revenue water leading to low revenue collection and high operation and maintenance costs. Project duration 8 Years v WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statenents for the financial year ended June 30, 2024 Project Information and Overall Performance (Continued) 2.4 Bankers The following are the bankers for the project: i) Special purpose accounts at Central Bank a) Designated Account B (DA-A) Central Bank of Kenya ACCOUNT Number; 100394177 Nairobi b) Designated account A(DA-B) Central Bank of Kenya Account number; 1000394077 Nairobi c) Water Sanitation Project Account Central Bank of Kenya ACCOUNT Number; 1000457201 Nairobi ii) Commercial Banks a) Coast Water Works Development Agency Kenya Commercial Bank Account Number 1240218648 Mombasa Branch b) Water Sector Trust Fund Equity Bank Account Number; 0180280425687 Upper Hill Branch c) Northern Water Works Development Agency Kenya Commercial Bank Account Number; 1283235579 Garissa Branch d) Water Services Regulation Board National Bank Account Number; 01071032110300 Upper Hill Branch Vi WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Project Information and Overall Performance (Continued) e) KWALE Water and sewerage company Kenya Commercial BANK Account Number; 1240284225 Kwale Branch f) KILIFI Water and Sewerage Company Kenya Commercial BANK Account Number; 1239146469 Kwale Branch g) Malindi Water and Sewerage Company Kenya Commercial Bank Account Number 1236141776 Malindi Branch h) Taita Taveta Water and Sewerage Company Kenya Commercial BANK Account Number 1242765387 Voi Branch 1) Mombasa Water and Sewerage Company Equity Bank Account Number: 1560276782381 Mol Avenue Branch, Mombasa j) WAJIR Water and Sewerage Company Equiy BANK Account Number: 1030278635680 Wajir Branch k) Garissa Water and Sewerage Company Equity Bank Account Number; 0580279720179 Garrissa Branch vii WA TER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Reort and Financial Statements for the financial year ended June 30, 2024 2.5 1) Independent Auditor The project is audited by the; Auditor General Office of the Auditor General Anniversary Towers, University Way P.O. Box 30084 GPO 001000 NAIROBI, KENYA ii) Principal Legal Adviser The Attorney General State Law Office and Department of Justice Harambee Avenue P.O. Box 40112 City Square 00200 Nairobi, Kenya 2.6 Roles and Responsibilities The team is composed of the Project Coordinator, Accountant, Chain Supply Officer, M&E support person and supported by administrative staff. No Names Title designation Key qualification Responsibilities I. Julius K. Korir, BSC in Agricultural CBS Principal Secretary Economics Accounting Officer 2. Coordinate implementation of approved project Wilfred Amwata Project Coordinator BSC Civil Engineering activities. M& E Safeguard Higher Diploma in Support M& E, ESMF and Water David Thiongo support officer Engineering RPF Coordination. 4. Virginia W.Waweru Accountant B. Com and CPA(K) Processing of payments and preparing financial reports. 5. Diploma in supply Procurement and cSupport procurement and De.sOk chain management. loitc Derus Ouko logistic officer. logistic, viii WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 2.7 Funding summary The Project is for a duration of 8 years from 2017 to 2025 with an approved budget of 330.000,000314,285,428 equivalents to Kshs 37,613,263,721as as highlighted in the table below: ix ,л-, � _. _ � � � � � � � '� м1 �д'1 � ' iti [� д'' � o�Q t� й 4D г*] r�7' � � � � Г'� h7 et 4� !г1' � � � � � � й � � � � с '�' �э в:, � � � м чг°, � � га ° � � � � г�t г�i � � � � � т ср м r�,� � ci � er` �,^ с� г�+у ° м с� `�' г*i о, пч гч" м � гч r�1 � �� � � � � �� � � � � � � w � � с � ,� .-, w � �л � �4 � e f � t� � � Гг'1 l�i й,1 4� � � �+ i`�Ч ец .�. �+ � ST � �+�,""„ r�y .�`, � � Й � �, р �"ы Г'+ �'' тЧ � �i � �П � �7 �С1 � � � � � � � � � � � � � � м . � � � � � � � � '° � � ['�� '� � й '� �ы з, � � ° � �w � � � � � � � � � � � L ,'1 � � � � � � � � ����� �� � � � � � � �' �. � • � м {�} н` С3 G+ � � а� а� ' � � " с� � � � � r, � � _ �4 � о Сп � � � � � � � r;, r�a ,�, � � � �п_ г` �r�i � _ с-'�а с^� � с�о, ,� � � � � � '� �, r� � � � � � � � � � � � � � � � � м^ь �r � � � � �, N г� с*1 г� т � м � � � ra �'' �. � "� ri � � � �' ,� � й � � � � � � �г т '_" � � � � � � � и о �r. � _ � .� � � � � �ж � � � � � � � � � � � � � � � � �� � м � � � � С�.й {+�,j � е � � � � � �' � �г; r�. � "� L � Q'� � °� � � ^ г�i гч � � � � � � � �� _ -� � � . � � q� 'и � � � � а � '� � � �� � � � � � � е � ,� � � � �. у о � � � -� � ы � � _ � � � � � � � � .� � °� � о � о � � � �, Г� � , � � �., С7 Н WATER AND SANITATIONDEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statemen0for the !!!ancialyear ended June 30,2024 Project information and overall performance (continued 2.8 Summary of Overall Project Performance: i) Budget performance against actual amounts for the current year andfir cumulative to-date, t 7 2023/24 FY 9,1259000,000 8,927,812 2 110 97.84% Cumulative To date 32,981,000,000 28,038,276,941 85.01% ii) Physical progress based on outpuo and outcomes since project commencement, The overal I project progress is 64%. This includes the financing gap for the completion of Baricho Lot 3 and Replacement of three boreholes in Baricho well field which have been completed. This has resulted in supply of 33,OOOm3/day providing water supply to 220,000 people. The other works contracts are at different levels of implementation and upon completion will contribute to the project development objective results of improving water and sanitation in the, Coastal and North-eastern regions to serve a total of 2,023,700 people, iii) Indicate the absorption ratefor each year since the commencement of the prof ect. 4 *0440 4 'A 7 'I 4 2018/2019 3,041,000,000 442,000,000 14.5% 2019/2020 1,350,000,000 1,066,788,629 79.0% 2020/2021 8,580,000,000 8,457,675,494 - 9.5% 2021/2022 5,317,500,000 3,501,097,215 65.84% 2022/2023 5,567,500,000 5,499,999,999 99,9% 12023/2024 9,125,000po 8,927,812,110 97.84% iv) List the implemeniation challenges and recommend the next stepy. a) Initial delay in finalization of County Participation Agreements -No action xii WATER AND SANITA TIONDEVELOPMENTPROJECT (WSDP) Ann al Report and Financial Statements for the financial year ended June 30, 2024 b) Slow movement of funds to Water Service Provider Project Accounts. -Funds to be transferred within ten (10) days. A notification to be sent to all MDS immediately money is transferred to CRF account. c) Delay in finalization of Procurement of project consultants - Bank procurement team to guide the IAs on how to address procurement comments. For the supervising consultants, this is on the critical path and urgent guidance required especially for Kwale. d) COVID -19 pandemic that affected progress of the planned activities- This is a continuing effect, all implementing agencies have devised mechanisms that comply with the issued guidelines that allows progress of the planned activities. e) High staff turn-over of project team members that has led to slow actualization of the planned activities - IA's to put in place mechanisms to motivate and retain PCU staff for the entire project period. f) Delay in submitting supporting documents by IAs for expenditure incurred- More FM trainings, g) Some IA's are not able to install the project goods purchased as the installation package did not incorporate installation component. To achieve the intended objective of the goods purchased, installation must be expedited. It is therefore proposed that the IA's expedite completion of the procurement process to ensure installation of procured goods finalized. h) Delay in releasing budget amount allocated for RAP implementation- [A's to engage the County Governments to ensure timely release of RAP budget as delay in this will affect commencement and progress of works contracts. 2.9 Summary ofProject Compliance: In implementation of the project, no non-compliance cases have been experienced with applicable laws and regulations. i) The delay in experience in enactment of County Government Additional Allocations Act has affected delay is flow of funds and ultimately delay in completion of the project. This has increased the cost of contracts on time related activities. i i). In relation to County Government Additional Allocations Act, timely enactment will alleviate additional costs of the ongoing contracts. xiii WA TER AND SANITA TION DE VELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 3. Statement of Performance against Project's Predetermined Objectives Introduction Section 81(2)(f) /Section 164 (2)( of the Public Finance Management Act, 2012, requires that the Accounting Officer include a statement of the national/county government entity's performance against predetermined objectives at the end of each financial year. The key development objectives of the project's agreement/ plan are to: a) Improve water supply and sanitation services in select coastal and north eastern regions in the Republic of Kenya and b) Improve the financial performance of water services providers and provide support to COVID-19 emergency interventions Progress on the attain ment of strategic development objectives To implement and cascade the above development objectives to specific sectors, all the development objectives were made specific, measurable, achievable, realistic, and time- bound (SMART) and converted into development outcomes. Attendant indicators were identified to track progress and performance measurement. xiv -，뾰· WA TER AND SAIVITA TIONDE VELOPMENT PROJECT (WSDP) Annual Report and Financial Statementsfor thefinancialyear ended June 30,2024 4. Environmental and Sustainability Reporting Given the importance of water for life and society, it is natural that this is identified as a central issue for Water companies and to manage responsibly through d-ieir CSR practices to the benefit of local populations, This is happening in the projects being implemented even though slowly. Indeed, as we have seen that water is becoming increasingly focused as a global and local issue, it has also become more focused as a CSR issue by the water companies. We can conclude that there is a lot of remaining opportunity as the private sector is not engaged at a level proportional to the severity of the issue. This provides an opportunity for companies to do better for society in an area, which is oritical to all their stakeholders resulting in significantly strengthened relations and brand visibility. However, this is not all. Given the criticality of water, there are also huge opportunities for Water companies to engage in a way that adds great value for society, while also being profitable and lowering their risk levels considerably. With the recent announcement of the new Sustainable Development Goals and the recognition of the role of the private sector in achieving the goals, private sector leaders are aligning their strategies to support the implementation of Goal 6 - Ensure availability and sustainable management of water and sanitation for all. This initiative inspires Water companies and all players in the water sector to work actively with their own footprint, while engaging in transparency and collective action for more sustainable water management. Water and Sanitation is being developed to increase water and sanitation coverage that will benefit 2million Kenyan's in the target areas that will transform their living standards with reduced cases of waterborne diseases. xv! WA TER AND SANITA TION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 i.Sustainability strategy and profile To ensure sustainability in operation of the developed water and sanitation infrastructure, Financial and economic analysis have been carried out to determine the financial benefits against operation costs expected during operation of the projects. Energy saving systems have been considered at design stage that will lower the operation costs and to minimize Non-revenue water losses, master meters have been proposed in manageable District Metering Areas coupled with non-revenue water performance contracts. ii. Environmental performance Implementation of the project activities strictly follows the provisions of the developed Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) and Environmental and social safeguards will be implemented in accordance with the Kenyan legislation. Environmental licenses are delivered by NEMA in due time prior to implementation of works, iii. Employee welfare Assessment of the implementing agencies has been done and training needs incorporated in the annual work plans. During implementation the contractors comply with Occupational Safety and Health Act to ensure safety of the workers iv.Marketplace practices- a) Responsible Supply chain and supplier relations- The project strictly follows the banks procurement guidelines coupled with the provisions of Procurement and Disposal Act 2015 that promotes competitive bidding process. b) Responsible ethical practices By placing anti-corruption posters in all project sites and enhanced reporting and addressing corruption incidences. c) Regulatory impact assessment Continuous stakeholder monitoring of the projects to ensure compliance to Social and Environmental safeguards including mitigation measures. Xvii WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Community Engagements The project entails community participation for a more inclusive engagement in order to incorporate their comments during planning and design of the projects. The communities are also engaged in carrying out unskilled labour works that improves their economic wellbeing. The project strictly follows the banks procurement guidelines coupled with the provisions of Procurement and Disposal Act 2015 that promotes competitive bidding process. xviii WATER AND SANITA TION DE VELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 5. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The Principal Secretary for the Ministry of Waler, Sanitation and Irrigation, State department of Water and Sanitation and the Project Coordinator Water and Sanilation Development are responsible for the preparation and presentation of the Project's financial statements, which give a true and fair view of the state of affairs of the Project for the financial year ended on June 30, 2024. This responsibility includes (i) Maintaining adequate financial management arrangements and ensuring that these continue to be effective throughout the reporting period, (ii) Maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the project, (iii) Designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud,(iv) safeguarding the assets of the project, (v) Selecting and applying appropriate accounting policies and (v) Making accounting estimates that are reasonable in the circumstances. The Principal Secretary State department of Water and Sanitation and the Project Coordinator Water and Sanitation Development accept responsibility for the Project's financial statements, which have been prepared on the Cash Basis Method of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. The Principal Secretary for the Ministry qf Water, Sanitation and Irrigation, State department of Water and Sanitation and the Project Coordinator Water and Sanitation Development are of the opinion that the Project's financial statements give a true and fair view of the state of the Project's transactions during the financial year ended June 30, 2024, and of the Project's financial position as at that date. Principal Secretary for the Ministry of Water, Sanitation and Irrigation, State department of Water and Sanitation and the Project Coordinator Water and Sanitation Development further confirm the completeness of the accounting records maintained for the Project, which have been relied upon in the preparation of the Project financial statements and the adequacy of the systems of internal financial control- The Principal Secretary for the Miniwty of Water, Sanitation and Irrigation, State department of Water and Sanitation and the Project Coordinator Water and Sanitation Development confirm that the Project has complied fully with applicable Govement Regulations and the terms of external financing covenants and that Project funds received during the financial year under audit were used for the eligible purposes for which they were intended and were properly accounted for. Approval of the Project Financial Statements The Project financial statements were approved by the Pripcipa( Secretary for the State Department for Water and Sanitation and the Project Coordinator on \ _ 2024 and signed by: Julius Korir,CBS Wilfred Amwata Jeniffer Owino Principal Secretary Project Coordinator Head of Accounting Unit ICPAK NO: 13143 xix REPUBLIC OF KENYA HEADQUARTER5 Telephone: +254(20) 3214000 Anniversary Towers Emaili: info @oagkenya.go. ke AnvrayTwr Website:vvww.oagkenya.go.keMorvaSet OFFICE OF THE AUDITOR-GENERAL NAIROBI EnhanciiigAccountability REPORT OF THE AUDITOR-GENERAL ON WATER AND SANITATION DEVELOPMENT PROJECT (IDA CREDIT NO.60290 AND 60230-KE) FOR THE YEAR ENDED 30 JUNE, 2024 - STATE DEPARTMENT FOR WATER AND SANITATION PREAMBLE I draw your attention to the contents of my report which is in three parts: A. Report on Financial Statements that considers whether the financial statements are fairly presented in accordance with the applicable financial reporting framework, accounting standards and the relevant laws and regulations that have a direct effect on the financial statements; B. Report on Lawfulness and Effectiveness in the Use of Public Resources which considers compliance with applicable laws, regulations, policies, gazette notices, circulars, guidelines and manuals and whether public resources are applied in a prudent, efficient, economic, transparent and accountable manner to ensure the Government achieves value for money and that such funds are applied for the intended purpose; and, C. Report on Effectiveness of Internal Controls, Risk Management and Governance which considers how the entity has instituted checks and balances to guide internal operations. This responds to the effectiveness of the governance structure, risk management environment and internal controls, developed and implemented by those charged with governance for orderly, efficient and effective operations of the entity. An Unmodified Opinion is issued when the Auditor-General concludes that the financial statements are fairly presented in accordance with the applicable financial reporting framework. The Report on Financial Statements should be read together with the Report on Lawfulness and Effectiveness in the Use of Public Resources, and the Report on Effectiveness of Internal Controls, Risk Management, and Governance. The three parts of the report are aimed at addressing the statutory roles and responsibilities of the Auditor-General as provided by Article 229 of the Constitution, the Public Finance Management Act, 2012 and the Public Audit Act, 2015. The three parts of the report when read together constitute the report of the Auditor-General. REPORT ON THE FINANCIAL STATEMENTS Opinion I have audited the accompanying financial statements of Water and Sanitation Development Project-IDA Credit No.60290 and 60230-KE, set out on pages 1 to 25, Report of the Auditor-General on Water and Sanilation Development Project flDA Credit No.60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitatian which comprise the statement of financial assets as at 30 June, 2024 and the statement of receipts and payments, statement of cash flows and statement of comparison of budget and actual amounts for the year then ended and a summary of significant accounting policies and other explanatory information in accordance with the provisions of Article 229 of the Constitution of Kenya and Section 35 of the Public Audit Act, 2015. I have obtained all the information and explanations which to the best of my knowledge and belief, were necessary for the purpose of the audit. In my opinion, the financial position of Water and Sanitation Development Project-IDA Credit No.60290 and 60230-KE, as at 30 June, 2024 and of its financial performance and its cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Public Finance Management Act, 2012, Financing Agreements No 6029 and 6030 both dated 21 June, 2017 between the Republic of Kenya and the International Development Association (IDA). In addition, the special accounts statements present fairly, transactions for the year, and the closing balance have been reconciled with the books of account. Basis for Opinion The audit was conducted in accordance with International Standards for Supreme Audit Institutions (ISSAls). I am independent of the Water and Sanitation Development Project (WSDP) Management in accordance with ISSAI 130 on the Code of Ethics. I have fulfilled other ethical responsibilities in accordance with the ISSAI and in accordance with other ethical requirements applicable to performing audits of financial statements in Kenya. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Emphasis of Matter Budgetary Control and Performance The statement of comparison of budget and actuals reflects budgeted final receipt of Kshs.9,125,000,000 and actual receipt on comparable basis of Kshs.9,340,298,608 resulting into excess receipts of Kshs.215,298,609.Similarly, the statement of comparison of budget and actual amounts for the year ended 30 June, 2024 reflects budgeted expenditure of Kshs.9,125,000,000 and actual expenditure of Kshs.5,851,989,869 resulting to under absorption of Kshs.3,273,010,131 or 35%. The under-expenditure affected the planned activities and may have impacted negatively on service delivery to the public. My opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in my professional judgement, are of most significance in the audit of the financial statements. Except for the matters described in Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No.60290 and 60230-KE) for the year ended 30.Iune, 2024 - Statc Department for Water and Sanitation 2 the Basis for Qualified Opinion, I have determined that there are no other key audit matters to communicate in my report. Other Matter Unresolved Prior Year Audit Issues In the audit report of the previous year, several issues were raised in the Report on Financial Statements, Reports on Lawfulness and Effectiveness in the use of Public Resources and Report on Effectiveness of Internal Controls, Risk Management and Governance- However, the Management has not resolved the issues. Further, the status of follow-up on audit recommendation has not been included in the financial statement as required by the reporting template. No reason has been provided for failure to address these matters. Other Information The Management is responsible for the other information set out on page iii to xix which comprise of Project information and overall performance, Statement of performance against project's predetermined objectives, Environmental and Sustainability Reporting and Statement of Project Management Responsibilities. The Other Information does not include the financial statements and my audit report thereon. In connection with my audit on Water and Sanitation Development Project-IDA Credit No.60290 and 60230-KE financial statements, my responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work I have performed, I conclude that there is a material misstatement of this Other Information, I am required to report that fact. I have nothing to report in this regard. REPORT ON LAWFULNESS AND EFFECTIVENESS IN THE USE OF PUBLIC RESOURCES Conclusion As required by Article 229(6) of the Constitution, based on the audit procedures performed, except for the effects of the matters described in the Basis for Conclusion on Lawfulness and Effectiveness in the Use of Public Resources section of my report, I confirm that nothing else has come to my attention to cause me to believe that public resources have not been applied lawfully and in an effective way. Basis for Conclusion 1.0 Kwale Water and Sewerage Company 1.1 Construction of Collector and Transmission Lines, Borehole Drillings and Auxiliary Works The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Report of the A uditor-General on Water and Sanitation Development Project (IDA Credit No 60290 and 60230-KE) for the year ended 30 June, 2024 - State Department,for Water and Sanitation 3 Kshs.37,175,233 for the construction of collector and transmission lines, borehole drillings and auxiliary works vide contract No: KE-KWAWASCO-206973-CW-RFB and contract agreement dated 14 September, 2021 at a contract sum of Kshs.688,606,878. The contract was supposed to run for a period of 1 year with 180 days defects liability period with a completion date of 30 September, 2022 but later two extensions have been made extending the completion date to 30 March, 2025. An amount of Kshs.198,969,723 has been paid to the contractor being 29% of construct sum. However, scrutiny of interim payment certificate 6 revealed the total value of interim payment of Kshs.107,712,718 and kshs.10,389,458 was deducted being 10% retention money. However, recalculation of the same revealed Kshs. 10,771,271 thus understating the retention by Kshs.381,813. During project verification carried on September, 2024, the status of the project was at 28.97%. In the circumstances, the projects delay may result to escalated costs for completion and value for money may not be obtained. 1.2 Payments Exceeding the Contract Ceiling Amount and Expired Contract The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.3,920,900 for Consultancy services commencing 1 September, 2021 and continuing through 22 October, 2022 or any other period as may be subsequently agreed by the parties in writing. As per clause (3) (A) of the contract, the client shall pay the consultant an amount not to exceed a ceiling of Kshs.7,150,000- This amount had been established based on the understanding that it includes all of the consultant's costs and profits as well as any tax obligation that may be imposed on the consultant. Where such tax obligations are enforceable in Kenya, the cost of meeting the tax obligations will be paid by the consultant. The payments made under the Contract consist of the Consultant's remuneration and of the reimbursable expenditures. Review of the payments made to the consultant revealed that the Management had made payments amounting to Kshs.18,150,000 (inclusive of VAT), hence exceeding the ceiling by Kshs.11,000,000 or 154 % of the ceiling amount. Further, the contract for the provision of consultancy services was supposed to end on 22 October, 2022. The contract period has since lapsed with no evidence of renewal provided despite the consultant still performing the services as indicated on the contract agreement. In the circumstances, the value for money of Kshs.3,920,900 could not be confirmed. 2.0 Kilifi-Mariakani Water and Sewerage Company 2.1 Water Distribution Works for Mtwapa Town The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No. 60290 and 60230-KE) for the year ended 30.Iune, 2024 - State Department for Water and Sanitation 4 Kshs.171,998,269 for Water distribution works for Mtwapa Town at a Contract sum of Kshs.850,001,993. The works commenced on 25 June, 2021 with expected completion on 30 September, 2022. This has been severally revised to 30 May, 2024 and defects liability period to 30 May, 2025. As at 30 June, 2024 Kshs.433,935,883 had been paid to the contractor being 51.05% payment for construction works. However, as at time of physical inspection in September, 2024, the project completion was at 63.94% which was nine months to the expiry of the extended completion period and the contractor was not on site. Further, 10.3KM water distribution works which includes laying of pipes and chambers from Mtepeni reservoir to Mtwapa town was not done and 3 chambers verified were built however, the gate valve was not installed. No marker posts were erected and water connection was not yet done and it's doubtful if the works will be complete. Further, the performance security, insurance of works and contractor's equipment, third party insurance was not provided for audit review. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs. 171,998,269 could not be confirmed. 2,2 Increased Consultancy Costs for Services for the Design and Supervision of Water Supply and Sanitation Works The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs,3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements- Included in this amount is Kshs.36,838,348 relating to services for the design and supervision of Water Supply and Sanitation works with Consulting Engineers in Joint Venture with Consulting Engineers on 17 February, 2021 vide contract agreement Contract no:KE-KIMAWASCO-74960-CS- QCBS for review detail design, bidding documents, Environmental and social safeguards document, construction supervision of works contract and technical support. The contract period was 31 months (1) Design and reviews (1 Months) (ii) Construction Supervision (18) months (iii) Defects Liability (12) Months at a contract price of Kshs.42,377,195.28 and indirect local taxes chargeable of Kshs.6,780,352-24 amounting to Kshs.49,157,546.52, Further, review of invoices supporting the payments revealed that the Key expert and non-Key expert had been paid total claims of ninety-five (95) and fourty-six (46) days input against contracted fifty-four (54) and twenty-two (22) days input for key expert and non-key expert respectively resulting to additional cost of Kshs.22,738,188 for key expert and Kshs.10,949,612 totalling Kshs.33,678,800.56. Further, reimbursable expenses of Kshs.686,000 not supported by any verifiable documents, therefore, the eligibility of the expenditure could not be verified. In the circumstances, the regularity and value for money Kshs.36,838,348 could not be confirmed. Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No- 60290 and 60230-KE) fbr the year ended 30 June, 2024 - State Department for Water and Sanilation 5 3.0 TAVEVO Water and Sewerage Water Company 3.1 Delay in Completion of Construction of Storage Warehouse for Pipes, Fittings and Portable Equipment Lot I The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.975,746 for the construction of storage warehouse for pipes, fittings and portable equipment Lot I under Contract No. KE-TAVEVO-175703-CW-RFB at a contract price of Kshs.32,884,390 on 4th August, 2021. The commencement date of the construction was 18th August, 2021 and the intended completion date was 17 August, 2022. The extension of time granted to the contractor expired on 31 July, 2024. However, physical verification of the project which was conducted in September, 2024, revealed that works were still ongoing with an overall progress of 85%. Delay in completion of the project has occasioned extra costs since it is not clear when the project will be completed due to the pending works. Further, there was no documentation provided for extension of time. In the circumstances, the value for money could not be confirmed. 3.2 Abandoned and Stalled Works for Construction of Ablution Blocks TAVEVO Water and Sewerage Company entered into a contract agreement with contractor on 18 June, 2020 for the Construction of 8No. ablution blocks in Voi, Taveta, Wundanyi, Bura and Maungu vide contract number KE-TAVEVO-151330-CW-RFB at a contract price of Kshs.90,013,162. The contract period was expected to be eight (8) months. The contract works commenced on 15 April, 2021 with an expected completion date on 15 December, 2021. The completion date was extended to 31 December, 2023. As at 30 June, 2024, the contractor had been paid an amount of Kshs-38,353,005, an equivalent of 42.6% of the contract sum. The contract was terminated on 11 January, 2024 due to the abandonment of the works and non-performance by the contractor. Tavevo Water and Sewerage Company requested for retendering of the contract by the World Bank which has not yet been approved. In-addition, it was noted that the performance security expired on 14 July, 2023 prior to the termination of the contract and Tavevo could not enforce it despite issuing demand notices to Rafiki Microfinance Bank on 15 December, 2023 and on 19 January, 2024. Further, according to the progress report of September 2024, the overall percentage of completed works was 54%. As at the time of audit inspection conducted in September 2024, it was observed that the project had stalled at various stages and various works were pending and others had not started. In the circumstances, the value for money for the total expenditure of Kshs.38,353,004 could not be confirmed. Report of the Auditor-General on Water and Sanitation Development Prqject (IDA Credit No.60290 and 60230-KE) for the year ended 30 June, 2024 - State Departmentfor Water and Sanitation 6 3.3 Contract for the Supply of Upgrade of Water Distribution Systems to Voi, Mwatate, Wundanyi and Taveta The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.54,237,626 for the upgrade of water distribution systems for Voi, Taveta, Mwatate and Wundanyi towns at a contract price of Kshs.859,714,132. The contract commenced on 25 March, 2021 with an expected completion date of 25 December, 2023, which was revised to 31 October, 2024. Physical inspection in the month of September, 2024, revealed that the percentage of completion of the project was only 73% and major works of construction of chambers had not started. In the circumstances, the value for money of Kshs.54,237,626 could not be confirmed. 3.4 Construction and Equipping of a Combined Water and Waste Water Quality Testing Laboratory The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.20,436,685 for completion works for construction and equipment of a combined water and waste water quality testing Laboratory for contract price of Kshs.47,187,165 inclusive of all taxes and duties with intended completion period of nine (9) Months at Voi. The Contract agreement No. NCBNO:KE-TAVEVO-338455-CW-FRB was entered on 22 June, 2023 between TAVEVO Water and Sewerage Company Limited and commenced on 6 January, 2023 with initial contract completion date of 25 March, 2024. However, the contract was extended with 128 days to 30 July, 2024 and end of defect liability period as 30 January, 2025. However, the bill of quantity includes prime cost and provisional of Kshs.28,840,000 which translate to 61% of the total bill of quantity of Kshs.47,187,165 for construction and equipping of a combined water and waste water quality testing laboratory but the equipment was not incorporated in the bill of quantity. The project was initially awarded to construction company at Kshs.46,998,650 vide a tender no KE-TAVEVO-170154-CW-RFB for construction and equipping of combined water and Waste water quality monitoring Laboratory at Voi on 24 June, 2021 with initial interim payment certificate 1 of Kshs.9,213,730 The percentage of completion for construction and equipping of a combined water and waste water quality testing Laboratory Project at Voi was at 89 % as the time of audit verification done in September, 2024 with remaining pending external works of Kshs.1,074,000. However, tendering for the laboratory equipment had not been done. In the circumstances, the projects delay may result to escalated costs for completion and value for money may not be obtained. Report of the Auditor-General on Water and Sanitation Development Prqjecl (IDA Credit No.60290 and 60230-KE) for the year ended 30 June. 2024 - State Department for Water and Sanitation 7 3.5 Abandoned Construction of Office Block at Voi Town Lot II The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.1,840,279 for the construction of office Block at Voi Town Lot II at a contract price of Kshs-78,236,141 with initial project completion date stated as 18 August, 2022 at contract No. KE-TAVEVO-175703-CW-RFB on 30 July, 2021. Physical inspection of the project conducted in September, 2024 revealed that the contract was terminated on 25 January, 2024 after expiry of extension of due for 31st December, 2023. It was noted the Project Manager's considered opinion that the contractor had no capacity to complete, after issuing the letter of termination, the project manager prepared a final account for the project with overall progress of works was estimated at 23%. In addition, performance guarantee REF: RMB IPB/TM/1005-22 for Kshs.7,823,614.00 expired on 1 December, 2023. However, the Bank did not encash the performance bond in favour of TAVEVO Water and Sewerage Company due to non- performance of the contract. The works yet to be done include constructing the roof/second floor slab, installing floor finishes, wall finishes, windows, doors, joinery fittings, and carrying out the external works. However, the retendering of pending works not yet done. In the circumstances, the projects delay may result to escalated costs for completion and value for money may not be obtained. 4.0 Malindil Water and Sewerage Company 4.1 Contract for Water Distribution Works for Watamu Town-Lot 2 B The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.48,339,334 for Water Distribution Works for - Lots 26 -Watamu Town vide contract No:KE-MAWASCO-156444-CW-RFB for contract period of 18 Months (78 Weeks) and 12 Months (52 weeks) Defect liability period. The contract was signed a Contract valued Kshs,215,114,669 on 15 September, 2020 with construction company. The contract commenced on 10 February, 2021 with a completion date of 9 August, 2022. As per the status report, the contract was extended up to 31 October, 2023 and defects liability period to end on 2 December, 2024, however, the addendum extending the original contract period was not provided for audit review. In the circumstances, the value for money may not be obtained. 4.2 Construction of Faecal Sludge Treatment Plant in Watamu Town Lot 3B The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Report qf the Auditor-General on Water and Sanitation Development Project (IDA Credit No.60290 and 60230-K5) for the year ended 30 June, 2024 - State Department for Water and Sanitation 8 Kshs.37,133,825 for construction of one (1) Faecal Sludge Treatment Plant in Watamu Town-Lot 3 at a Contract price of Kshs.226,017,054 vide Contract NO.KE-MAWASCO 69899-CW-RFB 236802-CW-RFB on 27 October, 2021. However, contract implementation period was revised by 24 months (730 days) from 17 November, 2022 to 17 November, 2024 and end of defects liability period to 31 October, 2025 the original contract period was extended from 12 months to thirty-six (36) months. As the time on audit in September, 2024 contractor's overall progress was estimated at 50.8%, In the circumstances, the value for money of Kshs.37,133,825 could not be confirmed. 4.3 Delay In Completion of Faecal Sludge Treatment Plant in Malindi Town The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.32,203,377 for construction of waste to value faecal sludge treatment in Malindi Town-lot 3A to a Contractor vide contract No: KE-MAWASCO-236802-CW-RFB and contract agreement dated 12 October, 2021 at a contract sum of Kshs.587,480,228.64. The contract was supposed to run for a period of 12 calendar months with 12 months defects liability period with a completion date of 1 June, 2023 but later two extensions have been made extending the completion date to 31 December, 2024. An amount of Kshs.127,316,653 had been paid to the contractor being 21.7% payment of construction of works. However, the following observations were made; Further, the Water company approved purchase of Isuzu D-Max TFS85 3L double cab luxury manual vehicle through ref. No. MAWASCO/MLD/C175NOL.1/22406 dated 28 September, 2022 at a cost of Kshs.6,900,000 from supplier. Further, Ref No. DMP/SITE/LOT3A/CORR/CON/VOL.1/2022019R dated 6 October, 2022 by the deputy resident engineer instructs the contractor to purchase the vehicle and should be registered jointly in the name of the contractor and client. However, logbook for motor vehicle KDK 679 A provided was in joint ownership of Prime Bank Limited and the contractor. Physical verification carried out in September, 2024 revealed that the project was at 30% completion time. It was therefore evident that the project might not be completed by 31 December, 2024. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs.32,203,377 may not be obtained. 4.4 Irregular Variation of the Contract Sum for Consultancy Services for Design The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.29,519,035 for provision of Consultancy Services for design review, implementation of ESIA/RAP and construction supervision of water and sanitation works on Report of the Auditor-General on Waler and Sanitation Development Project (IDA Credit No. 60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitation 9 15 January, 2020 by Malindi Water and Sewerage Company. The initial contract price was Kshs.76,959,355 which was revised upwards to Kshs.177,739,431 resulting to an increment of Kshs.100,780,075.50 or 131% which exceeds 15%, contrary to the procurement law. This is contrary to Section 139(1) (a) 4 (d) and (e), 5 and 6 of the Public Procurement and Asset Disposal Act that states an amendment or a variation to a contract resulting from a procurement proceeding is effective only if the variation or amendment has been approved in writing by the respective tender awarding authority within a procuring entity and that any variation of a contract shall only be considered if the cumulative value of all contract variations for goods do not result in an increment of the total contract price by more than twenty five percent of the original contract price and the cumulative value of professional services does not result in an increment of the total contract price by more than twenty-five per cent of the original contract price. Further, an accounting officer of a procuring entity shall submit a quarterly report of their varied or amended procurement contracts to the Authority and that where variations result in an increment of the contract price by more than twenty-five percent, such variations shall be tendered for separately. In the circumstances, the value for money of Kshs.29,519,035 could not be confirmed. In addition, Management is in breach of the law. 5.0 Mombasa Water and Sewerage Company 5.1 Delay in Construction of Ablution Blocks in Mombasa County The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.27,476,077 for construction of 15no. ablution blocks in Mombasa County on 10th September, 2021 vide Contract No. KE-MOWASCO-228804-CW-RFB at a contract sum of Kshs.196,530,589.80. The contract commenced on 21 October, 2021 and it was supposed to be completed on 20 April, 2022. Extension of the contract period was granted and the date revised to 31 December, 2023 through addendum 1. On 15 April, 2024, the contractor requested for extension of time due to variation orders and delayed payments, hence the completion date was revised to 30 September, 2024 as per the signed addendum no.2- Physical verification in September, 2024 revealed that the progress of the project was at 78,46% and it could not be determined if the remaining works will be completed within the revised timelines. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs.27,476,077 may not be obtained. 5.2 Improvement of Storm Water Outlets and Combined Sewer Overflows in Mombasa Island The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No.60290 and 60230-KE) for the year ended 3 0.une, 2024 - State Departmentfr Water and Sanitation 10 civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.56,027,767 for improvement of storm water outlets and combined Sewer overflows in Mombasa Island on 9 December, 2019 vide Contract No. KE-MOWASCO-16772-CW- RFB at a contract sum of Kshs.459,091,414.80. The contract commenced on 11th May, 2021 and it was supposed to be completed on 11 November, 2022. Extension of the contract period was granted and the date revised 31 December, 2023 through addendum 1. On 11 April, 2024, the contractor requested for extension of time due to delay in possession of sites, delay in provision of information and delayed payments, hence the completion date was revised to 30 September, 2024 as per addendum 2. As at the time of physical verification in September, 2024 the progress of the project was at 66.2% and it could not be determined if the remaining works will be completed will be completed within the revised timelines. Further, physical verification in September, 2024, it was noted that Tudor Moroto and Tudor Burukenge outfalls had no access road for vehicles to the site, and construction of vehicle turning area and access road were some of the works to be carried out according to bill of quantities. It remains unclear how the solid waste will be carried out from the stormwater sites for disposal. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs.56,027,767 may not be obtained. 5.3 Rehabilitation and Extension of Mombasa Water Supply Distribution Works The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works.as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.254,768,446 for the rehabilitation and extension of Mombasa water supply distribution works at a contract sum of Kshs.749,200,538. The contract commenced on 11 May, 2021 and was expected to be completed by 11 November, 2022 but additional period of 25.6 months was agreed upon on 5 March, 2023 vide amendment agreement NO.1 extending contract period to 29 December, 2024. Further, the amendment increased the scope of works and contract price by Kshs.66,028,641 revising the original contract price upwards from Kshs.749,200,538 to Kshs.81 5,229,180 inclusive of VAT occasioned by delay and consequent extension of time by 25.6 months, the contractor had to cater for attendant services to the project manager's representative therefore additional funds were required for time related services. The overall percentage of completion of the project was 74.98% as at the time audit verification carried out in September, 2024. In addition, it was revealed that pipes and fittings were 100% delivered but pipeline installation and miscellaneous works were still pending at 37.30% and below listed sites were not available to the contractor. It could not be established why the contracted sites were still not available causing delays in implementation of the project. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs.254,768,446 may not be obtained. Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No.60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitation 11 5.4 Additional Costs Occasioned by Delay in Completion of Kipevu Waste Water Treatment Plant and Additional Costs The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.28,652,709 for rehabilitation of Kipevu Waste Water Treatment Plant (WVVTP and pumping stations) vide contract No. KE-MOWASCO16771-CW-RFB at a contract sum of Kshs.240,623,534. However, the variation order No.1 amounting to Kshs.7,800,000 for purchase of twelve (12No.) new 45kW aeration ditches motors did not form part of the approved works under the bill of quantity which was approved on 22 February, 2022 varying the contract sum upwards to Kshs.243,217,752. The project commenced-on 11 May, 2021 with original completion date expected to be 16 August, 2023, However, the contract duration was extended to 30 December, 2024 delaying the contract period by 1,116 days which resulted to additional cost on extended preliminaries of Kshs.5,806,408 in respect to the project manager costs under Bill No.1, In addition, at the time of audit verification in September,2024, the overall work progress was at 65.15%. Further, it was noted that some of the works that had been recommended for rehabilitation especially the electro-mechanical works were beyond repair. Therefore, a secondary assessment of all previously recommended repairs was carried out which recommended new scope for electro-mechanical replacements in addition to other works at Kipevu water waste treatment Plant and pumping stations with a proposed financial cost implication of Kshs.105,350,656 revising the original contract price to Kshs.346,091,690. Additionally, it was noted that Asbestos roof removal requires a specialist and Portriez road rehabilitation and assessed works are yet to be approved by the World Bank since the works were omitted from the scope of works availed to the contractor. In the circumstances, delay in projects implementation may result to incremental costs and intended purpose of the project may not be achieved. 6.0 Construction of Short-Term Water Distribution System Lot 1A at Mombasa North Mainland by Coastal Water Works Development Agency The statement of receipts and payments reflects an amount of Kshs.3,829,564,728 for acquisition of non-financial assets which includes Kshs.3,445,540,422 for construction of civil works as disclosed in Note 6 to the financial statements. Included in this amount is Kshs.155,805,920 for the construction of Mombasa North Mainland Short-Term Water Distribution System Lot 1A at a contract sum of Kshs.516,433,325 by Coastal Water Works Development Agency. This was later revised to Kshs.781,423,747 vide contract no. KE-CWSB-150896-CW-RFB. The project was expected to be completed within a period of eighteen (18) months. The works commenced on 3r May, 2021 with an expected completion date of 25th October, 2022. However, four extensions later the project completion date was extended to 31 December, 2024. As at 30 June, 2024, the contractor had been paid an amount of Kshs.571,765,209 equivalent to 64.3% of the contract price. According to the Report ofthe Auditor-General on Water and Sanitation Development Project (IDA Credit No. 60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitation 12 August monthly progress report, actual physical progress work was 68% with an estimated progress 90.8% for pipe laying works. During project verification carried on September, 2024, the original scope of work was at 93% and the additional scope was at 46.2%. Further, a total of 112,269 meters out of 119,269 meters of Pipelines in the Original Contract had been laid which is 93.6% of the pipelines. As for the Additional scope, 26,564 meters out of 47,716 meters had been laid, which is 55.7% of the pipelines to be constructed. In the circumstances, the projects delay may result to escalated costs for completion and value for money of Kshs-571,765,209 may not be obtained. 7.0 Avoidable Costs-Interest on Delayed Payments Statement of receipts and payments and Note 7 to the financial statements shows a figure of Kshs.3,935,994,556 relating to acquisition of non-financial assets. Included in this figure is an amount of Kshs.3,445,540,422 relating to construction of civil works which include an amount of Kshs.22,472,734 being interest on delayed payments for three (3) projects which are avoidable costs. Value of Interest on Delayed Implementing Contract Amount Payment Project Details Agency Kshs. Kshs. Water distribution works for Mawasco 707,473,818 4,281,176 Malindi, Gongoni and Mambrui 2nd Baricho- Kakuyuni Water CWWDA 1,994,872,823 13,107,004 Supply Project Water distribution works in Kimawasco 218,182,910 5,084,554 Watamu- Lot 2B Total 22,472,734 In the circumstances, the value for money on the Kshs.22,472,733.54 could not be determined. 8.0 Non-compliance with Remittance to Escrow Accounts Water Sector Trust Fund remitted Kshs.729,056,043 to various Water Service Providers across the Country as conditional grants which were to be repaid through daily build up amounts deposited to escrow account as stipulated in the agreements between Water Sector Trust Fund, County Government and Water Service Providers namely Mandera Water, Eldoret Water and Machakos Water. As at 30 June, 2024, it was observed that the listed Water Service Providers were not in conformity with this contractual directive and as such, the water service providers had an outstanding failed remittance to escrow accounts totalling Kshs.14,377,339.30. There was contravention of the Conditional Liquidity support grant II agreement clause 9.02 on repayment of the grant states that; Subject to clause 9.05,9.06 and 9.09, the WSP shall repay the grant in 60 monthly instalments of an amount (as per the agreement Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No. 60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitation 13 between Water Sector Trust Fund, County Government and Water Service Providers) to be deposited into the escrow account through a daily build-up amount (as quoted in the agreement) from the collection account. In the circumstances, the service providers were in breach of the contract agreement. 9.0 Misapplication of Projects Funds The statement of receipts and payments and Note 7 to the financial statements reflects Kshs.819,276,533 in respect to other grants and transfers which includes Kshs.1,043,000 borrowed from project account to support reconnaissance visit to proposed small projects for climate resilience in Narok County (Narok West and South, Transmara East and West Sub Counties) on 2 November, 2023, through an internal memo sent to chief executive officer from the principal programme officer for approval of borrowing of funds. The activity was to be supported by GOK financing under local travel budget. However, the activity was funded by conditional liquidity support grant. Further, the transfer was not approved by the National Treasury contrary to Section 48 (1) (2) of the Public Finance Management Act, 2012. In addition, there was no explanation or evidence provided to confirm if the amount spent was to be reimbursed to conditional liquidity support grant on Water and Sanitation Development Project account. In the circumstances, the regularity and value for money of Kshsl,043,000 could not be confirmed. The audit was conducted in accordance with ISSAI 3000 and ISSAI 4000. The standards require that I comply with ethical requirements and plan and perform the audit to obtain assurance about whether the activities, financial transactions and information reflected in the financial statements comply in all material respects, with the authorities that govern them. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT AND GOVERNANCE Conclusion As required by Section 7(1)(a) of the Public Audit Act, 2015, based on the audit procedures performed, I confirm that, nothing has come to my attention to cause me to believe that internal controls, risk management and governance were not effective. Basis for Conclusion The audit was conducted in accordance with ISSAI 2315 and ISSAI 2330. The standards require that I plan and perform the audit to obtain assurance about whether effective processes and systems of internal controls, risk Management and overall governance were operating effectively in all material respects. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. Report of the Auditor-General on Waler and Sanitation Development Project (DA Credit No-60290 and 60230-KE) for the year ended 30 June, 2024 - State Departmentfor Water and Sanitation 14 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Conclusion As required by International Development Association (IDA) Financing Agreement Credit No. 6029 and 6030-KE dated 21 June, 2017, 1 report, based on my audit, that: i. I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit. ii. Adequate accounting records have been kept by the Project, so far as appears from the examination of those records; and, iii. The Project's financial statements are in agreement with the accounting records and returns. Responsibilities of the Management and those Charged with Governance Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (Cash Basis) and for maintaining effective internal controls as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and for its assessment of the effectiveness of internal controls, risk management and governance. In preparing the financial statements, Management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management is aware of the intention to cease operations. Management is also responsible for the submission of the financial statements to the Auditor-General in accordance with the provisions of Section 47 of the Public Audit Act, 2015. In addition to the responsibility for the preparation and presentation of the financial statements described above, Management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements comply with the authorities which govern them and that public resources are applied in an effective way. Management is responsible for overseeing the Project's financial reporting process, reviewing the effectiveness of how Management monitors compliance with relevant legislative and regulatory requirements, ensuring that effective processes and systems are in place to address key roles and responsibilities in relation to governance and risk management, and ensuring the adequacy and effectiveness of the control environment. Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No. 60290 and 60230-KE) for the year ended 30 June, 2024 - State Departinent for Water and Sanitation 15 Auditor-General's Responsibilities for the Audit My responsibility is to conduct an audit of the financial statements in accordance with Article 229(4) of the Constitution, Section 35 of the Public Audit Act. 2015 and the International Standards for Supreme Audit Institutions (ISSAls)- The standards require that, in conducting the audit, I obtain reasonable assurance about whether the financial statements as a whole are free from material misstatements, whether due to fraud or error and to issue an auditor's report that includes my opinion in accordance with Section 48 of the Public Audit Act, 2015. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with IFPP will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In conducting the audit, Article 229(6) of the Constitution also requires that I express a conclusion on whether or not in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities that govern them and that public resources are applied in an effective way. in addition, I consider the entity's control environment in order to give an assurance on the effectiveness of internal controls, risk management and governance processes and systems in accordance with the provisions of Section 7 (1) (a) of the Public Audit Act, 2015. Further, I am required to submit the audit report in accordance with Article 229(7) of the Constitution. Detailed description of my responsibilities for the audit is located at the Office of the Auditor-General's website at: https://www.oaqkenya.qo.ke/auditor-qenerals- responsibilities-for-audit/. This description forms part of my auditor's report. FCPA CBS AUDITOR-GENERAL Nairobi 03 December, 2024 Report of the Auditor-General on Water and Sanitation Development Project (IDA Credit No.60290 and 60230-KE) for the year ended 30 June, 2024 - State Department for Water and Sanitation 16 � � � � � � � � � � � а � � �' � � � � � �- ,� � � � м � е � v т оо � м,�� i4 о�с м �g � � G�ч �' � � м г� � н�5 � �r r, � tм д+З м г i� � ггti N n м � � � �r°, � � �' � � � � . � � go " oQ � � �д м ги aj м "�' �+ ь� с�5 л � г�`�в' i, � rn �` a�r� �` � '"� �^ � � м �у � и +r� пм � � � � � � � � � � и � � � � � � , � � � � � � � � �, � � � � � � � � ��, � �, � � � � � ° � � � � � � � � � � � w � � � � � � `о� $ � � гs°,. '�"„ � � �, �, � ь�G � � , � �и � F�n Q; � "' о � � � � � � � � � �" .. ��/ ° � г+�i �., ��рΡ � . ��°в n г*�'1 С��б г��- � � еу.у � � � ,�!'t G � � � �� � � �П � � ыС 4 � (у yry. k`° �у h� .Й., � С-� CS � � "� � � � +�, � 8С ^ � � +СуΡС � д � � � � � � � � ¢G � � � .. ... .... . 7 g � С � �+ � *i` 4 'i1' SГ tь, � гтi r+k f•5 С� �, �" � � � � � � � � � � � � � .� � '.� '� � �* � � � � � �� � � � � � �; � � � � � � � � � � ., � � � °' � � � �, � � � � � � � � � � � � �, �, � м ,�, ., � � � � оо - гА •� c+ti и м с � � � � � �, и �, � � �, � � � � � � д � и �-' А�jп � � `� "-в � � р � С1: 1„� *�.ь �7у � �4�рд � � ' ,Q} '�." .� � °�' `� � � �- �. � � � L�.м � � � �, *� �сл � �', "�+ � � ° � '� *�уΡ �'. � С' �й � и •ы � ,�' �] 4 Е � _ � � � � ,_, �С? �*, �'! (7 � � � ff С � � °e�i � � `�`! Г'� � Е � � .L" ° � 4 � ы 4, � � � � ei �� й �� р С � �� '� �`� � F � � � � �� � � � � � � � � � � � � с� � �ЕΡ � � _� � а � �� � � �'s � м, Е г�`г � � , т С � �,' � � г� F= � � � F � г.° � � � F rл � � � Е-� WATER AND SANITA TON DEVELOPMENT PROJECT (WSDP) Annual Reort and Financial Statementsfor the financial year ended June 30, 2024 STATEMENT OF FINANCIAL ASSETS AS AT 30b JUNE 2024 Financial Assets Cash and Cash equivalents 9a 5,857,947,820 2,3696,639,080 Total Financial Assets (A) 5,857,947,820 2,3696,639,080 Represented By Fund Balance B/fwd. 9a 2,369,639,080 1,428,374,239 Prior Year adjustments - - Surplus/(Deficit) for the Year 3,488,308,740 941,274,841 Net Financial Assets 5,857,947,820 2,369,639,080 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The financial statements were approved on 2024 and signed by: Julius Korir, CBS Wilfred Anwata Jennifer Owino Principal Secretary Project Coordinator Head of Accounting Unit ICPAK Member No:13143 3 WA TER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 8. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 309T JUNE 2024 Receipts Transfer from government entities 1 35,000,000 67,500,000 Miscellaneous receipts 3 279,702,436 17,496,850 Other receipts 4 132,784,062 Total receipts 447,486,498 84,996,850 Payments Compensation of Employees 5 564,008 Purchase of goods and services 6 (1,203,148,608) 1,172,430,697 Other grants and transfers 8 (819,276,532) 39,098,646 Total Payments (2,022,425,141) 1,212,093,351 Net receipts (2,022,425,141) 1,127,096,501) Adjustments during the year Decrease/(increase) in accounts receivable Increase/(decrease) in accounts payable: Net cash flow from operating activities (1,574,938,643) (1,127,096,501) Cashflow from investing activities Acquisition of non-financial assets 7 (3,166,131,322) 2,931,628,644 Net cash flows from investing activities 3,166,131,322) 2,931,628,645 Cash flow from financing activities Proceeds from foreign borrowings 2 8,229,378,704 5,000,000,000 Net cash flow from financing activities Net increase In cash and cash equivalents 3488308740 941,274,841 Cash & cash equivalent at beginning of the year 9 2,369,639,080 1,428,374,239 Cash and cash equivalent at end of the year 5,857,947,820 2,369,649,080 Juli orir,CBS Wilfred Amwata Jeniffer Owino Princilal Secretary Project Coordinator Head of Accounting Unit ICPAK Member No: 13143 4 � � ' �. � �, фч � . N �гуΡ � � Xi �э гд 'еТ �О �i N � � � Ч? � б€� г'f! � 47 #+ � �л. .� . � t-' . � � а йЭ... � � . г1 1�1 {445371+ � �G � R"Ч "Ct * � И ,�",� �ы 7-i ��.ь� tЛ �� 9Q �Т1 4Г7 М���. N i--1 r1 � f � ;' � �й. � �' i�1 йд еГ �"� Q � � . � G м,.� � г а й � � и � � ау : � � � �'' С' г� f� [Л �, t��i4 � �РΡ. ,� � � 4�в., � � ! � .�j 1 ,�w� гу �! Wf � • � � , � �, ,FЧ п�� �.. � ' ° о � � � м � � � �``�� � � � � � � �r � цэ� м и аэ � � ' ..� ;, : � � � � � с�о л � � � �r � � � : � � � � � cr� � с`'�, � и-5 rч cF м� .� : � � �j � �' а�о � � � а`�о ё а�сд � v � �S +� н �, �к со � гfь �л м . � � � ц � + � г � � � � V + � �' ',, � � � � � � � � �� '` �1 � � � �{} � � F..�J � � .�J � � � � � � � � � � � {� � � � .гз. r"� С? С'' е'.rY r"� . �уΡ. 47'S $'+ С`� '� С`1 t}ч ( 7 * 9��i � � г З � ь � �� � � � , � ' � � � � � '� . � ,r, 'r3 4� � � � с с�-� � с�-� о .� r�� � � � °� � т � о � м г`�'r, � �i � wi; � 'Я � � �"� ..-" ,..i wг � "� �� ' � G ^V � '' � � ь� �и � � сэ � с� гз сз €э о ��' �' м.+ Ct •^ �. ы � � � � � г.�э � .,`�� с ,.. _ . . � � 'v . � � '+�, р'� � � е°з � � °а е°з � �` `' � �-� � €� сз � сэ о о о �'._ _ �� й�i � � � � � � � � � �°э" � пr � �о � � � � � г�д" о��" `� �ч � � � � � � � � � �� � � � � � � �^_ � � "�, С с �+=� �' � ="� : ��+.� •С3 ,� +�-. � �+э� _�°1 � + �'+1 !�g � � су �_ .гл � s� � е� й. � С ы' �i �� � � � � � � � � � .� � �� � `�� �' � � ° �. �° � �� �� � � � � � � � .�, � � � � � + �? � �� � �;� ����� � � �л�-� ��� �� � � � �� � � ��, г�� �� � � � � � � � � � 'ы� � �' � � � ~ � -� ; � �. � • � � 5� � л � � °� � F � й� � Е��+ Р�-� а�. � � Е� й � � '� � � � � � � ,,� � . WATER AND SANITATIONDEVELOPMENT PROJECT (WSD) Annual Report and Financial Stalementsfigr thefthancialyear ended June 30,2024 10. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these financial statements are set out below: a) Statement of compliance and basis of preparation The financial statements have been prepared in accordance with Cash-basis IPSAS financial reporting under the cash basis of accounting, as prescribed by the PSASB and set out in the accounting policy note below. This cash basis of accounting has been $LlpplOmented With accounting for a) receivables that include imprests and salary advances and b) payables that include deposits and retentions. The financial statements comply with and conform to the form of presentation prescribed by the PSASB. The accounting policies adopted have been consistently applied to all the years presented. b) Reporting entity The financial statements are for Water and Sanitation Development Project under the State Department for Water and Sanitation. The financial statements are for the reporting entity Water and Sanitation Development Project as required by Section 81/ Section 164 of the PFM Act, 2012. c) Reporting currency The financial statements are presented in Kenya Shillings (Kshs), the project's functional and reporting currency. All -values are rounded to the nearest Kenya Shilling. d) Recognition of receipts The Water and Sanitation Development Project recognizes all receipts from various sources when an event occurs, and the related cash is received. i) Transfers from the Exchequer Transfers from the Exchequer are recognized in the books of aecounts when cash is received- Cash is considered received when a payment instruction is issued to the bank and the receiving entity is notified. 6 WA TER AND SANITA TION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Significant Accounting Policies (continued) ii) External Assistance External assistance is monies received through grants and loans from multilateral and bilateral development partners. iii) Other receipts This includes Appropriation-in-Aid and relates to receipts such as proceeds from the disposal of assets and the sale of tender documents. These are recognized in the financial statements when associated cash is received. iv) Donations and grants Grants and donations shall be recognized in the books of accounts when cash is received. Cash is considered as received when payment advice is received by the recipient entity or by the beneficiary. In the case of a grant/donation in kind, such grants are recorded upon receipt of the grant item and its value determined. The transaction date is the value date indicated on the payment advice. v) Proceeds from borrowing. Borrowing includes external loans acquired by the Project or any other debt the Project may take and will be treated on cash basis and recognized as a receipt during the year they were received. vi) Undrawn external assistance These are loans and grants at the reporting date specified in a binding agreement and relate to funding for the Project currently under development, where conditions have been satisfied, or their ongoing satisfaction is highly likely, and the project is anticipated to continue to completion. The funding summary analyzes the Project's undrawn external assistance. 7 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the flnancial year ended June 30, 2024 Significant Accounting Policies (continued) e) Recognition of payments The Project recognises all payments when the event occurs, and the related cash has been paid out by the Project. i) Compensation to employees Salaries, wages, Allowances, and Statutory Contributions for employees are recognized when the compensation is paid. ii) Use of goods and services Goods and services are recognized as payments when the goods/services are consumed and paid for. If not paid for when goods/services are consumed, they shall be disclosed as pending bills. iii) Interest on borrowing Borrowing costs that include interest are recognized as payment in the period in which they incur and paid for. iv) Repayment of borrowing (principal amount) Repayment of the principal amount of borrowing is recognized as payment in the period in which the repayment is made. The debt stock is disclosed as an annexure to the consolidated financial statements. 8 WA TER AND SANITA TION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Significant Accounting Policies (continued) v) Acquisition of fixed assets The payment on the acquisition of property plant and equipment items is not capitalized. The cost of acquisition and proceeds from disposal of these items are treated as payments and receipts items, respectively. Where an asset is acquired in a non-exchange transaction for nil or nominal consideration and the fair value of the asset can be reliably established, a contra transaction is recorded as a receipt and as a payment. A fixed asset register is maintained by each public entity, and a summary is provided for consolidation purposes. This summary is disclosed as an annexure to the consolidated financial statements. f) In-kind donations In-kind contributions are donations made to the Project in the form of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment, or personnel services. Where the financial value received for in-kind contributions can be reliably determined, the Project includes such value in the statement of receipts and payments both as receipts and as payments in equal and opposite amounts; otherwise, the contribution is not recorded. g) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of Kenya and at various commercial banks at the end of the financial year. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the financial year. 9 WA TER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Significant Accounting Policies (Continued) h) Restriction on cash Restricted cash represents amounts that are limited/restricted from being used to settle a liability for at least twelve months after the reporting period. This cash is limited for direct use as required by stip2ation. Amounts maintained in deposit bank accounts are restricted for use in refunding third part deposits. i) Imprests and Advances For the purposes of these financial statements, imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the financial year is treated as receivables. This is in recognition of the government practice where the imprest payments are recognized as payments when fully accounted for by the imprest or AlE holders. This is an enhancement to the cash accounting policy. Other accounts receivables are disclosed in the financial statements. J) Contingent Liabilities A contingent liability is: a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or b) A present obligation that arises from past events but is not recognised because: i) It is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; or ii) The amount of the obligation cannot be measured with sufficient reliability. Some of contingent liabilities may arise from: litigation in progress, guarantees, indemnities. Letters of comfort/ support, insurance, Public-Private Partnerships, The Entity does not recognize a contingent liability but discloses details of any contingencies in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefits or service potential is remote. Annex 6 of this financial statement is a register of the contingent liabilities in the year. 10 WATER AND SANITATIONDEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Significant Accounting Policies (Continued) k) Contingent Assets Water and Sanitation Development Project does not recognize a contingent asset, but discloses details of a possible asset whose existence is contingent on the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of Waler and Sanitation Development Project in the notes to the financial statements. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits or service potential will arise and the asset's value can be measured reliably, the asset and the related revenue are recognized in the financial statements of the period in which the change occurs. 1) Pending bills Pending bills consist of unpaid liabilities at the end of the financial year arising from contracted goods or services during the year or in past years. As pending bills do not involve the payment of cash in the reporting period, they are recorded as 'memorandum' or 'off- balance.' When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. i) Budget The budget is developed on a comparable accounting basis (cash basis), the same accounts classification basis (except for accounts receivable - outstanding imprest and clearance accounts and accounts payable - deposits, which are accounted for on an accrual basis), and for the same period as the financial statements. The Project's budget was approved as required by Law and National Treasury Regulations, as well as by the participating development partners, as detailed in the Government of Kenya Budget Printed Estimates for the year. The Development Projects are budgeted for under the MDAs but receive budgeted funds as transfers and account for them separately. These transfers are recognised as inter- entity transfers and are eliminated upon consolidation. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. 11 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Significant Accounting Policies (Continued) n) Third-party payments Included in the receipts and payments, are payments made on its behalf by to third parties in form of loans and grants. These payments do not constitute cash receipts and payments, and are disclosed in the payment to third parties' column in the statement of receipts and payments. o) Exchange rate differences The accounting records are maintained in the functional currency of the primary economic environment in which the Project operates (Kenya Shillings). Transactions in foreign currencies during the year/period are converted into functional currency using the exchange rates prevailing at the dates of the transactions. Any foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of receipts and payments. p) Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. q) Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements for the year ended June 30, 2024. r) Prior period adjustments Prior period adjustments relate to errors and other adjustments noted arising from previous year(s). Explanations and details of these prior period adjustments are presented in the financial statement. 12 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 11. NOTES TO THE FINANCIAL STATEMENTS .Transfers from Government entities These represent counterpart funding and other receipts from the government as follows: Counterpart funding through State Dgparinentfor Water and Sanitation Counterpart funds Quarter I Counterpart funds Quarter 2 - - Counterpart funds Quarter 3 35,000,000 67,500,000 272,500,000 Counterpart funds Quarter 4 - - - Total 50 0050 ( 2 5 0 13 WA TER AND SANITA TIONDEVELOPMENTPROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Notes to the Financial Statements (Continued) 1. Loan from External Development Partners During the financial period to 30 June 2024, we received funding from development partners in the form of loans negotiated by the National Treasury, as detailed in the table below: World Bank 10.7.2024 666,066 73,324,874 73,324,874 10.7.2024 691,974 76,176,981 76176981 19.6.2024 10,864,000 1,341,208,330 1,341,208,330 23.4,2024 396,508 43,650,144 43,650,144 26.3,2024 247,778 27,277,050 27,277,050 26.3.2024 646,230 71,141,240 71,141,240 15.3.2024 16,284,800 2,141,890,308 2,141,890,308 8.12.2023 897,727 96,846,030 96,846,030 1.12.2023 1,567,726 172,585,513 172,585,513 19.9.2023 416,197 45,817,648 45817648 19.9.2023 514,268 . 56,613,926 56,613,926 23.8.2023 21,280,000 2,983,467,400 2,983,467,400 8.8.2023 11,316,098 1,762,812,666 1,762,812,666 65,789,372 8,229,378,704 663,433,406 8,892,812,110 27,765,776,941 14 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Reort and Financial Statements or the financial year ended June 30, 2024 Notes to the Financial Statements (Continued) 2. Miscellaneous receipts Kshs Ksbs Kslis Kslis K511S Miscellaneous Receipts 279,702,436 279,702,436 17,496,850 432,467,599 Total 279,702,436 ____ 279,702!436 17,496,850 432,467,599 3. Other Receipts Kshs Kshs Kshs Ksks Kshs Other receipts not classified elsewhere 132,784,062 132,784,062 132,784,062 Total 132,784,062 _132,784,062 _ 132,784,062 15 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the finan cial year ended June 30, 2024 Notes to the Financial Statements (Continued) 4. Compensation to Employees Kshs Kshs Kshis Kshs Kshis Basic wages of temporary employees - 564,008 18 28899 Totail -- 564,008 18,281,899 16 WA TER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 5. Purchase of Goods and Services Kshs KAs KAs Kshs Kshs Communication, supplies 4,670,616 2,650,717 13,061,96I and services 4,670,616 Domestic travel and 81,629,557 384,193,241 subsistence 163,290,955 163,290,955 Foreign travel and 8,930,802 8,930,802 3,560,602 12,491,404 subsistence Printing, advertising, and 4,495,494 34,707,967 information supplies 3,838,042 3,838,042 Stationaries 7,159,281 7,159,281 6,856,229 18t569,668 Consultancy costs 823,024,784 823,024,784 945,709,878 2,589,517,852 Training payments 23,227,322 23,227,322 3,583,470 33,085,693 Hospitality supplies and 16,603,179 80,370,326 services 33,816,359 33,816,359 Insurance costs 15,831,277 15,831,277 17,710,753 51,949,717 Erroneous debit 8,000 8,000 8000 Fees and Licenses costs 1,298,060 1,298,060 - 1,298,060 Other operating payments 1,082,628 10,82,628 964,794 7,606,636 Water treatment chemical 6,426,891 6,426,891 6,426,891 costs Routine maintenance - vehicles and other transport 24,216,134 115,902,048 equipment 26,316,105 26,316,105 Rent costs 1,517,522 1,517,522 1,517,522 Refunds 1,452,235 1,452,235 1,452,235 Security 1,202,685 1,202,685 1,202,685 Fuel and lubricants 16,343,463 32,940,153 88,935,938 expenses 16,343,463 Tax on interest on deposit 25,004,286 25,004,286 25,004,286 Public participation and 38,707,295 38,707,295 22,756,774 95,652,889 RAP costs Postage services - 31,540 Legal Liability 8,752,963 8,752,963 Total 120 3414,60 _1,203,148,608M 17 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Notes to the Financial Statements (Continued) 6. Acquisition of Non-Financial Assets Kshs. Ksks. Ksks Kshs Kshs Construction of civil works 2,782,107,016 663,4331406 3,445,540,422 3,296,374 116 11,124,492,057 Purchase of vehicles & other transport equipment 54,716,500 54,716 500 117,263,034 921 266 572 Procurement of office equipment 49,445,601 251,928,586 301,374,187 Purchase of office furniture 6,525,246 6,525,246 1 491,494 58,655,536 Acquisitions of Intangible assets 70,853,974 70,853,974 16 500 000 87.353974 Total Costs 3 166 131 32 663.433,406 _3829.564,78 4j 12 493 142 326 7. Other Grants, Transfers, and Payments Kshs Ksks Kshs Kshs Kshs Grants for scholarships Others Specify - 819,276,532 819,276,532 39,098,646 6,719,285,933 CLSG Total 819,276,532 819,276,532 39,098,646 6,719,285,933 18 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statementsfor the financial year ended June 30, 2024 Notes to the Financial Stateients (Continued) S. Cash And Cash equivalents Water and Sanitation Development Project (WSDP) has 12 project accounts spread within the project implementation area and 2 foreign currency designated accounts managed by the National Treasury as listed below: 9. A Bank Accounts Project Bank Accounts Local Currency Accounts Central Bank of Kenya [A/c No 1000457201] - Ministry 1,234,975,708 289,872,509 Kenya Commercial Bank [Alc No 1240284225] - Kwale 304,909,837 226,869,524 Kenya Commercial Bank [A/c No 1240218648] - Coast Water Works Development Agency 367,806,278 405j104,240 Equity Bank [A/c No 15602767823811 - Mombasa Water 239,029,280 244,033,047 Equity Bank [A/c No 0180280425687] WSTF 2,384,087,059 161,432,526 Kenya Commercial Bank [A/c No 1283235579]- NWWDA 21,337,463 24,731,631 National Bank [A/c No 01071032110300] - WASREB Kenya Commercial Bank [A/c No 1239146469 & 12361417761 - KIMAWASCO & 616096,110 MAWASCO 323,087,511 Equity Bank [A/c No 10302786356801 - Wajir 161,019,738 207,005,002 Equity Bank [Ac No 05802797201791 - Garissa 231,231,800 162,991,197 Kenya Commercial Bank [A/c No 1242765387] - Taita Taveta 297,610,548 324,511,894 Total local currency balances 5,857,947,820 2,369,639,080 19 WA TER AND SANITATION DE VELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 Notes to the Financial Statements (Continued) Special Deposit Accounts The balances in the Project's Special Deposit Account(s) as of 30th June 2024 are not included in the Statement of Financial Assets since the line items are yet to be drawn into the Exchequer Account as a voted provision. Below is the Special Deposit Account (SDA) movement schedule, which shows the flow of funds voted in the year. These funds have been reported as loans/grants received in the year under the Statement of Receipts and Payments. Special Deposit Accounts Movement Schedule (1) A/C Water and Sanitation Development Account A/c No. 1000394177 Opening balance 233,230,216 1,079,707,703 Total amount deposited in the account 4,746,280,065 2,590,463,850 Total amount withdrawn (as per Statement of Receipts & 4,746,280,065 3296569770 Payments) Closing balance (as per SDA bank account reconciliation attached) 233,230,216 7601,783 ii)A/c Name A/C Water and Sanitation Development Account A/c No. 1000352008 Opening balance (as per the SDA reconciliation) 387,971,100 188,191,108 Total amount deposited in the account 3732,960,000 4,020,242,200 Total amount withdrawn (as per Statement of Receipts & 098638 2,696,268,120 Payments) Closing balance (as per SDA bank account reconciliation attached) 20 WATER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements or the financial year ended June 30, 2024 Notes to the Financial Statementg (Continued) 9 Fund Balances Brought Forward Bank Accounts 2,369,639,080 1,428,374,239 Total 2,369,639,080 1,428,374,239 21 WA TER AND SANITATION DEVELOPMENT PROJECT (WSDP) Annual Report and Financial Statements for the financial year ended June 30, 2024 OTHER IMPORTANT DISCLOSURES 9. Payments by Third Party on Behalf of the Project This relates to payments done directly to suppliers on behalf of the project, such as; national government may fund the operation of a health or education program; a donor may pay directly for the construction ofa given activity National/ County government - World Bank 663,433,406 500,000,000 Total 663,433,406 500,000,000 10. Cash and Cash equivalents Included in the cash and cash equivalent is Kenya shillings 98,595,330 and Kenya shillings 234,538,999 disbursed to Carissa County and Mombasa County respectively on 29t June 2024. As at 300 June 2024 the funds were in the County CRF Account. Subsequently the funds were transferred to the Water Companies. The only issue was timing differences and Account statements are attached for the support of the subsequent transfer of the said amount to the WSPs- Furthermore, kshs 435,917,000 disbursed to Kilififi County was in the CRF Account at the County but The County transferred the funds to the WSPs in the month of October 2024 Kilifi County had confirmed the receipt of the same and bank statements are provided for reference. 12.supplnentary budget variance of kshs 15,000,000 After supplementary budget provided revealed budgeted receipt of Kshs. 9, 110, 000,000 against budgeted receipt of 9,125,000,000 included in the statement of comparison of budget resulting to a variance of Kshs. 15,000,000. Explanation. The project had already received Kshs. 35 million by the time Supp 11 was effected hence the over expenditure of Kshs. 15million. The initial approved allocation was Kshs. 70 million that was reduced to Kshs. 20m in Sup. lI. 22 ，……仁！…· -;―レ � н +.. м •� � � � о , 1* � � �, �`� � � '� � � � � � .� � � гч � � � � о �рΡ� .✓ а . � •}г�, ra �э � � � С.? � � � :i� 4 � � � ; �а � rм � ф� а� � � � � � �i '� � `� � � � ^,� � � � �, � � а � � � �q� � � � у и 'с�'�' '�'д д,з �# у С -�., � .� �д� ^xi � � �i ы � � �+ � � ' й с�э � °' � � � U . � С у4 � � � L7, � � 0.�] � '+� eCf �� � � � �� � � � �, �, о'+- tw а� ал �� : ta � �� ��!�� � �j � '� '�р °�ц- Гifi � 6' � + � dt �' � � � 'r;� i р 4� �' ^� �� � � � � .�' � �цj � � � `'�, аз � �., . � .✓ 4 �� �»���.,�-,{�''�� �! х � � � � ж Kf � п lп�VуΡ� � �� FЧ � � 1 д а � '� � V � � � а% : � � � � � � � � + � � � r� ,� � � � � : � � � �1 '[� �д � � � � .� � �" � �` � � � �� * � � � �� 'еС4 �` � � у� . 4t .� � ф � . � .�` � *� �' � � � •� � .йу �С •.,. '� �-- � � �i � , �' .� � ��" �� �,��.�� � ti �ч � � � � � � � у � 4х �{ � � ;��� г� '..i . ,4'i �-вч М��..�йма� ' �- w � � э � � � � � м и er� гч га � � � v��s �` �в +п tv м гrь ,,�.. ог� о: м ~с о г�а с� ис с, м-i См r, ьr, � � � � � 1 С I 1 V 1 1 � 1 �ьц,� 5У ��,,j ' l ��ь,�{ .....N �4 O�CF 1'�� � �t% '•� � � � � � � � � �� �� �. � ��гуΡ � �. �Л гЛ 9f5 �+ г*ь1.. � l1'У 1� � � �. М � �ч � � � � � � � �r� "'а г1 1 1 W � � +� � � � � � � � � # � � �,. •�j � О � 4 � М� � � � s] �.. +�Рь � й � � � � '� �.. � � 4G '� пв � б� � � � � � � _ �1 � � � �°"� � �S � •� � �_ �� � - � � � � L ." � � � е°�з С� � � � о "+� у,. � w � � G G � � '"' С еа С � �.. й � . � 4} � �" � " � �л � �' � �. � г � � .� - _ � ез �+С �; х � -� . � с � •� w � � � в�Е � ' �. .я . �. ❑ w �а '� � � '� g � G � с�н.��, :,. .i. � С.7 � Е-� Р.. КС .С 4 Sм Е' � �' . . � - .н - . . .... . .� ,� - WATER AND SANITATIONDE VELOPMENTPROJECT (WSDP) Annual Report and Financial Slatementsfor theflaaacialyear ended June 30,2024 Annex 3: Other Support Documents i. Signed confin-nations from beneficiaries in Transfers to Other Government Entities ii. Bank Reconciliations statement as at 30111 June 2024 iii. Board of Survey Report iv. Special Deposit Account(s) reconciliation staternent(s) 27 l H H a rI Floor, CIC Pla i Mor( lood. Upper Hill, Nairob, Kenya PO Box 49699 uHirobdl00100 Tel:+254 (20) 2720696, 2729017/8 Ernaoll. :Websile: REF: WSTF/5/WB/VOL 111/43(82) 25 November 2024 The Principal Secreltry Ministry ot Water, Sanitation and Irrigalion P.O. BOX f9720-00100 NA;ROBI Attn: WSDP Project Coordinator RE: CONFIRMATION OF FUNDS RECEIVED UNDER WATER AND SANITATION DEVELOPMENT PROJECT (WSDP), IDA CREDIT NO! 6030-KE - FINANCIAL YEAR 2023- 2024 This is lo confirm that in financial year 2023/2024, we received WSDP funds amoonling to Kshs. 2,983,467,400 as detalled in the lable below. S/N Payment Description Amount in Kshs. Date received in Proqject Account._ S RDisbursemeni . 2.983,467,400 07/11/2023 Total 2,983,467,400 Your corrinued suppori is highly appreciated. Yours faithfully, illis Ornbai Chief Executive Officer MALINDI WATER & SEWERAGE CO. LTD P.O. Box 410 A ~80200-MALINDI +254-042-21-31037, 0790-405778 +254-042-21-30923, 0731-400314 Customer Service: +254-042-21-21132 Fax: +254-042-21-31206 Email: infold)malindiwater.co.ke/i-nalrdiwater6(d)gnailcorn When replying please quote Ref. No. MAWASCO/MLD/COO1/VOL./25770 26th September 2024 The Principle Secretary, Ministry of Water & Sanitation and Irrigation Maji House, Upper hill, off Ngong Road P.o. Box 49720 00100 - NAIROBI. Attn: Project Coordinator Dear Sir, RE: CONFIRMATION OF FUNDS RECEIVED UNDER WATER AND SANITATION DEVELOPMENT PROJECT,(WSDP), IDA CREDIT NO. 6030- KE - FINANCIAL YEAR 2023-2024 This is to confirm that in Financial Year 2023/2024, we received WSDP funds amounting to KShs. 593,556,642.30 as detailed in the table below S/N Payment Payment Amount in Kshs. Date received . Description Reference in Project - . _ Account 1. 7th Disbursement - FT241211D3LQ 380,206,642.30 30th April 2024 30th April 2024 2. Bth Disbursement - 213,350,000.00 - June, 2024 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Total 9,,6 4.3 593,556,642.30 Yours faithfully, For Malindi Water . Sewerage Cn. I_... Malindi Water & Sewerage K..Company Limited MAWASCO FP, O. Box 4 10. Malindi Felix L. Wanje Bx O 1 Managing Director. A 51.zirVnfi ,1n 1 Tc- 1: 2 - 5'' -:254 , C 735 -- r 3 5~ : 5 ~ t C: 5' .t... Our Ref: MW\SSSC/ MD/KWSCRP/\OL.l/34 Date: 191ä A usJ t 2024 Principal Secretary Uinistry of Water & Sanitation and 1rrigation Maji House, Upper hiln, Off Ngong road, P.O BOX 49720 - 00100 NAIROBI Telephone: +254 020 2716103,4900000 Eax: +254 020 2727622 Email: ps@water.ro.ke Aftn: WSDP Project Coordinator RE: CONFIRMATION OF IDA FUNDS RECEIVED UNDER WATER A1D SANITATION DEVELOPMENT PROJECT (WSDP) - FINANCIAL YEAR 2023-2024 This is to confirrm that during the financial year 2023/2024, County Covernmenlt of Mombasa transferred Kshs.722, OG2,177.15 to Mombasa Water Supply and Sanitation Co. ltd- \VSDP project bank account to implement ctivities under the Water & Sanitation Development Froject (WSDP) as detailed in the table below. S/N Payment Reference Amount in Kshs. Date received in Project Account 1 RTGS MOMBASA 234,411,505.00 11-07-2023 COUNY-5429352 2 RTGS MOMBASA 487,650,672.15 23-04-2024 COUNTY-5441226 Total 722,062,177.15 Yours fail uly, EQR ¯N SA-WATER SUPPLY & SANITATION CO LTD A-13 r IM FARAH MASkAG NG¯D[RECTOR Tvo/HQ/VWSDO/139/Vol .2/57 23RD September. 2024. Nationa Projlect Co-coordi.nating Uni: Water & Sanitation Development Project, Ministry of Water, Sanitation and Irrigation, Maji House, Upper hill, Nairobi. P.O BOX 49720 - 00100, Nairobi. Dear Sir P.É: CONFIRM ATlON OF FUNDS RECEIVED DURING THE FINANCAL YEAR 2023/2024 Rf e- ,sc d to the above subject rnatter. \ he"eby vrite to you to confi-m thk in the financial year 2023/2024 Tavevo \Vaer 'n.:'werage Co. Ud receivéd Ks. 50,694,697.25 as per the below schedule, Dlsbursément Date Amount Ksi 15/04/2024 - 30303,.97.25 210/07/ 2024 203,89"i.000.00týi, T--d FY 2 3 /24358,94.97.2 The -2disbursent lit ou conrnfldäl project account akter clure of ÉR& nnadi year e tipulated. Th6i-nk yoi- fcr your continued support, guidance and cooperation. You 5 &:sif:fJfú Amina Suleiman. A ,gMANAGING DIRECTOR - Ref : CWSB/FIN/38/VOL.60/35 soCaO Date : 15t August 2024 Mr. Julius Korir, CBS The Principal Secretary State Department for Water and Sanitation Ministry of Water & Sanitation & Irrigation P.O. Box 49720-00100, NAIROBI Attn Eng. Fred Amwata Dear Sir, RE: CONFIRMATION OF DIRECT PAYMENTS MADE BY THE WORLD BANK ON BEHALF OF COAST WATER WORKS DEVELOPMENT AGENCY UNDER WATER AND SAN1TATION DEVELOPEMNT PROJECT (WSDP) IDA CREDIT NO.603OKE & §029KE FINANCIAL YEAR 2023-2024 The above subject matter refers. Please find below breakdown in respect to Direct Payments made by the world bank on behalf of Coast Water Works Development Agency under WSDP IDA CREDIT NOs.6030/6029 In the financial year 2023-2024 amounting to USD. 4,668,433.92(USD, Four Million, Six Hundred and Sixty-Eight Thousand, Four Hundred and Thirty-Three Cents Ninety-Two Only). DATE PAID CONTRACTOR NAME IPC NO. DIRECT PAYMENT (USD) 19-Sep-23 CHINA INTERNATIONAL WATER 9 514,267.65 19-Sep-23 CHINA INTERNATIONAL WATER 10 416,196.79 1-Dec-23 CHINA INTERNATIONAL WATER 11 1,567,726,41 8-Dec-23 CHINA INTERNATIONAL WATER 12 879,726.67 26-Mar-24 CHINA INTERNATIONAL WATER 14 247,778.34 26-Mar-24 CHINA INTERNATIONAL WATER 16 646,230.37 23-Ar-24 CHINA INTERNATIONAL WATER - 17 396,507.69 10-3ul-24 CHINA INTERNATIONAL WATER 18 691,973.87 10-Jul-24 CHINA INTERNATIONAL WATER 20 666,065.99 TOTAL 6026473.78 R 0. Box 90417 - 80100 Tel: No. 041 - 2315230 Email: info@qcwwda.go.ke Mombasa Kenya 0731 231523 Website: www.cvvda.uro-ke rnniniari c wwda.m.ke Ema i: info@k ilifiwater.o.ke KILIF MARIAKANI WATER AND w bsite: www. kilifiwater ,cxkte SEWERAGE COMPANY LIMVTED P.o. Box 275-80108 KiLIFI The Principal Secreta j iugist 2024 MI inisuy of \Water. Sani tation and irion P.O. BON 4(720-00 I 0 NA XIROBfl1 Att: WSDP Project Coordiiatlor RE: CONFIRNIATION OF FUNDS RECEIVE) UNDER WATER AND SANITATION DEVELOP\IfENT PROJECT (WSDP). IDA CREDIT NO. 6030-KE - FNANCIAL YlEAÅR 2023-2024 This is in conlirm hiiai in 2023/2024 tnancial, we recei\ecl \V SDf> funids amoingiTi to Kshs4 14.069,876.50 (in 1iures) as detailcd in the table below. SIN Payment Payment Arnount in Kshs. Date eceived Deseription Reference in Projeet Account 1. Revenu I191,502.876.50 30'4,2024 Disburseem I 2. Revenue 222.567,00.00 Disbursenimem 2._____ IDiireci_Pai nt _i_ _ LDireci Payment 2. etc ________________________ ________________ _ _________ Total 414,069,876.50 Yours faitull For a nd ilhl uof kilifi-NIhriakani Watcir and Sewerugco. Ltd. N1ANAGING D1RECTOR. "I""! P I I-I . " . GARISSA WATER AND SEWERAGE COMPANY P 0 BCX 1088 70100 GARISSA TEL 046 3330, 0462176 PIN NO: 0 FAX: 0 EMAIL: -A_4--_ 24*1 September 2024. The Principal Secretary Ministry of Water, Sanitation and Irrigation P.O. BOX 49720-00100 NAIROBI Attn: WSDP Project Coordinator RE: CONFIRMATION OF FiNDS RECELVED UNDER WATER AND SAMTATICN DEVELOPMENT PROJECT (SD1), IDA CREDIT NO G03-KE - FINANCIAL YEAR 2023-2024 ____ This 1s ro confiri that iii 2021 A/2Y4 filäuceki, wde blccive V lwfds IOu tin to s 711 ... (hi fgures) as dewiled iii Ilil -- - ¯¯Y¯rtent - ¯mo¯¯t in Kshs. Date received S/N PymentPayrtinFProject Description Reference Account 2 8*RevenueA.cRoAcnt DisburseleClt - I 21 GZRve'C iS 5 9 ,53 3 08/V06/20294 D isrcRcl t __ ___________ iii CRFI ÅcwiiLWl 1 Total _ _ 352,692_7- Jones MI Mugc' Finainc± MnUiuager 1 - Fof: CIéf Executive Officer X WA1L1' WA'JEi AND S1,W)EMAW41 OM)PANY LTD 11,o, lI4x 1X-80403 Te; 4112014155 I mid inf1(k4kwnlIaiwalecr,. ,kW,Wehi: wwwksh-le.k ghf2 OIJR RMY: K WA WASCO /WH) 1O .11/03 ATE: 26" Scptember 2024 The Principal Sucretary Ministry of Water, Sanitation and .irrigation P.O. BOX 49720-00100 NAIROBI Attn: WSOP National Project Coordinator RE: CONFIRMATION OF FUNDS RECEIVED UNDER WATER AND SANITATION DEVELOPMENT PROJECT (WSDP), IDA CREDIT NO. 6030-KE - FINANCIAL YEAR 2023-2024 This is to confirm that in 2023/2024 financial, we received WSDP funds amounting to Kshs.634, 435,801.85 (in figures) as detailed in the table below. S/N Payment Payment Amount in Kshs. Date received in Description Reference Project Account . 6th Disbursement - 220,003,130,00 14/08/2023 August, 2023 2. 7 h Disbursement - 414,432,671.85 11/04/2024 April, 2024 Total 634,435,801.85 Note Kshs. 214,830,000.00 disbursed on 29h June 2024 held at the CRF, this was transferred to the Commercial Bank account of the WSP on 91h September 2024. Eric P MANAGING DIRECTOR W ater 1' Poo1, C1(C PlaPI Moro Road, Upper Hill, I Nairobi, Kenya PO Box 496YV Ilairo)bi-00 100: Te.+254 l20) 2720696. 2729017/8 Email: Website: REF: WSTF/5/WB/VOL 111/43(82) 25 November 2024 The Principal Secretary Ministry ot Water, Sanitation and Irrigation P.0 BOX J9720--00100 NAIROBI Attn: WSDP Project Coordinator RE: CONFIRMATION OF PUNDS RECEIVED UNDER WATER AND SANITATION DEVELOPMENT PROJECT (WSDP), IDA CREDIT NO. 6030-KE - FINANCIAL YEAR 2023- 2024 ________ __ This is to confirm thai in financial year 2023/2024, we received WSDP funds amounling l Kshs. 2,983.467,400 as detadled in the labla below. S/N Payment Description Amount in Kshs Date received in I1 Project Ac count S Revenue Disbursemen 2,983,467,400 07/11/2023 Total 2.983r467!400 Your continued suppori is highly appreciated. Yours faithfully, NilliS Orbi Chief Executive Officer REPUBLIC OF DENYA F. 0. 51 Date 01/Q7/29 Report of the Board of Survey on the Cash and Bank Balances of ...W.. as at the close of business on .j.7/,qQ3ja The Board, consisting of - (Names and Official titles) Sarah Murlithoi - Chairman Adayo Erick - Member Naboth Otao - Member . I assembled at the office off .-........ ..................... Accounts office at 10; (4.m(time) on the as the following cash was produced: - Notes .. -h .- -_ Silver h . .. .. Sh.. WIL Copper *h -. .. . . ..TIL Cheques as per details on reverse .. Sh. NIL NIL It was observed that cheques amounting to Sh. ..........- .......ha ts .. had been on hand for more than 14 days prior to the date of the survey. The cash consists of East African currency and does not contain any demonetized coin or notes. The Cash Book reflected the following balances as at the close of business on the 3WQ%uneaO04 C a s h o n h a n d .. .. .. .. .. S. Bank balance.. .. .. .. Sh.........4..... The Bank Certificate of Balance showed a sum of Sh. On.K AMQWT_ M.#l.mnR4kHfl.4. 4..nyi.Th annd sae.. ndrea .an.mightyJ..wp,. at. .g - s t a n d i ng.. ............ ........................................ standing to the credit of the account on 30th June S$ The difference between this figure and the Bank Balance as shown by the Cash Book is accounted for in the Bank Reconciliation Statement (FO. 30) attached. Chairman Dmte 21" July 2024 .......I.. ........ iMembers of the Board 1 GPK (L) 門－’一 r EIITP iAL ,clili 1A KENY,k obi, 1 'en-i il, 00 Y 2'6000, TE;- l.'40192 Ju1Y 15, 2 0 24 CERTIPICATE OF 13ALANCES Customer 145029 MIN OF WATE R SANITATION & IRRIGATION Balawce Date: 30-Jun-24 C;qen tAmount No Acoount Naamme Carrenc Balance STA E D WAT iOQ0456997 RE C-STATE DEPT WATER AND SANITATION US 13 1_21244,55 1 1- 3O S, r TL E'p S T TION YJ S o u t N e R AND SA141TATION p TE A A 1000457007 DDEV-STATE DEPT WATER /kND SANITATION KES 43,178,907.55 1000457015 DEP-STATE DEPT WATER AND SANITATION KES 26QJ31,655,95 1000451t023 C13K 165-STATE. DEPT WATER AND SANTITA KES 0.00 1000457198 E QU kLIZATION FUND YE S 3,373 079170 100Q457201 WATER AND SAN FATION DEV PRO WSDP M, S 1 238 660, ?2.00 1 IOU04j/217 COASTAL REG WAT EF, SECU CLIMA r PFsm KE S 0.00 000537701 WATER SECTOR TRUST FUND(WSTF)PROJ A KES L 100063084). A THE HORN OF AFRICA GROUND WATER RE.S-J ' S 20,601,653.95 Sophie Lanpt (Mrs) Priscilla Keitany (Mrs) Authorised Signatory Authorised Signatory Banki-Lg Services Division Banl