26 September 2017

Rwanda: WASAC on the Spot Over Undocumented Spending

Officials of the Water and Sanitation Corporation (WASAC) were yesterday grilled by the Parliament's Public Accounts Committee (PAC) over gross inaccuracies in financial statements concerning billions of Rwandan Francs spent by the water utility.

This was during the first day of a two-week process that will see 22 institutional heads and mayors appear before the parliamentary Public Accounts Committee (PAC) over issues contained in the 2014/15 Auditor General's report.

The audit covered the year ended June 30, 2014, and was the last audit of EWSA following promulgation of the law under which EWSA was restructured to form two new entities, namely, Rwanda Energy Group Limited (REG Ltd) and WASAC.

The report highlights 19 water projects whose total contract amounted to Rwf20.1 billion, which faced several issues, including delay ranging between three months and over two years, and noncompliance of contractual terms leading to defects that cast doubt on the sustainability of the water supply systems.

Three of the 19 projects were about construction of 10 water tanks valued at Rwf1.2 billion, which were completed but no water supply connected.

Tough questions

Speaking to WASAC board members, senior managers and other stakeholders, including the Permanent Secretary at the Ministry of Infrastructure, Christian Rwakunda, Deputy PAC deputy chairperson Theoneste Karenzi said that, in total, the Auditor General's report had pointed out 111 issues concerning WASAC.

The majority of the issues pertain to financial statements.

"The inaccuracies in these financial statements are many and they can be used as a potential avenue for embezzlement of funds. It is unacceptable that Rwf3.9bn can be spent without supporting documents and then people come here to claim that documents were obtained after the auditing was done. The Auditor General informs you way before the auditing exercise begins, what excuse is there for not having the paperwork on time," Karenzi wondered.

He said as one of the institutions that take a significant chunk of the National Budget, it was troubling that the parastatal had debts worth Rwf1.8 billion yet it still had issues billing its customers, some who were not known to the institution.

Karenzi, who took time to lecture the teams on accountability and responsibility, did not mince his words.

"I would like to remind you that we are not interested in your strategy moving forward. We are more interested in accountability and responsibility. We would like to know who is responsible and what action has been taken to rectify the issues. There are laws that regulate all these positions and we all know what happens when the law is broken," he said.

MP Théogène Munyangeyo wondered how the institution chose its employees and how their performance was evaluated.

"Who was in charge of evaluation? Was it the board or the ministry? You are saying that you are replacing employees with fresh ones but what really happened to the first ones? If you are given duties and you find the foundation is not strong enough, dismantle it and start afresh," he said.

WASAC chief executive Aimé Muzora admitted that the institution that he has been heading for about two weeks had made many mistakes, some of which he attributed to "confusion brought about by splitting the water utility company from that of energy."

"One of WASAC's main problems was lack of a complete structure, especially after the institution was split from its energy supplying counterpart. Some of the people who were in charge at the time made glaring mistakes. We have restructured with some consultation from the Auditor-General and Ministry of Infrastructure," he said.

He pledged that the next audit would register significant improvements since no stone was being left unturned to rectify the errors from the past.

The hearings will end on October 10 and a subsequent report will be delivered to the Plenary at least by October 23.

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