Coast Water illegally paid non-directors Sh300,000 as sitting benefits, says Ouko.
The Coast Water Services Board irregularly paid Sh300,000 as sitting allowance to representatives of Water Principal Secretary, Auditor General Edward Ouko says.
Those paid were neither gazetted nor listed as directors of the board, the audit report shows.
The amount is part of the Sh15 billion audit query on the board's accounts for the 2017-2018 fiscal year.
Ouko also found the board in breach of accounting laws for failing to include Sh2.7 billion worth of assets. The assets include water projects and land.
He warns that taxpayers may lose money after the disclosure that a third of Coast Water Board land has been encroached on by private developers.
The land includes 22 acres on which staff houses stand in Shanzu, Mombasa.
Alarmingly, some of the land has been subdivided into 42 plots and title deeds issued to the private developers.
'This is a sign that the management did not play its custodial role in safeguarding the board's property,' Ouko says.
He has raised the red flag over Sh11.5 billion balance of a loan advanced to the board by the World Bank in 2008.
The repayment period was 13 years from March 2013 yet there are no records confirming repayment. The amount was also not disclosed separately as required by the law that current liabilities be disclosed separately.
The loan was denominated in foreign currency and was not translated using the closing rate as required by the International Public Sector Accounting Standards (IPSAS). Foreign exchange gain/loss could not, therefore, be determined because the Sh11.5 billion balance was translated on transaction date rate.
It was not possible to confirm if the management is in conformity with the terms of the loan. It was also not possible to confirm the accuracy and completeness of the loan balance.