The Water Services Trust Fund (WaterFund) is a Kenyan State Corporation established under the Water Act, 2016. Operating under the Ministry of Water, Sanitation, and Irrigation, WaterFund is mandated to provide both conditional and unconditional grants to county governments, with the goal of financing water and sanitation development in marginalized and underserved regions.
However, a recent report by the Auditor General has uncovered serious financial and governance concerns at the institution. The findings indicate potential violations of key public finance laws and questionable practices in the management of donor funds and government resources.
Questionable Disbursements and Financial Oversight Failures
The Auditor General’s report for the 2021/2022 financial year implicates the current Chief Executive Officer, Mr. Willis Ombai, in a number of controversial financial disbursements. Most notably, WaterFund is accused of irregularly disbursing Ksh 37,182,159 to Noltuesh Water under the Community-Led Strategic Grant (CLSG) programme. Of this amount, Ksh 5,467,479 remains unaccounted for.
In a separate instance, WaterFund disbursed Ksh 24,650,000 to Amatsi Water Services Company Limited, despite unresolved investigations concerning a prior grant of Ksh 26,659,238 issued in the 2020/2021 financial year. As of 30 July 2022, the total outstanding receivable owed by Amatsi stood at Ksh 51,309,238, raising further concerns about the prudence and due diligence of WaterFund’s financial practices.
Breach of Public Finance Management Frameworks
The report further indicates that WaterFund has breached key statutory frameworks governing the use of public funds, including:
- The Constitution of Kenya (2010)
- The Public Finance Management Act (2012)
- The Public Procurement and Asset Disposal Act (2015)
These frameworks collectively emphasize fiscal responsibility, transparency, and accountability in the management of public resources. The failure to adhere to these laws suggests systemic weaknesses in the institution’s governance and oversight structures.
Inappropriate Allocation of Donor Funds and Overhead Costs
The Auditor General also raised concerns about the absence of a clear cost allocation policy within WaterFund. It was observed that the Fund charged overhead costs such as fuel and rent to donor-funded projects without proper justification—an act that contravenes both the Public Finance Management Act and the Public Procurement and Asset Disposal Act.
Moreover, expenditures were charged to European Union-supported projects without a consistent and transparent methodology, further undermining donor confidence and raising questions about the credibility of project accounting.
Over Ksh 53 Million in Unexplained Project Expenditures
WaterFund is also under scrutiny over Ksh 53,889,585 in project expenditures reportedly incurred by implementing partners. The lack of adequate documentation and transparency surrounding these costs points to potential financial misappropriation and highlights the need for rigorous monitoring of implementing agencies.
Integrity of the CEO’s Appointment in Question
Concerns have also been raised about the process through which Mr. Willis Ombai was appointed as Chief Executive Officer. The Auditor General’s report suggests that the appointment process involved canvassing—a practice that should, under the Public Appointments (Parliamentary Approval) Act (No. 33 of 2011), result in automatic disqualification.
Such allegations raise serious doubts about the transparency and merit-based nature of the recruitment process, and may reflect deeper issues affecting institutional integrity and leadership at the Fund.
Conclusion
The Water Services Trust Fund was established to drive equitable and sustainable access to water and sanitation services in Kenya’s most vulnerable regions. However, the issues raised in the Auditor General’s report indicate a significant deviation from this mandate. Allegations of financial mismanagement, breach of procurement laws, and compromised leadership demand immediate investigation and action.
There is an urgent need for institutional reform to restore accountability and ensure that public and donor funds are managed in a transparent, lawful, and results-oriented manner. The water sector is too critical to be undermined by mismanagement and lack of oversight.
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