Energy Sanitation and Water Authority (EWSA) has put blame on its newly acquired database software, Oracle, for the financial and administrative shortcomings highlighted by the Auditor General (AG).
The 2012/13 Auditor General’s report faulted EWSA for incurring heavy losses, failure to present a financial statement and record of its assets for audit as well as running a suspense account with billions of Francs.
But the utility body says that all the documents were available, but could not be retrieved at the time of the audit.
“Books of accounts were available but due the fact that Oracle was under implementation in EWSA, it was not possible to print them. They were [later printed] but it was too late for the Auditor General to consider them,” Prosper Mubera, the Communications Officer said.
However, the AG, Obadiah Biraro said EWSA was not audited and consequently issued a Disclaimer of Opinion, because the entity wasn’t ready for audit.
“They did not have a financial statement which left us with no ground of commencing the audit. So, we decided to give them more time and even showed them how to draw financial statements,” said Biraro.
“Due to these limitations, I was unable to confirm whether the balances in the trial balance and financial statements are supported by the underlying books of account. I was unable to audit the balances presented in the financial statements and consequently, I could not confirm whether they represented operations of EWSA for the year ended June 30, 2012,” reads the AG report.
Mubera admitted that the EWSA was last audited for 2011/12. “However the Financial Year 2012/13 is scheduled to be audited soon and EWSA Ltd has already submitted its financial statements to the AG,” he said.
That means that details contained in the recent report presented to Parliament are mainly those of 2011/12.
The AG report says EWSA held Rwf28 billion in a suspense account, but the entity called it “a financial error” due limitations of its system.
Mubera refuted claims that delays in seven micro hydro power plants had cost the utility an extra Rwf 10 billion.
“The first contractor was paid up for the completed work ($9.7million) and the second contractor was hired competitively at $6.8million in addition to the $2.2million paid for supervision. There was no extra Rwf 10 billion. The amount referred to was the total amount paid which is equivalent to $18million.”
The AG also reported that the project to interconnect Rwanda’s grid with neighbours under the Nile Equatorial Lake Countries had not taken off since 2009. The closing date of the project is December 31, this year but the AG says works had not commenced by the time of audit. Not even expropriation of people affected by the project had been done.
But EWSA attributed delays to increase in project scope and change of design which attracted other development partners that came at a later stage like KfW and the Government of Netherlands to entirely cover Rwanda-DRC project scope of interconnection.
“Tendering processes took long and expropriation could not start before tendering process was concluded. Now, all formalities for the project extension are completed and African Development Bank guaranteed project extension up to June 30, 2016,” said Mubera.
EWSA admitted that at some point, one of its employees was involved in forgery that resulted in a Rwf 115 million loss to a cash power dealer in Karongi branch.
The AG also faulted EWSA for a huge stock of water pipes worth Rwf 1 billion that have been idle for 18 months. EWSA said most of the pipes had been used and the remaining will be used on the extensions of Kimisange - Radar – Rebero and Karama - Mont Kigali and Rwamagana plants.
On claims that 40,108 water customers were not billed and 40 percent water went to waste, Mubera said that it was caused by migration from the old system to the new one during which some electricity customers were erroneously included.
“This inflated the number of water customers. The system we have today is free from such errors and reflects a correct number of customers….”
Regarding electricity, the AG indicated in his report that revenue reported in the billing systems could not be reconciled with that reported in the financial statements but EWSA attributed the error to huge data and large amount of transactions.
Also, EWSA said that massive transfer of data from one system to another also contributed highly to the mismatches.
“Systems are now being studied to find out the best ways to correct this. Nevertheless, ESWA has enhanced manual verifications and reconciliations which have to a great extent reduced the errors,” said Mubera.
The AG discovered a balance of Rwf3. 1 billion reported as stock in transit but there was no list of such goods ordered. Also the audit report indicates that EWSA was unable to provide any evidence to confirm subsequent delivery of such items by the time of the audit in August 2013 hence referring to the amount as fictitious.
EWSA refuted the claims saying that no fictitious amount in EWSA draft financials that were provided to the auditor general.
“Systemic issues that were prevalent at the time of audit were the cause of the problem. All amounts have been reviewed and corrected where necessary,” Mubera said.