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NWC spends $1.7 billion ... was it handled properly?

Published:Wednesday | January 14, 2015 | 9:37 AM

Jovan Johnson, Gleaner Writer

KINGSTON, Jamaica:

An auditor general report has disclosed that the National Water Commission (NWC) may not have appropriately handled more than $1.7 billion collected from customers.

The disclosures are contained in an audit report tabled in the House of Representatives yesterday.

The auditor general, Pamela Monroe Ellis, says in one instance, the NWC failed to lodge more than $700 million collected from customers into what is known as the K-factor account.

The K-factor is a charge determined by the Office of Utilities Regulation (OUR) and imposed on customers by the NWC to fund capital projects.

In her report, Monroe Ellis, said over the period April 2008 to September 2014, the NWC collected approximately $16 billion from its customers for the account.

However, only 94 per cent of that amount or $15.3 billion was deposited.

She says the remaining $700 million that was not deposited was instead kept and utilised to finance the NWC's operational activities.

The auditor general says her department was unable to verify whether NWC was complying with the requirement to deposit the money collected from customers for the k-Factor within the stipulated 45 days.

Monroe Ellis says the late depositing of the K-Factor funds could hinder the timely execution of non-revenue water reduction projects aimed at increasing operational efficiency.

Meanwhile, the auditor general's report said the NWC transferred $1 billion from K-Factor funds to finance administrative expenses.

However, according to the report, the NWC has not presented the required approval from the OUR that would have authorised the transfer to a unit to manage the K-Factor programme.

According to Monroe Ellis, in a letter dated January 22, 2013, the OUR agreed with a NWC decision that the administrative activities of the K-Factor Unit would be paid by NWC.

However, the auditor general says the NWC instituted a supervision cost of 8.5 per cent of project cost, which amounted to $1.08 billion dollars which was transferred to NWC operational bank accounts in August 2013.

The auditor general says the NWC's failure to lodge $700 million collected from customers into the designated K-Factor Account and the diversion of the $1 billion may have impacted on the timely implementation of Non Revenue Water reduction projects.

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