More scrutiny on power firm books
Auditor General Edward Ouko has warned Kenya Power it will now have to contend with more scrutiny from his office in the wake of the dismissal of some senior managers over corruption claims.
He said the sacking and consequent prosecution of the officials had left the firm susceptible to more theft and manipulation of its books.
In an audit report on the power company’s performance in the financial year to June 2018, Mr Ouko said his office would deeply scrutinise the operations of the company to guard against further theft as well as ensure strict adherence to procurement laws, particularly when buying transformers.
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“A majority of the company’s senior managers were arrested and charged with corruption at the High Court in July 2018. This event triggered a heightened risk that the financial statements might have been misstated,” he said in his report in which he gave Kenya Power a qualified opinion which meant a level of dissatisfaction with the presentation of its financial statements.
“In such instances, the International Standards of Supreme Audit Institutions (ISSAI 1240) requires that the auditor conducts enhanced procedures, including the possible involvement of forensic experts to address the heightened risk of fraud and errors and assess whether the risk is of such significance as to have material impact on the financial statements.”
The utility firm posted a Sh1.9 billion net profit in the financial year to June 2018, a 63 per cent decline from Sh5.2 billion in 2017. The firm restated its 2017 profits from Sh7.4 billion to Sh5.2 billion.
The Auditor General’s office will also closely monitor the acquisition, installation and later disposal of transformers by the company.
This will be in addition to a re-examination of the mechanisms that Kenya Power uses in formulating customers’ bills following claims of overbilling of its domestic power users.
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