Kenya Power is opposed to President Uhuru Kenyatta’s guidelines that limit state company board meetings to four to six.
The power distributor held 90 meetings at the end of the year starting in June, which translate into a board meeting every four days .
Auditor General Nancy Gathungu reported the anomaly in her most recent audit of the company, stating that the high number of meetings was inherently operational.
President Kenyatta wrote in a circular of March 11, 2020 stipulated that board meetings should be limited to a minimum of four and a maximum of six per fiscal year.
The guideline provided that the same principle should apply to the respective committees of the boards of the state bodies. < / p>
The circular also required that any additional board meetings, including special meetings, be substantiated and the source of funds and implications given .
Such requests must be submitted by the competent cabinet S. Secretary in consultation with the State Corporations Advisory Committee.
Gathungu expressed concern that Kenya Power’s board of directors violated the policy during the year by holding 21 full board meetings and 69 of its associate committees .
“Although the reasoning for the approval request was submitted to the Cabinet Secretary and approved, the source of funding and cost were not taken into account due to the large number of additional meetings, as there was no approved reallocation of the budget,” said Gathungu.
During the audit period from June 2020 to June 2021, the board members received 16.7 million Sh. in allowances, 4.8 million Sh. in directors’s fees and Sh 9.6 million. Paid in board fees and salaries for the CEO – all adding up to Sh31 million.
According to Kenya Power’s Board Compensation Policy, directors are entitled to seat, lunch, overnight allowances and mileage refunds for each board meeting.
The chairman receives a fee of Sh80,000 p month and a company car, while director fees are paid annually upon approval by the shareholders – now at 600,000 Shillings as well as the chairman for attending a duly convened and constituted meeting of the board of directors or one of the committees.
Non-executive directors will also receive an allowance for each day of travel from their regular station to. Paid company duties.
All non-executive directors are also entitled to medical coverage for their individual medical needs, which include outpatient and inpatient services.
Kenya Power pays the directors Sh20. 000 airtime allowance per month, lunch allowance of Sh2,000 and Sh18,200 overnight allowance outside of Nairobi.
On the exam, Gathungu warned that Kenya Power is broke and will soon fail to meet important material commitments, which is uncertain of its uncertainty Recovery.
The company’s liabilities exceed assets by Sh66.5 billion with auditors alerted that negative working capital has persisted for five consecutive years.
They noted the viability and Feasibility of the strategies pursued by the board of directors and management in question in order to change the fortunes of the company having brought intentional results. This condition, together with other facts, indicates the existence of a material uncertainty that can raise serious doubts about the company’s ability to continue as a going concern. “Said the auditor.
It revealed that consumers over the year 32 billion Sh. in system losses from the 12,202 GWh units purchased from power generators.
Of the units purchased, only 9,203 GWh were sold to consumers, translating into a loss of 23.95 percent – roughly 39 billion shrimp led.
Energy regulator EPRA had approved system losses of up to 19.9 percent – approximately $ 32.96 billion, which is considered normal loss.
The A surplus of 4.05 percent – starting from 6.7 billion Sh., Was covered by the company, increasing the company’s operating costs as the industry regulator allows the company up to 19.9 per. to calculate percent of electricity losses to consumers, “said Gathungu.
(Edited by Bilha Makokha)