Progress made in technical assistance to County Governments Kenya School of Government (KSG) 3 December 2018 Transition to County Government Reporting Francis Nzau, ACCA PwC

1. Water Services Providers (WSPs) Under The Water Act, 2016 WSPs are now the responsibility of county governments who have the mandate to provide water services. WSPs are responsible for provision of water services within the area specified in their licenses and development of county assets. Before the Water Act 2016, was enacted, WSBs would sign service level agreements with WSPs and the regulator issues licenses to WSB. Under the new Water Act 2016, WSPs must apply again for new licenses to WASREB.

Important sections of the Water Act to consider 5. Every water resource is vested in and held by the national government in trust for the people of Kenya. 6. The Authority established in section 11 shall serve as an agent of the national government and regulate the management and use of water resources

Important sections of the Water Act to consider Section 154. Water service providers to continue to operate The existing water services providers shall continue to operate as the county water services providers or cross county water services providers as the case may be within the period specified in the transfer plan published by the Cabinet Secretary.

2. Important sections of the Water Act to consider Sec 77: establishment of water service providers (l) A county government shall establish water services providers. (2)In establishing a water services provider, a county government shall comply with the standards of commercial viability set out by the Regulatory Board. (3) A water services provider established under this section may be a public limited liability company established under the Companies Act, 2015 or other body providing water services as may be approved by the Regulatory Board. (4) A company intending to be licensed as a water service provider shall submit to the Regulatory Board its memorandum and articles of association that conform to the guidelines developed and approved by the Regulatory Board.

2. Important sections of the Water Act to consider Sec 83. County owned water service provider to hold assets for the public A county or a cross-county owned water service provider established as a public institution and operating and providing water services shall hold the county or national public water services assets on behalf of the public.

2. Important sections of the Water Act to consider Sec 84. Cabinet Secretary to make Regulators 84. (1) The Cabinet Secretary shall make Regulations for the transfer of national public assets to the county water services providers in accordance with any law regulating the handing over and disposal of public assets. (2) The Regulations shall include arrangements to protect public assets incase of private sector participation such as the separation of operation asset holding and development

2. Important sections of the Water Act to consider Sec 106. Duty to enforce Regulations on water services It shall be the duty of every county government executive to monitor and enforce the applicable Regulations made under this Act, and any county government executive who fails to do so shall be liable to an order by the Regulatory Board to take such action to enforce such Regulations as shall be specified in the order. (2) Where a county government executive considers that the operation of any such Regulations would be unreasonable in any particular case, a county government may, in consultation with the Regulatory Board, by notice to any affected party, reduce or dispense with the requirements of the regulation.

Reporting Expectations as we transition to County Government Report As we provide technical support to County Governments through National Treasury, we expect that Water Companies will adhere to PFM Reporting timelines. In particular: Section 166 requires county treasuries to consolidate quarterly reports of county government entities a month after the end of the quarter, the same having been prepared 15 days after the end of the relevant quarter and submit to the county assembly with copies to the National Treasury, COB, & CRA Section 81 of the PFMA requires all public entities to submit their annual accounts to the Auditor General for Audit by 30th September.

Reporting Expectations as we transition to County Government Report Annual Reporting Timelines Section 164 (4) Within three months after the end of each financial year, the accounting officer for an entity shall: submit the entity’s financial statements to the Auditor-General; and deliver a copy of the statements to the relevant County Treasury, the Controller of Budget, and the Commission on Revenue Allocation. Section 163(4) (Consolidation) Not later than four months after the end of each financial year, the County Treasury shall: submit the financial statements and summaries referred to in subsection (1) to the Auditor-General; and deliver a copy to the National Treasury

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