NWC – $1.78 billion missing from K-Factor Account

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Auditor General's Findings

NWC did not lodge $0.7 billion collected from customers into the designated K-Factor Account. Over the period April 2008 to September 2014, NWC collected approximately $ 16 billion for K-Factor from customers.

However, only $15.3 billion (94 per cent) was deposited into the K-Factor bank account. NWC transferred $1 billion from K-Factor funds to finance administrative expenses. NWC established a Project Management Unit (K-Factor Unit) to manage the K-Factor programme.

In a letter dated January 22, 2013, OUR agreed with NWC decision that the administrative activities of the K-Factor Unit would by NWC. However, NWC instituted a supervision cost of 8.5 per cent of project cost, which amounted to $1.08 billion, and was transferred to NWC operational bank accounts in August 2013. NWC did not present the requisite approval from OUR for the imposition of the supervision cost.

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Permanent Secretary (current): Audrey Sewell

Breach Category: Resource Management

Permanent Secretary (at breach):

Breach Type: Unsupported Decisions

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