Kenya: City Hall to Close 30 Dormant Bank Accounts


Nairobi County government will close all its dormant bank accounts as it seeks to streamline management of county funds.

The new development follows several reports indicating City Hall has more than 30 bank accounts. According to the plan, any money held in the said bank accounts will first be transferred to the County Revenue Fund account before they are closed.

The plan is contained in the Nairobi City County Annual Development Plan for the financial year ending June 30, 2023.

“All dormant bank accounts under the county’s name will be closed as a matter of priority. Any balances in the accounts will be transferred to the County Revenue Fund before closing them,” reads in part the plan by the County’s Treasury.

In 2014, a report by the then Auditor General Edward Ouko revealed that City Hall had 31 accounts during the transition period.

31 bank accounts

Three years later, a 2017 report by the Nairobi County Assembly’s Budget and Appropriations committee still showed that the 31 bank accounts were still in operation.

According to the report, four of the said bank accounts are held at the Central Bank of Kenya and 27 with commercial banks with some allegedly opened without following due diligence.

Out of the 27, Cooperative Bank held 15 accounts, two accounts at Equity Bank, seven at National Bank, and two at Kenya Commercial Bank and one at Chase Bank. At the Central Bank of Kenya, it has the Development Account, Road Maintenance Account, Revenue Account and the Recurrent Account.

But this is not the first time the county government is announcing plans to close the many bank accounts.

After the assembly committee questioned the said accounts, former governor Mike Sonko said his administration would close unnecessary bank accounts.

This was after the Budget committee commenced investigations into the questionable bank accounts when the law says that two main accounts suffice.

Few transactions

The report fingered the county government for having all the accounts yet some of them were dormant or with few transactions and others were used ‘when need arises.’

According to the Public Finance Management (PFM) Act, 2012, the county should have a Development Fund account to receive money from the Central Bank of Kenya for development and a Revenue Fund account for receiving disbursements from the Exchequer and internal revenue.

However, it further provides that the executive has the authority to open other accounts to serve the county’s needs provided it is approved by the county assembly or pegged on legislation.

Nothing happened and in 2018, an audit by KPMG revealed that City Hall still operated at least 32 bank accounts contrary to PFM Act which requires all county government accounts to be opened at the Central Bank of Kenya.

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Source link : https://allafrica.com/stories/202110030037.html

Author : Nation

Publish date : 2021-10-03 14:56:37

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