Kenya: the town hall will close 30 dormant bank accounts


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

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

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

“All dormant bank accounts in the county’s name will be closed on a priority basis. All account balances will be transferred to the county revenue fund before they are closed,” part of the county treasury plan reads.

In 2014, a report by then-auditor general Edward Ouko found that city hall had 31 accounts during the transition period.

31 bank accounts

Three years later, a 2017 report by the Nairobi County Assembly Budget and Appropriations Committee still showed that all 31 bank accounts were still active.

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

Of the 27, Cooperative Bank had 15 accounts, two 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 maintains the development account, the road maintenance account, the revenue account and the recurring account.

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

After the Assembly committee questioned the said accounts, former Gov. Mike Sonko said his administration would shut down unnecessary bank accounts.

This was after the budget committee started investigating the questionable bank accounts when the law says two main accounts are enough.

Few operations

The report accused the county government of having all the accounts, but some of them were dormant or with few transactions and others were used “when needed.”

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

However, it further provides that the executive has the power to open other accounts to meet the needs of the county provided it is approved by the county assembly or attached to legislation.

Nothing happened and in 2018 a KPMG audit found that the town hall still operated at least 32 bank accounts contrary to the Public Financial Administration Act which requires all county government accounts to be opened to the public. Central Bank of Kenya.


About Virginia Ahn

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