City Hall to close 30 dormant commercial bank accounts

At least 30 dormant bank accounts at City Hall will be closed as the county government of Nairobi seeks to streamline management of county funds.

Before closure, the funds will be transferred to the County Revenue Fund account.

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 will be transferred to the County Revenue Fund," the document reads.

However, this is not the first time the county government is announcing plans to close the accounts.

Since devolution, various reports have indicated that the county government has several unused bank accounts.

A report by the Auditor General in 2014, revealed that during the transition period City hall had 31 accounts. 

Three years later, a report by the Nairobi County Assembly Finance, Budget and Appropriations Committee in 2017 revealed that the 31 accounts were still active.

The report also highlighted that 27 of the accounts allegedly opened without following due diligence were with commercial banks.

Cooperative Bank held 15 accounts, two accounts at Equity Bank, seven at National Bank, two at Kenya Commercial Bank and one at Chase Bank.

The other four which include the county's development account, road maintenance account, revenue account and the recurrent account are in Central Bank of Kenya.

The Public Finance Management Act, 2012, states that the county should have a development fund account to receive development monies from the Central Bank of Kenya and a revenue fund account for disbursements from the Exchequer and internal revenue.

It also highlights 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.

The Budget committee poked holes and began investigations into the alleged 31 bank accounts as the law only allows two main accounts suffice.

It was also discovered that some of the 31 accounts were dormant or with few transactions while others were used 'when need arises.'

As a result, the county administration led by former Governor Mike Sonko pledged to close all unneeded bank accounts but no actions were taken.

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.

Despite the audit, City Hall still didn't close the accounts.

(Edited by Bilha Makokha)