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City Hall officials plan to legalise secret bank account

Nairobi City County officials are rushing to legalise an account whose opening and transactions have been fraught with irregularities.

County secretary Lillian Ndegwa told the Public Accounts Committee (PAC) that the Finance office was drafting regulations to be brought to the County Assembly to make the account compliant with the Public Finance Management Act.

Mrs Ndegwa admitted that the account was opened on August 31, 2013 by a resolution of the County Executive Committee through the sanction of the County Executive member for Finance, Gregory Mwakanongo.

EMERGENCIES

According to the law, the County Assembly has to ratify the account’s operations.

The account has no operational policy and is described loosely as created for the purpose of reinforcing other accounts in case of emergencies.

Mrs Ndegwa said that there were several requests from MCAs and the executive for money when county accounts were dry, so they decided to create one to cater for emergencies.

She told the committee that revenues were into the account and money could be drawn through a simple request.

“We needed money to use quickly in times of emergency like the City Park Market situation, so we created the emergency account to reinforce other normal accounts for this purpose,” Mrs Ndegwa said.

She stated that once the county assembly ratifies the account, it will be dedicated specifically to disasters.

“We are reading malice Madam CS, you want to go behind our backs and legalise an illegality,” said PAC chairman Robert Mbatia.

He questioned why the account was called ‘‘Emergency’’ yet it served other purposes.

AUDIT QUERIES

‘‘Why didn’t you call it Imprest Account or Revenue Account? We believe you wanted to hoodwink the bank because they know the law and would not have authorised its operations.’’

The account raised audit queries after PAC discovered that Sh76 million was transferred from it to unknown accounts.

During the PAC hearings, it was revealed that Sh70 million was moved from Nairobi County Emergency Fund account through Citi Bank to unknown recipients on September 9, 2014.

A further Sh6 million was transferred to separate accounts in a similar manner.

On Friday, Mrs Ndegwa denied claims of misuse of the funds, saying that the money was sent from the emergency account at National Bank to a revenue account at Cooperative Bank ‘‘to pay for other matters’’.

Mrs Ndegwa confirmed that she was a signatory to the account but could not recall the purpose of the transfers.