Economy

Committee calls for probe into Sh76m secret account cash

CITY 1

The existence of the emergency account only came to light three weeks ago and was flagged for non-compliance with the Public Finance Management Act (PFM). PHOTO | FILE

The office of the Auditor General has been asked to look into three suspicious transfers of millions of shillings from the Nairobi County emergency account.

Sh76 million was transferred into an unnamed account at Citibank with the Public Accounts Committee (PAC) unable to ascertain who the signatories of the new account are.

“We could not ascertain exactly what the purpose was and to who. We have asked Kenao (Kenya National Audit Office) to conduct a special audit and give us a report in two weeks,” said committee chairman Robert Mbatia.

Acording to Mr Mbatia, the first transfer of Sh70 million was done on September 9 followed by two more transfers of Sh5 million and Sh1 million respectively, all within that month.

When he recently appeared before PAC, head of accounting Stephen Osiro who is one of the signatories to the emergency account gave a list of accounts operated by City Hall but none was held at Citibank.

Mr Mbatia said that they are awaiting directions from the Speaker Alex ole Magelo but added that they will be seeking closure or freezing of the emergency account.

The existence of the emergency account only came to light three weeks ago and it was flagged for non-compliance with the Public Finance Management Act (PFM).

READ: City Hall officials on the spot over secret account

Section 110 of the PFM Act allows Finance Executive to carve out part of the annual budget to establish an emergency fund if approved by the county assembly. The approval was never sought and the existence of the account was therefore termed illegal.

PAC members raised concerns that an account operating without their knowledge or that of Auditor-General could potentially be used to make unsanctioned payments.