MPs on the spot for failing to wind up 8 dormant funds
The National Assembly has opened public participation for two bills which form part of the conditions attached to the Sh139 billion soft loan secured from the World Bank. FILE PHOTO | JEFF ANGOTE | NMG
The Auditor-General Nancy Gathungu has questioned delays in the winding up of eight dormant funds, including those created in the colonial era, whose closure the Cabinet sanctioned two years ago.
Ms Gathungu says despite the Cabinet approving the winding up of the eight dormant national government public funds on March 2, 2021, the National Assembly had not cleared their dissolution.
In 2013, the Treasury disclosed to Parliament that it was holding Sh802 million in six dormant accounts.
Some of the accounts were created in the colonial era and, in some cases, the money is tied up in companies that have since been put under liquidation.
The Treasury last year tabled a list of the eight funds and asked Parliament to approve the dissolution of the inactive national government public funds.
Those approved for winding up are the Provident Fund, Government Clearance Agency Fund, Treasury Main Clearance Fund, Kenya Local Loans Support Fund, Asiatic Widows and Orphans Pension Fund and Rural Enterprise Fund.
“The Revocation Orders had not been acted upon by the National Assembly and the process of winding up the funds had not been completed by the time of the audit,” Ms Gathungu said of the Government Clearing Agency Fund, which has been dormant for 10 years.
She said the Revocation Orders were submitted to the attorney general’s office for onward transmission to the National Assembly for approval of the winding up of the dormant funds on April 12, 2021.
The Treasury had formed a task force on the winding up of the dormant funds.
Thereafter, the Treasury sought and got a legal opinion from the Attorney-General to wind up the funds.
A Cabinet Memorandum on winding up of the dormant funds was forwarded to the Attorney-General in September 2019 who advised that draft revocation orders be prepared on the dormant funds.
Section 24(8) of the Public Finance Management Act empowers the Treasury Cabinet secretary to wind up a fund with the approval of the National Assembly, where it appears that the fund is not serving its intended purposes or has become defunct or dormant.
The Act requires that the National Assembly be satisfied that the Cabinet secretary has ascertained and settled any claims due to the members of the public from the fund and also any claims owed by the public to the fund are sorted out.
