Treasury on the spot for failing to wind up dormant funds

Auditor-General Edward Ouko has put the Treasury on the spot for failing to wind up many dormant funds despite Parliament sanctioning their closure six years ago.

He says the Treasury constituted a task force in 2013 to review and recommend the closure of such dormant funds.

“The task force has endlessly been seeking extension of time to finalise their work,” said Mr Ouko in a qualified audit for the Treasury Main Clearance Fund for the year to June 2018.

The Treasury has not provided any plausible information on the progress the task force has made over the last five years of its existence, he said.

Mr Ouko said the Treasury fund had not been in operation for a long time. The fund was meant to facilitate overseas payments in foreign currency for imports and pensions.

The National Assembly’s Public Accounts Committee consequently made a recommendation for the fund to be wound up including others that are dormant.

“However, over the years and despite the recommendations from the Public Accounts Committee, the National Treasury is yet to close the fund’s books of account and has continued to prepare and submit the fund’s financial statements for audit,” Mr Ouko said.

He said the financial statements contain brought forward balances whose accuracy, existence and validity could not be vouched for. In 2013, Parliament asked the Treasury to wind up all dormant funds that had remained unutilised for years.

The Treasury then disclosed that it was holding Sh802 million in six dormant accounts.

The defunct National Assembly’s Local Authorities and Funds Accounts Committee recommended that another eight accounts be restructured to make them more useful.

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.

Parliament found that the Asiatic Widows and Orphans Pension Fund, Rural Enterprises Fund, Local Loans Support Fund, Sinking Fund, Rural Enterprise Fund and the Tourist Development Fund were inactive.