Treasury CS Rotich: We have no records of illegal accounts

Treasurer CS Henry Rotich address the Parliamentary Committee on Public Accounts to answer charges of corruption allegations at Parliament Buildings Nairobi. Rotich says Treasury does not know the number of unapproved bank accounts operated by State ministries, departments and agencies. (PHOTO: MOSES OMUSULA/ STANDARD)

Treasury does not know the number of unapproved bank accounts operated by State ministries, departments and agencies.

Treasury Cabinet Secretary Henry Rotich told the National Assembly Public Accounts Committee (PAC) that the Government does not have such records as it is waiting for an inventory from commercial banks.

"If there are accounts that have been operating without approvals, we wouldn't know," Mr Rotich told MPs.

He had appeared before the watchdog team to respond to queries relating to the National Youth Service scandal in which the public lost over Sh791 million in dubious bank transactions. The CS was accompanied by his Principal Secretary Kamau Thugge who confirmed the Government was in the dark over the number of illegal accounts opened by State bureaucrats.

"What we have done is to write to banks and ask them to identify accounts that belong to public entities to give us an inventory. We now want to write to Government ministries, departments and agencies. We want to make it impossible for ministries, departments and agencies to open an account without Government approval," Mr Thugge said.

Operating an unapproved account makes it possible for corruption cartels in Government to steal money from the public. It means that unscrupulous Government officials can open accounts, make themselves signatories and operate them in the knowledge that they cannot be traced for auditing purposes.

MPs were surprised that Government agencies continue to operate illegal accounts even after the enactment of the Public Finance Management Act that imposes penalties on such operations. The revelations also cast a long shadow on the operations of county governments that could also be taking advantage of the lapse.

"There has to be a way of the Government finding out. Someone may transact millions into their accounts and go out of the country... We are looking at elections next year. There should be a repository showing the accounts held by entities such as county governments. It is a major omission," said committee chairman Nicholas Gumbo (Rarieda MP).

"Now that the PFM Act is in force, what action have you taken? If they are still operating, then there is something very wrong," Mathioya MP Clement Wambugu said.

Operating such accounts attracts tough sanctions against accounting officers. While Treasury argued that his hands were previously tied due to a legal vacuum, correspondence as far as 1997 indicated that such approvals were a common requirement by Treasury through use of circulars.