Idle Millions in Dormant State Funds Flagged by Gathungu


An audit has revealed that several government-funded accounts, including the one for Internally Displaced Persons (IDPs), hold hundreds of millions of shillings lying idle.

Auditor General Nancy Gathungu has criticized the National Treasury, along with the National Assembly, for the delayed closure of these funds.

Idle Millions in Dormant State Funds

The Idle Millions in Dormant State Funds

In addition to the IDP fund, other dormant accounts include the Rural Enterprise Fund, Treasury Main Clearance Fund, Provident Fund, Kenya Local Loans Support Fund, and the fund for widows and orphans of Asians who served the government during the independence era.

Although the National Treasury had established a task force to wind up these dormant funds, which collectively amount to Sh600 million, no progress has been made.

Regarding the Rural Enterprise Fund, a winding-up order was issued by the Minister for Finance in September 2012, and revocation orders were approved by President Uhuru Kenyatta’s Cabinet. However, no evidence was provided to confirm the passage of the Repeal Act by the National Assembly.

The IDP cash fund operated multiple bank accounts, but a review conducted by Gathungu revealed a balance of Sh272.6 million as of June 30, 2022, despite the completion of grant disbursements under the cash payment program. The Treasury has been criticized for failing to invest or place the money in an interest-earning account for the fund, which has had no movement for two and a half years.

The government clearing agency fund shows a balance of Sh300 million in receipts and Sh52 million in outstanding payments. However, these amounts lack support from ledger, trial balance, or verifiable documents.

The Kenya Local Loans Support Fund has a bank balance of Sh9 million and an investment balance of Sh71 million, which represents interest from the fund. This dormant fund has not been active since June 2006 and was scheduled for closure by the National Treasury task force on dormant funds.

The provident fund is facing an outstanding debt of approximately Sh4 million owed by a defunct state corporation. Furthermore, there are no surviving beneficiaries for this fund.

The Asiatic Widows and Orphans fund has been dormant since June 2002, following the death of the sole surviving beneficiary. Despite being due for closure, the necessary law has yet to be enacted due to delays by MPs.

Gathungu emphasizes the lack of evidence confirming the passage of the Repeal Act by the National Assembly, resulting in prolonged delays in winding up these funds. These delays have led to wastefulness in the use of public resources and the unnecessary burden of maintaining records for dormant funds.

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