- County Treasury diverts funds requisitioned from the County Revenue Fund to unintended payments
- The Auditor General has flagged Nairobi county as having a debt of Kshs.118 billion in pending bills
By Adieri Mulaa
Utawala Ward Member of County Assembly Patrick Karani avers that Nairobi City County Executive has consistently, and without approval of the House, diverted funds requisitioned from the County Revenue Fund (CRF), to make unintended payments.
Karani emphatically told the Nairobi City County Assembly plenary session, that mismanagement of the County Revenue Fund by the County Executive has caused non-payment of contractual obligations, wage bills and other services at City Hall.
The county legislator was addressing the plenary session chaired by the Speaker Ken Ng’ondi on Tuesday, September 23, 2025 when the House resumed from long recess.
Such diversion of monies from the CRF account by the County Executive, he said, is a blatant disregard of the legal and constitutional provisions governing public finances, Karani told the Members.
Karani has sought a comprehensive report from the Sectoral Committee on Finance, Budget and Appropriations on the matters raised.
He wants the Committee is chaired by Mabatini Ward MCA Wilfred Odalo, to report on the contractors retention monies. The money is supposed to be paid to contractors at the conclusion of their ‘defects liability periods’.
Further, the Member also seeks the Committee findings on compensation of employees. The County Treasury requisitions for full gross salaries, which include staff statutory deductions, and monies for vital schemes such as retirement benefits, health insurance and loans, he noted.
”It is imperative that funds withdrawn by the County Treasury from the CRF account must be used strictly for the purposes which the approval was granted”, the House was told.
Mr Karani pointed out that this pertinent principle that is reinforced by the Public Finance Management Act, on matters of financial accounting.
In a terse statement, the MCA cites the County Treasury over malpractices involving contractors’ retention monies, non-remission of employees’ statutory deductions and perpetual salary delays, as critical areas of concern in the county government.
The House heard that although the County Treasury requisitions for gross salaries from the CRF, monies intended for statutory dues, staff retirement benefit schemes like the National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF), and the Higher Education Loans Board repayments are misappropriated.
Effectively, City Hall, with an establishment of about 19, 000 employees deducts all statutory dues, including Pay As You Earn (PAYE), Housing Levy, and other third party remittances intended for Saccos, bank loans, welfare contributions, and insurance premiums, but the monies are not remitted accordingly.
Karani pointed out that this not only violates several key pieces of legislation, including the Employment Act and the Public Finance Management Act, but also constitutes gross exploitation of our public servants, exposing them to loss of their benefits.
Six months ago, Senate County Public Accounts Committee (CPAC) chairperson Moses Kajwang’ told the Senate plenary that in the Auditor General’s report for the 2024/25 Financial Year, Nairobi county had pending bills worth Kshs. 118 billion.
In his statement, Karani told the House that practices of the County Treasury were beyond procedural error. He said it was a fundamental breach of trust and form of financial misconduct.
”Such practices are corrosive to public institutions and they erode public confidence the ability to govern effectively”, the plenary heard.
The Utawala Ward MCA wants the Committee led by Odalo, to inquire into and report on the total amounts of money that has been requisitioned by the County Treasury over the last two financial years.
”The Committee should also provide a detailed breakdown of the total amounts requisitioned for employees’ compensation (salaries), juxtaposed with the actual remittances to the respective statutory bodies” said the MCA.
Karani further seeks a report by the Budget Committee to be tabled in the House, stating the actual amounts of money that were disbursed for “contractors’ retention monies” over the past two financial years.
”As Members of this August Assembly, we are the guardians of public finances. It is our duty to ensure that all county funds are managed with integrity, transparency and strict adherence to the law”, Karani told the plenary.
The MCA informed the House that funds duly requisitioned and approved for payment to contractors at the conclusion of their “defects liability periods” have been diverted to other purposes.
“Mr Speaker, the diversion has led to unjustifiable delays in payments, leaving contractors in distress, and exposing the county government to significant legal and financial liabilities”, the second term county legislator said.
Speaker Ng’ondi directed the Budget Committee to table the report in the plenary in three weeks.
