Details emerge on transfer of Sh357m city bursary money to wrong account

Nairobi County Assembly Budget and Appropriations Committee Chairman Robert Mbatia (left) and his vice chair Patrick Karani when they met Co-op Bank officials and County Education executive Janet Ouko over the Sh357 million bursary fund saga on August 1, 2018. PHOTO | COLLINS OMULO | NATION MEDIA GROUP

What you need to know:

  • Ms Waithaka went on to reveal that it took up to May 29 for the county to act and move the money to the right account.
  • This raised suspicions from the members of the committee chaired by MCA Robert Mbatia who questioned the intention of the delay.
  • Mr Mbatia further took issue with the bank for its failure to notify the county in writing for ease of traceability.

Fresh details have emerged over the controversial transfer of Sh357 million bursary fund that was moved to a wrong account in May.

This comes after Nairobi City County Assembly Budget and Appropriations Committee on Wednesday heard that the executive took eight days to reverse the wrong transfer even after being alerted by the Cooperative Bank over the same.

Appearing before the committee, Cooperative Bank Head of Corporate Department Jackie Waithaka told the committee that the money was deposited in the wrong account, University of Maryland account, on May 21 from the county’s recurrent account at Central Bank of Kenya and the bank immediately notified the signatories to the account the same the transaction as done.

SLOW TO ACT

Ms Waithaka went on to reveal that it took up to May 29 for the county to act and move the money to the right account – the bursary account.

“We had signed a contract and were expecting the funds to be deposited but once they did they were deposited in the Maryland account. We immediately notified our client via a telephone call and urged them to give us a directive on what to do,” said Waithaka.

The revelation from the bank contradicted an earlier statement that had been released by acting Finance executive at the time Charles Kerich who said they received the matter on May 29 and rectified it immediately.

This raised suspicions from the members of the committee chaired by MCA Robert Mbatia who questioned the intention of the delay and whether the transfer was not an error but a deliberate omission meant to benefit certain individuals.

NO MONEY LOST

“How can you explain why the money took more than one week to be transferred to the intended bursary account yet both parties were aware that it was a wrongful transaction?” posed Mr Mbatia.

While it was established that no money was lost in the process, members of the committee have now raised concerns that the money could have been used to trade to accrue interest.

But the bank’s representatives said that the account is one of the special ones that they have with City Hall and which does not accrue any interest.

Mr Mbatia further took issue with the bank for its failure to notify the county in writing for ease of traceability.

The committee further heard that the Education ministry does not have a signatory to the bursary fund, raising accountability concerns.

The county chief finance officer and head of treasury are the two signatories to the fund that is meant to assist needy students from Nairobi's 85 wards.