Audit Reveals How Sh151 Million Was Wired To A Secret City Hall Account Pointing To Fraud

Nairobi City County officials are on the spot after a damning audit exposed how they secretly opened an off-the-books bank account and funneled over Sh151 million into it within months, with no documentation, no known signatories and no legitimate explanation for its existence.

The explosive revelations by Auditor General Nancy Gathungu paint a picture of systematic fraud at City Hall, where public finance controls were brazenly bypassed to create what auditors describe as a ghost account that received massive unexplained payments yet was never reflected in official county records.

The account, dubiously titled “NCC Imprest Operations Account,” was opened at a commercial bank in November 2024 without following any of the stringent legal procedures that govern county finances. Within weeks of its creation, the money started pouring in.

A supplier transferred Sh98.1 million into the account on November 25, 2024. Two months later, another Sh53.5 million landed in the same account on January 22, 2025. After deducting minor bank charges, the balance stood at a staggering Sh151.7 million by June 30, 2025, money that exists in financial limbo with no trace in Nairobi County’s formal accounting system.

What makes the scandal particularly brazen is that county officials have refused to provide even basic information about the account. They have not disclosed who authorized its opening, who the signatories are, or why an account supposedly meant for expenditure was only receiving money but never making payments.

“The authority to open the account was not provided, and there was no justification provided for establishing an imprest operations account. Further, the signatories to the account were not disclosed, and no explanation was provided for operating an expenditure account that only received revenue,” the audit report states in scathing terms.

The account was structured to appear as an expenditure facility, a type of account typically used to manage operational costs and make payments to suppliers and service providers. However, audit records show it functioned exclusively as a revenue channel, receiving large wire transfers with no corresponding invoices, contracts or supporting documents to explain what the payments were for.

Auditors found no cash books, no bank reconciliation statements, no invoices from the entities making the transfers, and no documentation whatsoever linking the funds to any legitimate county business. The money simply appeared and sat there, controlled by unknown individuals operating in complete secrecy.

The latest audit report covering the financial year ending June 2025 reveals that this secret account is just the tip of the iceberg in what appears to be endemic financial mismanagement and potential looting at City Hall under Governor Johnson Sakaja’s administration.

Auditors also flagged Sh16.4 million in questionable overseas travel and training expenses. Of Sh798 million reviewed for foreign trips, at least Sh16.4 million lacked basic documentation such as travel approvals, boarding passes, visa stamps, attendance registers or post-trip reports.

In the most suspicious case, county officials claimed to have spent over Sh7.2 million on a sustainability training program in Singapore scheduled for February 2025. However, auditors found no air tickets, no visas, no insurance records and no procurement documents for the trip, raising serious questions about whether the journey ever happened or whether the money was simply stolen.

The audit found that in several cases, per diems were paid beyond approved event dates, accommodation costs were covered despite sponsor commitments to provide lodging, and unauthorized rates were applied to inflate payments. Officials made advance payments before trips occurred, prepared paperwork after events supposedly ended, and procured services that had already been contracted elsewhere, painting a disturbing picture of a system where oversight has completely collapsed.

Auditors also identified Sh16 million in non-exchange receivables that could not be supported with ledgers, invoices or contracts, making it impossible to verify whether the debts are legitimate or will ever be recovered. County officials failed to account for bad and doubtful debts, a failure that artificially inflates both receivables and total assets on Nairobi County’s financial statements.

On Thursday, senior officials from Governor Sakaja’s executive committee appeared before the Nairobi County Assembly’s Public Accounts Committee to answer for the audit findings. Members of the County Assembly signaled a tougher stance on accountability, with committee chairperson and Ngara MCA Chege Mwaura warning that the hearings would expose how public funds have been misused.

“It is important for Nairobi residents to understand how their taxes are being spent,” Mwaura said, adding that the committee is working closely with officers from the Auditor General’s office and has already scheduled appearances for all implicated officials.

The scandal comes at a time when Nairobi County is drowning in over Sh100 billion in debt, including billions owed to suppliers, Kenya Power, and law firms. Earlier audits revealed that City Hall operates 23 unauthorized commercial bank accounts instead of maintaining its funds at the Central Bank of Kenya as required by law. The county has also been accused of removing Sh39.8 billion in fake supplier bills from its books without proper documentation.

The secret account revelations have reignited questions about financial governance under Governor Sakaja, who came into office in 2022 promising transparency and fiscal responsibility. Critics say the pattern of unauthorized accounts, missing documentation and unexplained expenditures suggests either gross incompetence or deliberate theft of public funds on a massive scale.

As investigators probe deeper into the Sh151 million mystery account, one question looms large over City Hall: if officials won’t even say who controls this account or why it exists, what else are they hiding from the public?

The Auditor General has demanded full disclosure and accountability, warning that the unexplained transactions expose serious weaknesses in Nairobi County’s financial controls and point to potential criminal activity that must be investigated and prosecuted.