Governors continue to defy warnings from oversight agencies by operating illegal bank accounts for county operations, which have now reached 2,421 as of September 30, 2024. This marks an increase of over 400 accounts compared to the 2,000 reported during the first nine months of the previous financial year (2023-24).
Data from the Controller of Budget (CoB) for the first quarter of the current financial year reveals Nakuru leads with 301 commercial bank accounts, followed by Bungoma with 300, and both Baringo and Kiambu with 292 each. Machakos, Elgeyo Marakwet, and several other counties also operate numerous accounts, often in violation of public finance laws.
Notably, Nairobi, Narok, and Nyandarua did not disclose their account numbers, with Nyandarua previously flagged for 86 accounts not grounded in the law. Laikipia similarly failed to provide details on executive accounts, reporting only three under the county assembly’s management.
Regulations under the Public Finance Management (PFM) Act require county government accounts to be opened and maintained at the Central Bank of Kenya (CBK), with exceptions allowed only for petty cash and revenue collection accounts. However, the report by CoB Margaret Nyakang’o highlighted that many counties continue to disregard these regulations, complicating the tracking of public expenditure.
Nyakang’o recommended strict adherence to the law, prompting resistance from governors. Council of Governors Chair Ahmed Abdullahi defended the practice, stating that counties lawfully operate these accounts under provisions such as the Facility Improvement Financing Act, 2023, which allows revenue retention and expenditure in commercial bank accounts.
Abdullahi added that some accounts are mandated by conditions tied to development partner grants, requiring special-purpose accounts for project-specific funds. He argued it is impractical for counties to operate only one account without violating existing laws, citing revenue collection and project requirements as reasons for the numerous accounts.
Despite the explanations, the CoB report flagged counties like Bungoma, Migori, and Machakos for sharp increases or high numbers of accounts. For example, Bungoma reduced its accounts from 352 in the previous year to 300, while Kiambu’s surged from 52 to 292.
The numerous accounts, Nyakang’o noted, hinder budget implementation and financial accountability. She also criticized counties for late submissions of budgetary documents, delaying the release of implementation review reports.
Nyakang’o reiterated the need for compliance with financial regulations, emphasizing that only specific exemptions are allowed under the law.
