Data by the Office
of the Controller of Budget revealed that in just six months of the current 2025-26
financial year, the STA has already consolidated Sh1.5 trillion from previously
fragmented accounts held across the public sector.
This consolidation,
according to deputy controller of budget Stephen Masha has led to a reduction
in the government’s reliance on overdrafts from the Central Bank of Kenya compared
to a similar period last year.
Appearing before
the Finance and National Planning Committee, Masha said the system is designed
to stop a decades-long practice in which government institutions held idle cash
in commercial bank accounts while the National Treasury borrowed expensively
from the domestic market.
“If the current
trend holds to the end of the financial year, the government stands to save about
Sh3 billion, purely from reduced overdraft usage and avoided transactional
leakages,” Masha told the Committee chaired by MP for Molo Kuria Kimani.
From the session
it emerged that, the government is now in the final stages of onboarding all
state entities, including ministries, departments, agencies and donor-funded
programmes into the unified account.
If fully
implemented, Masha said, the STA will “eliminate the absurdity of government
borrowing its own money,” a practice he argued has contributed to unnecessary
debt accumulation, inefficient cash management, and costly overdrafts at the Central
Bank of Kenya.
He added that
further savings were expected as more accounts some still held at the Central
Bank but not yet mapped into the STA are migrated into the new system.
Despite the early
gains, Masha warned that the absence of comprehensive regulations tailored
specifically to the Controller of Budget’s operations had slowed down the full
implementation of the STA.
“We need
regulations that clearly guide how requests for resources are made, processed,
and monitored. This will ensure predictability for all institutions and reduce
the current ambiguities that contribute to misuse of funds,” he said.
Although the
National Treasury approved earlier regulations over a decade ago, the
then-existing Senate did not, leaving a regulatory void that still affects
uniform application across government entities.
He noted that
legal and procedural inconsistencies had allowed cases where institutions
requested funds without fulfilling requisite conditions, leading to confusion
at both the Controller’s office and at the accounting-officer level.
Masha cautioned
that the Controller of Budget’s office is itself constrained in carrying out
the reforms needed to operationalise the STA smoothly.
The institution is
seeking an additional Sh603.6 million in the upcoming 2026-2027 budget to
strengthen systems automation, support public education, facilitate litigation,
and enhance county-level supervision.
However, of its
proposed Sh1.6 billion budget, only Sh913.7 million has been allocated by the
National Treasury—leaving a shortfall of nearly Sh700 million.
Underfunding, he
said, would jeopardise 17 ongoing and planned projects, including the
development of CoB-specific regulations and rollout of enhanced monitoring
tools.
“These instruments
are vital for closing loopholes such as unauthorised expenditures, diversion of
funds, or the submission of payment requests without proper documentation,” he
told MPs.
Among the planned
reforms is the full automation of expenditure monitoring and the integration of
all accounting officers into the Government Online Market Place (GOMP) and
related digital oversight systems.
Masha said
training is already underway for staff who will use the platform to scrutinize
every payment request made by national and county entities.
He noted that many
of the financial irregularities flagged in recent months, ranging from
unsupported expenditure to diversion of funds stemmed from weak verification
processes across ministries and agencies.
“We are trying to
squeeze out the opportunities for abuse by ensuring all payment vouchers,
invoices, and cash flow requests are visible end-to-end,” he said.
