Controller
of Budget Margaret Nyakang’o has flagged the accounts in her latest report,
raising fresh concerns over transparency and accountability in the management
of billions of shillings in public funds.
The County
Governments Budget Implementation Review Report for the first nine months of
the 2025-26 financial year shows counties had reported operating 6,585
commercial bank accounts by March 31, 2026. This is an increase from 6,386
accounts reported three months earlier.
Kitui
recorded 493 illegal accounts, followed by Nakuru with 311 and Kirinyaga with
305. Homa Bay ranked fourth with 274 accounts, ahead of Makueni (254), Kericho
(242), Kwale (240), Embu (239), Siaya (228) and Machakos (225).
However,
despite the increase, county governments had not provided the Controller of
Budget with copies of authorisation letters for the accounts, contrary to the
Public Finance Management (County Governments) Regulations, 2015.
The CoB
warned that the omission makes it difficult to verify the legality, purpose and
completeness of the commercial bank accounts maintained by county entities.
“County
Treasuries had not submitted copies of authorisation letters for these accounts
to the Controller of Budget, as required, thereby limiting transparency and
assurance regarding the number and purpose of commercial bank accounts
maintained by counties,” the report states.
The
findings come against the backdrop of growing scrutiny over public financial
management at the counties.
There are
also concerns over pending bills, weak own-source revenue collection and low
development spending already dominating discussions on devolution.
Under
Regulation 81 of the Public Finance Management (County Governments)
Regulations, county governments are required to operate their bank accounts
through the Central Bank of Kenya.
On another
concern, the report shows that the number of commercial bank accounts increased
by 199 within just three months, from 6,386 in December 2025 to 6,585
by the end of March 2026.
While some
counties reported no changes in the number of accounts they operated, others
recorded notable increases and decreases, underscoring the fluid nature of
county banking arrangements.
The
unauthorised commercial bank accounts form part of a broader list of governance
weaknesses identified by the CoB during the review period.
Besides the
banking concerns, the report cites high levels of pending bills amounting to
Sh156.84 billion, weak own-source revenue performance and delays in
operationalising County Assembly funds.
Also
flagged are low absorption of development budgets and continued use of manual
payroll systems despite government directives requiring migration to the Human
Resource Information System.
The report
also points to delays in submitting financial and non-financial reports, making
it more difficult for oversight institutions to monitor the use of public
resources effectively.
According
to the Controller of Budget, these weaknesses collectively undermine prudent
financial management and slow the implementation of county development
programmes.
To address
the banking concerns, Nyakang’o has directed county governments to submit
copies of authorisation letters for all commercial bank accounts maintained by
county entities.
