NAIROBI, Kenya – The Controller of Budget (CoB) has launched an investigation into the proliferation of illegal bank accounts operated by county governments, raising concerns over potential misuse of public funds.
Appearing before the Senate in Naivasha, Controller of Budget Margaret Nyakang’o revealed that counties continue to open multiple accounts in commercial banks, violating public finance laws that require such accounts to be maintained at the Central Bank of Kenya (CBK).
“We are reviewing those accounts to establish when they were opened, who operates them, and for what purpose,” Nyakang’o told senators. “A comprehensive report will be provided.”
Nyakang’o further disclosed that some counties have been actively obstructing oversight efforts by denying her office access to their bank statements.
Without direct viewing rights, she said she has been forced to “beg” counties for financial records—requests that have largely been ignored.
The scale of the issue is significant. As of September 30, 2024, county governments were operating 2,421 accounts—an increase of over 400 accounts from the previous fiscal year.
Investigations have already flagged irregularities, with Nyakang’o citing cases where accounts opened as far back as 2013 continue to receive funds without the knowledge of current administrations.
“We found that new accounts were being opened frequently, and in some cases, signatories were not being properly managed,” she noted.
The Ethics and Anti-Corruption Commission (EACC) has separately reported that at least 26 counties are under investigation for financial misconduct.
Lawmakers fear that these unregulated accounts may be conduits for siphoning taxpayer funds.
Nyakang’o confirmed that her office is currently investigating 15 counties but said budget constraints have limited her ability to conduct a comprehensive review of all 47 counties.
The watchdog’s budget was slashed from Sh1.6 billion to Sh702 million, hampering oversight efforts.
The latest expenditure report ranked Nakuru County as having the highest number of bank accounts at 301, followed by Bungoma (300), Baringo (292), and Kiambu (292).
Machakos and Elgeyo Marakwet were also flagged, operating 221 and 155 accounts, respectively.
Public finance regulations stipulate that counties should only maintain revenue collection and imprest bank accounts outside CBK, but Nyakang’o’s findings indicate widespread non-compliance.
She vowed to present a full report to Parliament, shedding light on the issue and charting a path to tighter financial oversight.
“We need to determine where the rain started beating us,” she said.
