Looming war as Senators push for CBK, CoB to access counties’ ‘illegal’ accounts

A major conflict is brewing between senators and governors as lawmakers push for the Controller of Budget, the Auditor General and the Central Bank to be granted direct access to at least 5,400 unauthorised bank accounts operated by county governments.

The Senate has also directed the National Treasury to work with the Auditor General to audit all commercial bank accounts, close inactive ones and transfer balances to the County Revenue Fund.

Concerns have been growing over the ballooning number of unauthorised county accounts held in commercial banks.

The latest report by CoB Margaret Nyakang’o revealed counties are operating more than 5,400 such accounts, raising fears of illegal transactions putting billions of shillings in public funds at risk.

The Senate’s Devolution and International Relations Committee wants the oversight agencies to be given real-time access to the accounts. 

Committee chairman Mohamed Abass described the access proposal as a “game changer” that would improve and revolutionise financial oversight.

“The National Treasury must review the Public Finance Management (National Government) Regulations, 2015, to grant the CBK, Controller of Budget and Auditor-General system access to all county accounts, with clear sanctions for non-compliance,” Senator Abass said.

He said access would strengthen transparency and accountability in county spending.

The enquiry was triggered by repeated reports by the Auditor General reports citing discrepancies, non-disclosure and weak regulation of county commercial accounts — issues that have long cast doubt on the completeness and accuracy of their banking records.

Siaya Senator Oburu Odinga urged the Treasury to harmonise conflicting sections of the Public Finance Management (PFM) Regulations for the national and county governments.

“The inconsistencies in the PFM regulations disadvantage counties, particularly in managing donor funds and operational needs,” he said.

The Nyakang’o report on budget implementation for the year ending June 2025 showed counties continue to open accounts in commercial banks without approval of her office, in breach of the law.

She said county treasuries are required to seek authorisation and register all commercial bank accounts with her office — a requirement that many have ignored.

“As of June 30, county governments were running 5,476 accounts with commercial banks,” Nyakang’o reported.

“Most treasuries have failed to submit authorisation letters [for these accounts] as mandated by the PFM Act, exposing public funds to mismanagement and theft.”

The report highlighted stark disparities across counties. Kitui led with 350 unauthorised accounts, followed by Bungoma and Nakuru (more than 300 each), Baringo (280), Kwale (240), Machakos (231) and Embu (222).

 Others included Kericho (245), Kisumu (190), Nairobi (174), Uasin Gishu (160), Nyamira (157), Elgeyo Marakwet (160), Kirinyaga (140), Trans Nzoia (135), Marsabit (120) and Vihiga (121).

Kiambu operates 75 accounts, Meru 71, Isiolo 68, Busia 57, Kajiado 52, Makueni 45, Nyeri 32, Laikipia 32, Taita Taveta 37, Lamu 37, Mandera 30, Samburu 24, West Pokot 24, Garissa 26 and Turkana 26.

 Smaller figures were recorded in Tharaka Nithi and Tana River (16 each), Siaya (15), Murang’a (20), and Nandi (10). Data for Kilifi and Narok were not disclosed.

 Nyakang’o warned that the proliferation of unapproved accounts leaves devolved units’ funds “highly vulnerable” and undermines fiscal discipline.

 Regulation 82(1)(b) of the Public Finance Management (County Governments) Regulations, 2015, requires county accounts to be opened and maintained at the CBK, except for imprest, petty cash and revenue collection accounts. Regulation 82(4) demands written authorisation from the County Treasury before opening any commercial account, while Regulation 82(5) obliges the Treasury to forward copies of authorisation letters to the CoB.

 Instant analysis 

For years counties have been maintaining thousands of authorised bank accounts, never seeking authorisation from the Budget Controller, as required by law. Senators, which have county oversight, are fed up. They are demanding direct, real-time access to all accounts by CoB, Auditor General and Central Bank. Governors are likely to oppose what they could consider intrusion.