A new report has revealed that county governments are managing numerous bank accounts, which oversight agencies warn could be used to divert taxpayers’ money. The expenditure report by Controller of Budget Margaret Nyakango for the last financial year indicates that 43 counties operate a total of 2,027 bank accounts across various commercial banks.
Four counties—Kirinyaga, Mombasa, Siaya, and Tharaka Nithi—did not provide records on their bank accounts with commercial banks.
The disclosure follows a recent warning by Auditor General Nancy Gathungu, who raised concerns that these multiple accounts might be a conduit for corruption. Gathungu has stated that counties should not have more than 10 bank accounts.
The report highlights that Bungoma County, led by Governor Kenneth Lusaka, operates 358 bank accounts. Kiambu, under Governor Kimani Wamatangi, has 306 accounts; Baringo, led by Governor Benjamin Cheboi, has 283 accounts; and Migori, with Governor Ochillo Ayacko, has 208 accounts.
Nyakango stated in the report, “The Office of the Controller of Budget noted that county governments are using commercial bank accounts to manage public funds and other operational accounts.”
This practice contradicts Regulations 82(1)(b) of the PFM (County Governments) Regulations, 2015, which mandates that county government bank accounts should be opened and maintained at the Central Bank of Kenya (CBK), with exceptions only for imprest bank accounts for petty cash and revenue collection.
Other counties with a large number of bank accounts include Nyandarua (88), Kakamega (64), Busia (62), Taita Taveta (37), Kwale (35), Tana River (34), Machakos (33), and Embu (31). Meru has 29, Kajiado 27, Narok 27, Lamu 24, Nairobi 23, Murang’a 23, Kericho 22, Mandera 22, and Uasin Gishu 20.
Nyakango advised, “The Controller of Budget urges county executive committee members responsible for finance to ensure compliance with the law by maintaining bank accounts at the CBK for accountable spending.”
During a Senate oversight committee session last week, Auditor General Nancy Gathungu emphasized that counties should operate no more than 10 bank accounts, expressing concerns that excessive accounts could facilitate theft of public funds. She explained, “Sometimes you find a dormant account for three years and suddenly there is money channeled inside, then all of a sudden it disappears. When you follow up, you find it’s a vehicle to transfer money.”
Migori Senator Eddy Oketch noted the disparity in account management, saying, “You find county X is using the same services with 10 accounts, but county Y is doing the same with 200 accounts.”
In response, Gathungu stated, “More than 10 bank accounts, to me, is a no. So, operating 300 bank accounts does not make sense to me.” She suggested, “I think we should minimize bank accounts; we should have one or two expenditure accounts. We don’t need 300.”
Nyakango’s report reveals that counties with the fewest bank accounts include West Pokot (four), Vihiga (five), Kitui (five), Nandi (seven), Kisumu (eight), and Kilifi (10). Trans Nzoia, Marsabit, Isiolo, Homa Bay, and Garissa each have 11 accounts, while Nakuru and Laikipia have 12 each. Wajir, Nyamira, Kisii, Turkana, and Elgeyo Marakwet each have 15 to 17 accounts.
The Senate Devolution and Intergovernmental Relations Committee, chaired by Wajir Senator Mohamed Abbas, is currently investigating the counties with numerous bank accounts. Last month, the committee questioned Governor Kenneth Lusaka about the rationale behind operating so many accounts.
Marsabit Senator Mohamed Chute asked Lusaka, “Did you follow the law in opening the accounts?”
Lusaka defended the accounts, explaining that his administration manages 10 public funds accounts, nine special purpose accounts, and a project management account, along with nine sub-county imprest accounts, two Mabanga operation accounts, and 19 accounts for Level 4 and 5 hospitals. He clarified, “Most of the accounts belong to vocational training centres and health facilities and dispensaries in the county.”
Lusaka said the county health facilities receive funds directly from donors which requires them to maintain individual separate accounts.
He added that the accounts are fully audited and included quarterly financial statements.
“We have made progress and we are committed to ensure regulation 82 (1) (b) of the Public Finance Management (County Government) Regulations 2015 is compiled with and shall continuously appraise the office of the Controller of Budget,” Lusaka said.
