Controller of Budget Margaret Nyakang’o at Parliament Buildings on September 17, 2024 /FILE
The Controller of Budget has opened investigations into the high number of illegal bank accounts operated by county governments.
Margaret Nyakang’o revealed that her office seeks to establish how and why counties opened several bank accounts at commercial banks contrary to the law.
“We are reviewing those bank accounts to establish when they were established, who operates them, and what is the purpose. And we will bring you a report,” Nyakang’o told the Senate.
The country’s budget boss spoke during a meeting with senators in Naivasha, where the lawmakers raised concerns about the high number of bank accounts operated by the counties.
There have been suspicions that the multiple and irregular bank accounts could be conduits for siphoning taxpayers’ money from the devolved units.
The Ethics and Anti-Corruption Commission revealed in its latest report that at least 26 counties are under graft investigations.
In Naivasha, Nyakang’o fingered the devolved units for denying her access rights to their bank statements. According to Nyakang’o, she is unable to track or verify whether counties utilise requisitioned funds for the intended purposes.
“I sought to have viewing rights to the bank statements of the counties, which was denied. I have had to ask counties. I have had to bend my knees and beg for bank statements, but they still won’t give me their bank statements,” she stated.
She did not specify the counties hindering her work. The latest report by Nyakang’o revealed the devolved units operated some 2,421 accounts as of September 30, 2024.
This was a jump of more than 400 accounts from the 2,000 commercial bank accounts that were reported in the first nine months of the previous fiscal year 2023-24.
In her submission, Nyakang’o revealed that she flagged the issue of illegal accounts after realising that several accounts opened by the previous regimes were still receiving funds without the knowledge of the officers in the new administrations.
“We were concerned that new bank accounts were being opened all the time and the signatories were not controlled,” she stated.
“Indeed, when we checked some of the accounts we found that they had been opened way back in 2013 during the previous administrations and that people in office were not aware that those banks existed. These were banks that were receiving revenue.”
The CoB disclosed that she is investigating 15 counties in the current financial year due to budgetary constraints. The remaining counties, she said, will be reviewed in the subsequent years, depending on the availability of funds.
She disclosed that her office faces financial challenges after its budget was slashed from Sh1.6 billion to Sh702 million.
“I will be bringing to you an up-to-date report on these accounts and then we can look at them and see where the rain started beating us,” she stated.
In the county expenditure report for the period ended September 30, 2024, Nyakang’o revealed that Nakuru had the highest number of bank accounts at 301.
Bungoma was second with 300, while both Baringo and Kiambu had 292 commercial bank accounts. Nyakang’o says her review established that Machakos was operating 221 commercial bank accounts at the time of the review, followed closely by Elgeyo Marakwet with 155.
Public finance laws and attendant regulations require that county government bank accounts must be opened and maintained at the Central Bank of Kenya. Counties, however, were found to be operating the accounts in breach of regulations 82( 1 )(b) of the PFM (County Governments) Regulations, 2015.
"The only exemption is for imprest bank accounts for petty cash and revenue collection bank accounts,” Nyakang’o said in the report covering spending from June to September last year.
