Puzzle of 3,400 county Bank accounts raises accountability fears

A fresh audit by the Controller of Budget has revealed that counties have been operating thousands of illegal bank accounts, sparking serious concerns over accountability and potential misuse of public funds.

According to the report by Controller of Budget Margaret Nyakang’o, county governments had opened 3,431 commercial bank accounts by the end of March 2025—more than double the 1,668 accounts reported a year earlier.

The move blatantly violates the Public Finance Management (County Governments) Regulations, which restrict counties to operating their accounts at the Central Bank of Kenya (CBK), with limited exceptions for petty cash (imprest) and revenue collection.

“The only exemption is for imprest bank accounts for petty cash and revenue collection bank accounts,” the report states.

Nakuru County led the list with 292 illegal accounts, followed by Baringo (282), Machakos (230), and Embu (222). Shockingly, only Narok and Vihiga counties were found to be compliant with the financial management laws.

Baringo’s 282 accounts are spread across various functions, including 231 for health facilities, 23 for vocational training centres, and others for revenue, special purpose funds, and operations.

However, the Controller of Budget pointed out that the Baringo County Treasury failed to submit copies of authorisation letters for opening these accounts, as required by law.

“County governments are not complying with Regulation 82, as not all accounts are maintained at the Central Bank, and authorisation letters are not being shared with the Controller of Budget,” the report noted.

Other counties with high numbers of accounts include Nairobi (174), Bomet (148), Elgeyo Marakwet (127), Marsabit (120), Nyamira (157), and Trans Nzoia (135). Most of the accounts are tied to health services, bursary funds, vocational training, car loans, and hospital operations.

The law mandates accounting officers to get written authorisation from their county treasury offices before opening any commercial bank account. A copy of the approval is supposed to be submitted to both the Controller of Budget and the Auditor-General.

However, the report shows a consistent trend of non-compliance. The data also raises questions about the actual number of accounts, as Kakamega and Kilifi counties did not disclose their figures during the reporting period.

In May last year, the Controller of Budget lost a bid to gain real-time access to county accounts at the CBK—a move that would have increased transparency.

“County governments are not complying with Regulation 82,” the report insists, underlining how the increasing number of accounts is making it harder to track public spending and exposing taxpayers to potential losses.