The Controller of Budget (CoB) has flagged several county governments for operating county funds through commercial bank accounts, which contravenes regulations.
The use of such accounts is prohibited under Regulation 82(1)(b) of the Public Finance Management (PFM) (County Governments) Regulations, 2015.
According to the regulation, county bank accounts must be opened and maintained at the Central Bank of Kenya (CBK), with only revenue collection and petty cash accounts being exempted.
CoB Recommendations for Compliance
The CoB emphasized the importance of adhering to financial management laws to ensure accountability and transparency.
Key recommendations included:
- Timely Submission of Financial Statements: Counties must submit financial reports promptly to facilitate the preparation of budget implementation reports, as outlined in Section 166 of the PFM Act, 2012.
- Closure of Unlawful Accounts: Counties should ensure all bank accounts are maintained at the CBK, except for petty cash and revenue collection accounts.
Counties Operating the Most Commercial Bank Accounts
The report identified 10 counties with the highest number of commercial bank accounts, many of which were found to be operating illegally:
| County | Number of Bank Accounts |
|---|---|
| Nakuru | 301 |
| Bungoma | 300 |
| Baringo | 292 |
| Kiambu | 292 |
| Machakos | 221 |
| Elgeyo Marakwet | 155 |
| Migori | 76 |
| Kwale | 64 |
| Kajiado | 50 |
| Embu | 46 |
Other Findings
In Nairobi County, the county assembly was reported to operate five accounts with commercial banks. However, the county executive failed to disclose its accounts.
Nyandarua and Narok County Treasuries also did not reveal the number of commercial bank accounts they operate, raising concerns about transparency.
Counties’ Spending on MCAs’ Sitting Allowances
The CoB report further noted excessive spending on sitting allowances for Members of County Assemblies (MCAs) in some counties.
This has been a recurring issue, with the CoB highlighting it as a misuse of public funds that needs immediate addressing.
The findings underscore the need for stricter enforcement of financial regulations and greater accountability in county operations.
By adhering to legal frameworks, counties can foster transparency and ensure public funds are managed effectively.
