CoB has revealed that county governments are operating thousands of bank accounts in commercial banks without submitting the required authorisation documents to the Controller of Budget.

According to a new report by the Controller of Budget, as of June 30, 2025, counties had opened and maintained 5,476 commercial bank accounts.

This is despite clear rules under the Public Finance Management Act and its regulations that require such accounts to be authorised in writing by the County Treasury.

“County Treasuries were yet to submit copies of the authorisation letters for opening the commercial bank accounts to the Controller of Budget, as mandated by Regulation 82(5) of the Public Finance Management (County Governments) Regulations, 2015,” the report read in part.

The law further directs that once an authorisation letter is issued to an accounting officer, a copy of the same must be sent to the Controller of Budget. The report showed that this has not been done, leaving the regulator in the dark on whether the accounts were legally opened.

CoB reported that the number of accounts varies widely across counties. Homa Bay had the highest with 558, followed by Bungoma with 301 and Nakuru with 311. Baringo had 280, while Kitui operated 350.

Some counties like Nandi and Kisii recorded very few, with 10 and 14, respectively. In some cases, like Kilifi and Narok, the numbers were not disclosed.

“Without submission of the authorisation letters, the Controller of Budget cannot ascertain the legitimacy of these commercial bank accounts,” CoB declared.

The report signalled a serious compliance gap in county financial management and highlights the risks that come with operating thousands of accounts outside the oversight of the Controller of Budget.

Auditor General

This comes months after Auditor General Nancy Gathungu also raised alarm over the large number of accounts managed by counties, which she says complicates oversight and tracking of public funds.

Speaking before the Senate Committee on County Public Investment and Special Funds on September 4, 2024, Gathungu said counties should reduce the number of accounts they manage.

“We should minimise bank accounts. We need one or two revenue or expenditure accounts. We don’t need 300. First of all, you lose track of funds,” she warned.

She also criticised the duplication of funds and roles between national and county governments, especially in sectors like agriculture and education. She pointed out cases where counties issue bursaries, a task also handled by national government funds.

“I can’t say one or two bank accounts are enough, but having 200 to 300 accounts does not make sense,” Gathungu emphasised.

One of the counties under scrutiny is Bungoma, which Governor Kenneth Lusaka confirmed is operating 352 bank accounts.

“Indeed, I reconfirm that we have 352 bank accounts being managed by my administration,” Lusaka told the committee.

He explained that 152 of those accounts belong to vocational training centres, 146 are for health facilities and dispensaries, while others are used for county funds and special projects. Lusaka said all the accounts were opened legally and transparently.

“Most of these accounts belong to vocational training centres, health facilities and dispensaries in the county,” he said.

Adding;

“Health facilities maintain separate accounts due to direct donor funding, and all accounts are audited and included in quarterly financial statements.”

However, Bungoma Senator Wafula Wakoli accused the county of opening the accounts fraudulently to steal public funds. In response, Lusaka defended his administration and said they were cooperating with ongoing investigations.

“We are in the process of complying with that request. Relevant investigative state agencies are carrying out their independent probes,” Lusaka said.

Adding;

“I’m certain I shall be vindicated when the detectives accomplish their work.”