Governors Under Fire for Operating Secret Bank Accounts, CoB Nyakang’o Reveals
A number of county governors have come under intense scrutiny for allegedly operating secret commercial bank accounts, a move that directly violates the Public Finance Management Act and devolution laws. Controller of Budget (CoB) Margaret Nyakang’o has raised the alarm, accusing county officials of stashing public funds in undisclosed accounts while essential services across counties suffer from financial neglect.
Image: Kakamega Governor Ferdinand Baraza addressing the media.
Speaking in Mombasa during a Senate Committee on Devolution meeting, Dr. Nyakang’o revealed that commercial bank accounts are being opened daily by county governments without authorization from the Central Bank of Kenya (CBK) or the Cabinet Secretary for the National Treasury.
“County governments’ bank accounts shall be opened at the Central Bank of Kenya except for imprest or petty cash,” she said, citing the Controller of Budget Act.
She further revealed that some of the illicit accounts even bore the names of politicians—an illegal practice that has seen massive amounts of public money diverted. “These accounts are stuffed with colossal sums of money at the expense of service delivery and the development of devolved units,” Nyakang’o lamented.
Nyakang’o accused county governments of failing to disclose critical information about their financial operations. “Information pertaining to the number of commercial accounts operated by different counties is not forthcoming. They conceal such crucial information unto themselves,” she said.
The Auditor General (AG) Nancy Gathungu echoed the concerns, noting that despite the ban on commercial bank accounts for county governments being in place for over a decade, the practice continues unabated.
“It’s sad to find out that some counties have even opted to transfer public money to these separate bank accounts without any clear reason, yet they know very well it’s against the law,” said Gathungu.
Investigations by both the CoB and AG’s offices have revealed discrepancies in the information provided by county officials. “The number of commercial bank accounts voluntarily given by the county officials to the office of CoB does not tally with that given to the Auditor General,” noted Gathungu, adding that some counties are yet to fully disclose their financial activities.
Ferdinand Baraza, Finance Chair of the Council of Governors (CoG), condemned the breaches and called for accountability. “Those found culpable must face the music. But I must also state here that the law permits the counties to run such commercial bank accounts because you cannot mix some of the monies,” Baraza said, adding that donor funds are often kept separate from CBK allocations, though he acknowledged the need for transparency.
Senator Karungo Wa Thang’wa called for stricter sanctions against errant governors, suggesting that such breaches be made grounds for impeachment. “Mr. Chairman, I think it is time that we make this matter impeachable to governors such that whoever contravenes it can be impeached right away,” he proposed.
Senators Peris Tobiko, Prof. Margaret Kamar, and committee chair Mohamed Abbas were also present during the devolution forum. The committee directed the Controller of Budget to issue a circular to all counties compelling them to disclose the number of commercial accounts they operate before a conclusive report is prepared with Treasury Cabinet Secretary John Mbadi.
The unfolding scandal has stirred fresh concerns about the accountability of devolved units and the misuse of public funds—threatening to erode the gains made in Kenya’s devolution journey.
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