Senate targets rogue Counties as report exposes 5,400 undeclared bank accounts and calls for tough penalties

The Senate has unveiled a sweeping plan to clamp down on financial malpractice in county governments, following revelations that thousands of irregular bank accounts are being secretly operated outside the law.

A report by the Devolution and Intergovernmental Relations Committee, chaired by Wajir Senator Mohamed Abass, has called for amendments to the Public Finance Management (National Government) Regulations, 2015, to impose clear penalties on counties and officers who fail to declare or close illegal accounts.

Controller of Budget Margaret Nyakang’o revealed that county governments are currently holding over 5,400 unauthorized commercial bank accounts, raising fears of possible loss of billions of shillings in public funds.

“This is aimed at strengthening oversight, enhancing transparency, and safeguarding public resources,” the committee’s report states.

The proposed changes seek to give the Controller of Budget, Auditor-General, and Central Bank of Kenya unrestricted, real-time access to all county-operated bank accounts to ensure transparency in fund management.

The Senate committee has also directed the Auditor-General to conduct a comprehensive audit of all commercial bank accounts held by counties within six months of the report’s adoption. Dormant accounts will be shut down, and funds transferred to the County Revenue Fund.

Senators launched the probe after successive Auditor-General reports revealed weak controls, poor disclosure practices, and gaps in financial oversight, making it difficult to track county expenditures.

Although the Public Finance Management Act, 2012, allows county treasuries to open accounts for operational purposes, the Senate found that many counties have exploited this provision to create undisclosed accounts, compromising transparency and accountability.

The committee further noted inconsistencies between national and county financial regulations, especially regarding donor-funded projects, which have created loopholes for misuse.

The Senate now wants the legal framework harmonized to tighten control over county finances and seal long-standing gaps that have allowed misuse of public resources to thrive.