County governments opened 1,411 additional unauthorised commercial bank accounts in the year to June, pushing the total number of irregular accounts up 27.7 percent to 6,503 and undermining efforts to consolidate public funds and strengthen cash oversight.
New disclosures by the Controller of Budget (CoB) shows the number of commercial bank accounts operated by counties rose from 5,092 in June 2025, despite longstanding concerns over the proliferation of accounts outside the approved framework.
The expansion comes as the National Treasury moves counties towards a Treasury Single Account (TSA) system intended to bring public cash under tighter control and provide better visibility over government balances.
The existence of thousands of commercial bank accounts has for years complicated efforts to monitor county cash positions and repeatedly exposed weaknesses in financial controls within devolved units.
The CoB has, in previous reports, flagged the proliferation of commercial bank accounts as a major governance risk, warning that it creates opportunities for the misuse of public funds while weakening accountability.
The Public Finance Management (County Governments) Regulations require county government bank accounts to be maintained at the Central Bank of Kenya (CBK), while commercial accounts require prior written authorisation from the County Treasury.
The Central Bank of Kenya.
Photo credit: File
County treasuries must also submit copies of the authorisation letters to the CoB and Auditor-General, allowing oversight agencies to verify the purpose and legality of accounts operated outside the main government banking structure.
“As of June 30, 2026, County Governments operated 6,503 bank accounts with commercial banks, compared to 5,092 in FY 2024/25,” said CoB Margaret Nyakang’o in a report, adding that county treasuries had not submitted authorisation documents as required.
“The absence of submitted copies of authorisation letters to the Controller of Budget limits assurance over the legality, purpose and completeness of commercial bank accounts maintained by counties,” she said.
The report shows that West Pokot opened new commercial accounts at the fastest pace after adding 235, followed by Siaya, Nyeri, Migori and Kajiado which added 217, 208, 153 and 120 new accounts respectively.
Several counties also reported relatively large numbers of commercial accounts including Kitui with 328, Machakos with 307 and Bungoma with 294.
Under the PFM regulations, commercial accounts can be used for specified purposes where the necessary approvals are obtained, making documentation critical in determining whether individual accounts comply with the law.
The continued expansion comes at a time when counties are being brought into a cash-management framework designed to reduce fragmentation and improve visibility over public funds.
The National Treasury said in its 2026/27 Budget Statement that counties would progressively migrate to a TSA architecture after automation of their exchequer requisition processes.
Controller of Budget Dr Margaret Nyakang’o.
Photo credit: Wilfred Nyangaresi | Nation Media Group
The TSA is intended to consolidate government cash resources and improve the ability of Treasury officials to see inflows, outflows and available balances rather than having money scattered across numerous accounts.
Kenya’s county regulations already provide for a County TSA held at the CBK, with the devolved units expected to operate through sub-accounts rather than separate commercial banking arrangements.
The proliferation of commercial accounts has previously been linked by oversight agencies to weaknesses in county cash management, including difficulties in establishing how much money is available and where it is held.
This is as counties continue to report substantial pending bills, delayed payments and weak development-budget absorption.
The guiding regulations require sound cash-management systems aimed at avoiding idle balances and ensuring county funds are available for approved programmes and obligations.
Treasury began onboarding all 47 counties into the TSA framework in July 2026, with the reform expected to progressively replace fragmented banking arrangements with a more consolidated system.
