Counties’ use of commercial banks sparks concerns in budget oversight session

 

The Controller of Budget (COB), Dr Margaret Nyakang’o

The Controller of Budget (COB), Dr Margaret Nyakang’o, has raised concerns over county governments using commercial banks instead of the Central Bank of Kenya (CBK), a practice that goes against established regulations.

Speaking before the Constitution Implementation Oversight Committee (CIOC) on Tuesday, Dr Nyakang’o revealed that counties have been operating multiple accounts in commercial banks, despite regulations requiring them to consolidate funds at the CBK.

“Counties have accounts in different banks instead of consolidating their funds at the CBK. We have investigated this and have been sensitizing the public on the matter,” Dr Nyakang’o told the committee, chaired by Gathoni Wamuchomba.

The COB’s remarks come amid growing concerns about inefficiencies in county financial management, with the session also focusing on the handling of pending bills, wasteful spending, and corruption.

Dr Nyakang’o explained that, while her office monitors lawful pending bills, some officials prioritize certain payments to avoid tax voiding or due to corruption-related interventions.

“Funds are sometimes diverted once they reach county accounts,” she noted, adding that overestimated revenue projections further exacerbate the accumulation of pending bills.

Despite these challenges, Dr Nyakang’o pointed out that her office lacks enforcement powers to take action against financial mismanagement.

“The Act leaves us with no teeth to bite, but our reports are proper,” she said, calling for more public and media involvement to hold officials accountable.

Dr Nyakang’o also highlighted the financial constraints facing her office, which operates on an annual budget of Ksh 700 million, while the government pays an overdraft interest of Ksh 1 billion every month.

These budgetary limitations hinder the COB’s ability to effectively oversee public spending.

In response to inquiries about the management of funds related to the Housing Levy, Dr Nyakang’o clarified that her office does not oversee these funds, distancing itself from the levy’s administration.

The committee’s concerns reflect broader frustrations about the mismanagement of public resources, with calls for greater accountability and stricter compliance with regulations in county financial operations.

By Beth Nyaga -