County governments opened 199 further unauthorised industrial financial institution accounts within the three months to March, pushing the whole variety of irregular accounts to six,585 in a improvement that raises contemporary issues over transparency within the administration of devolved funds.
A brand new report by the Controller of Finances (CoB) exhibits the variety of industrial financial institution accounts operated by counties rose from 6,386 in December final yr, regardless of longstanding issues over the proliferation of accounts exterior the authorized framework.
Below the Public Finance Administration Act, counties are anticipated to carry their accounts on the Central Financial institution of Kenya (CBK), with solely a restricted variety of special-purpose accounts permitted in industrial banks after acquiring approval.
In her newest report, CoB Margaret Nyakang’o mentioned county treasuries had not submitted authorisation paperwork for the 6,585 accounts as required, making it troublesome to ascertain their legality and objective.
“County treasuries had not submitted copies of authorisation letters for these accounts to the COB, as required, thereby limiting transparency and assurance relating to the quantity and objective of economic financial institution accounts maintained by counties,” wrote Ms Nyakang’o.
Account surge
The Treasury argues that fragmented accounts permit massive sums of public cash to stay idle in industrial banks whilst county governments wrestle to pay suppliers, staff and different obligations.
The existence of 1000’s of economic financial institution accounts has for years difficult efforts to observe county money positions and repeatedly uncovered weaknesses in monetary controls inside devolved items.
The CoB has, in earlier stories, flagged the proliferation of economic financial institution accounts as a serious governance danger, warning that it creates alternatives for the misuse of public funds whereas weakening accountability.
Through the quarter below overview, Makueni opened the very best variety of further accounts, at 230, adopted by Siaya (191), West Pokot (79), Taita Taveta (65), Laikipia (38), Embu (20), Nyamira (15), Uasin Gishu (5) and Isiolo (4).
On the identical time, Meru closed the very best variety of accounts in the course of the interval, at 462, adopted by Machakos (62), Mombasa (16) and Kericho (three).
Kitui continues to have the very best variety of unauthorised industrial financial institution accounts, at 493, whereas Nandi operates the fewest, with 10.
The proliferation of county financial institution accounts has remained probably the most persistent governance issues in Kenya’s devolved system for the reason that institution of county governments in 2013.
The deliberate rollout of the TSA framework is meant to handle the issue by consolidating visibility over public money balances and lowering the usage of quite a few standalone accounts.
Below the brand new association, counties will progressively migrate to a extra centralised money administration system much like the one already in use by the nationwide authorities.
