National Treasury vows to curb misuse of county funds with single account system
The Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi, has vowed to enforce the implementation of the Treasury Single Account (TSA) policy to improve financial accountability in county governments.
Speaking before the Senate Standing Committee on Devolution and Intergovernmental Relations on Thursday, July 17, 2025, CS Mbadi said the government is taking steps to enhance transparency and control in the use of public resources.
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This comes after a report by the Controller of Budget revealed that counties are operating 1,854 commercial bank accounts against the Public Finance Management Regulations of 2015, raising serious concerns over possible misuse of funds.
The Controller of Budget submitted the County Budget Implementation Review Report to the Senate in line with constitutional requirements. The report noted that the high number of bank accounts makes it difficult to track how counties are spending money, creating room for fraud and mismanagement.
CS Mbadi told the Mohamed Abbas-led committee that the Cabinet has already approved the rollout of the Treasury Single Account, which he described as a major reform in public finance management.
“The implementation of this policy is part of the broader Treasury Single Account action planOF that is expected to improve financial governance and control over/share of public funds. The primary goal of the policy is to ensure accountability and transparency in the use of public resources,” Mbadi said.
The TSA is a financial system that consolidates all government revenues, receipts, and income into a single account, usually maintained at the Central Bank of Kenya. This setup is designed to improve oversight and reduce misuse of funds by eliminating scattered and unmonitored accounts.
The former Suba South MP expressed confidence that the move would strengthen Kenya’s fight against financial mismanagement in both national and county governments.
Members of the Senate Committee called on Mbadi to engage the Council of Governors (CoG) and the Senate Standing Committee on Finance and Budget to craft a joint TSA policy that meets the needs of both levels of government. Senators also asked the Treasury to create a hybrid system that allows visibility into county accounts without directly accessing the money.
“Hon. Mbadi, your ministry needs to review the existing regulations to provide clarity on the requirements for county governments to open commercial bank accounts and explore options to compel full disclosure of all accounts,” Senator Mohamed Abbas, the committee chairperson, said.
Bungoma county
This comes months after Auditor General Nancy Gathungu also raised alarm over the large number of accounts managed by counties, which she says complicates oversight and tracking of public funds.
Speaking before the Senate Committee on County Public Investment and Special Funds on September 4, 2024, Gathungu said counties should reduce the number of accounts they manage.
“We should minimise bank accounts. We need one or two revenue or expenditure accounts. We don’t need 300. First of all, you lose track of funds,” she warned.
She also criticised the duplication of funds and roles between national and county governments, especially in sectors like agriculture and education. She pointed out cases where counties issue bursaries, a task also handled by national government funds.
“I can’t say one or two bank accounts are enough, but having 200 to 300 accounts does not make sense,” Gathungu emphasised.
One of the counties under scrutiny is Bungoma, which Governor Kenneth Lusaka confirmed is operating 352 bank accounts.
“Indeed, I reconfirm that we have 352 bank accounts being managed by my administration,” Lusaka told the committee.
He explained that 152 of those accounts belong to vocational training centres, 146 are for health facilities and dispensaries, while others are used for county funds and special projects. Lusaka said all the accounts were opened legally and transparently.
“Most of these accounts belong to vocational training centres, health facilities and dispensaries in the county,” he said.
Adding;
“Health facilities maintain separate accounts due to direct donor funding, and all accounts are audited and included in quarterly financial statements.”
However, Bungoma Senator Wafula Wakoli accused the county of opening the accounts fraudulently to steal public funds. In response, Lusaka defended his administration and said they were cooperating with ongoing investigations.
“We are in the process of complying with that request. Relevant investigative state agencies are carrying out their independent probes,” Lusaka said.
Adding;
“I’m certain I shall be vindicated when the detectives accomplish their work.”
