- Treasury CS John Mbadi has approved a new system to stop governors from misusing county money.
- A Senate report showed that counties hold 1,854 unauthorised bank accounts.
- Mbadi plans to roll out a Treasury Single Account (TSA) to increase financial control.
- Senators demand county-level involvement in the reforms.
- Auditor General previously warned about account misuse in counties.
The Treasury Cabinet Secretary, John Mbadi, has endorsed a new financial system aimed at sealing the loopholes that governors use to steal public money. His assurance came as he appeared before the Senate and promised firm measures to improve how public funds are managed and tracked.
“The National Treasury is fully committed to ensuring transparency and accountability in the use of government resources,” a report from the Senate stated.
The move comes just after a worrying report from the Controller of Budget, which found that county governments are running 1,854 commercial bank accounts, directly breaking the rules of the Public Finance Management Regulations, 2015.
The report, handed over to the Senate, revealed that these numerous accounts make it nearly impossible to trace how counties are spending taxpayers’ money. This opens doors for misuse and fraud.
CS Mbadi explained to the Senate committee led by Mohamed Abbas that the Cabinet had already approved the rollout of the Treasury Single Account (TSA), a financial reform that will centralise all government revenue and income into one system at the Central Bank.
“This policy is key to financial discipline and better control of government funds,” Mbadi stated.
“The main aim is to bring transparency in how money is spent and managed,” he added.
With TSA in place, random and unregulated accounts will be eliminated, making it harder to hide or misuse funds.
While backing the reform, Senators insisted that the Treasury must involve both the Council of Governors and the Senate Finance Committee in the implementation of TSA. They emphasised that a joint policy would ensure fairness and success across all levels of government.
Senator Abbas also urged the Treasury to revise regulations guiding county bank accounts and introduce a system that allows monitoring without interfering with operations.
“Hon. Mbadi, your ministry should update the rules and push for full disclosure of all county bank accounts,” Senator Abbas said.
Months earlier, Auditor General Nancy Gathungu also flagged the same issue during a Senate session. She warned that counties were managing too many accounts, making it hard to monitor revenue and spending.
“We don’t need hundreds of bank accounts. Two, one for revenue and one for spending, are enough. Otherwise, we lose track of public money,” Gathungu warned during a hearing in September 2024.
The new reforms are seen as a major step towards stopping the misuse of devolved funds and building public trust in the financial systems of both national and county governments.
