The Council of Governors (CoG) has accused Controller of Budget Margaret Nyakang’o of unprofessional conduct and unfairly scandalizing counties through her report covering the financial year’s first quarter, from July to October 2024.
CoG Chair Ahmed Abdullahi on Thursday defended the counties, particularly regarding the report’s claims about development spending and the management of numerous bank accounts.
Abdullahi clarified that the existence of 7,011 health facility bank accounts is legally justified under the Facility Improvement Financing Act, 2023.
The Act requires all county health facilities to open and operate accounts in commercial banks for revenue retention and expenditure.
He also cited Regulation 82(1)(b) of the Public Finance Management (County Governments) Regulations, 2015, which allows counties to open accounts in commercial banks for revenue collection.
He explained that conditional grants from development partners often require special-purpose accounts to ensure transparency and proper fund allocation for specific projects.
“County governments are implementing various projects from conditional grants by development partners. Some of the conditions include the requirement to open Special Purpose Account for these projects in a commercial bank for operational convenience and to ensure ring-fencing of these funds for specific projects,” Abdullahi said.
The Controller of Budget’s report spotlighted Bungoma Governor Kenneth Lusaka for operating over 300 bank accounts.
It also revealed that Nairobi, Kajiado, Baringo, Lamu, Uasin Gishu, and West Pokot counties spent no funds on development during the period. Conversely, Narok Governor Patrick Ole Ntutu led development spending with Ksh.477 million, followed by Kirinyaga Governor Anne Waiguru (Ksh.378 million) and Busia Governor Paul Otuoma (Ksh.328 million).
The report further highlighted mounting pending bills, with Nairobi County owing Ksh.121 billion, Garissa Ksh.6 billion, Kiambu Ksh.5.9 billion, and Turkana Ksh.4.8 billion. Nyakang’o urged counties to prioritize settling these debts as recommended by the Senate.
Abdullahi defended the counties, stating that delayed exchequer releases from the National Treasury forced many to rely on short-term loans to sustain operations, including paying salaries.
“Any development done during that quarter was funded from last FY’s arreas while most counties were forced to go for short-funded loans from commercial banks to pay salaries and sustain delivery.”
He criticized Nyakang’o’s report for creating a “misleading impression” and sparking unnecessary public outrage.
“The controller of budget has continued to scandalize counties while she is aware of the challenges with delayed release of funds, most of which are orchestrated by her office. We condemn the unwarented and unprofessional behavior on the part of the controller of budget in the strongest terms possible. This is a facilitative office that must live up to, and respect their mandate.” Abdullahi said.
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