The Nairobi City County Government is facing serious allegations of financial impropriety, following reports of operating numerous unauthorized commercial bank accounts, a contravention of the Public Finance Management (County Governments) Regulations, 2015.
- •This revelation highlights significant concerns regarding the county’s adherence to financial governance and transparency.
- •According to findings by Controller of Budget’s Office, Nairobi County has failed to submit copies of authorization letters for the opening of these commercial bank accounts.
- •The County Government is reportedly utilizing these commercial accounts for operational purposes, contrary to regulations which requires County Government bank accounts to be opened and maintained at the Central Bank of Kenya (CBK).
- •The County Government operated 174 accounts with commercial banks (County Assembly -8 and County Executive- 166), including 123 accounts for Health Facilities, 11 accounts for Vocational Training Centres, 5 accounts for Established Funds, 5 revenue accounts, 16 special purpose accounts (additional allocations), 2 Early Childhood Development Accounts (ECDs), 2 imprest accounts, 1 recurrent operational account and 1 development operational accounts.
“The continuous operation of unauthorized commercial bank accounts by Nairobi County is a grave concern that undermines the principles of sound public financial management,” stated the nine-month report of the Financial Year 2024/25. “These regulations are in place to ensure accountability, transparency, and the efficient use of public funds. The failure to comply raises serious questions about the county’s financial oversight mechanisms.”
The commercial bank accounts in question are reportedly being used for a wide range of critical county services and entities, including Health Facilities, Vocational Training Centres, Established Funds, Special Purpose Accounts (additional allocations), Early Childhood Development Accounts (ECDs).
Regulation 82(1)(b) of the PFM (County Governments) Regulations, 2015, requires that County Government bank accounts be opened and maintained at the Central Bank of Kenya.
The only exemption is for imprest bank accounts for petty cash and revenue collection bank accounts. Regulation 82(4) of the Public Finance Management (PFM) Act requires accounting officers to get written authorisation from the County Treasury before opening a commercial bank account. A separate policy mandates the County Treasury to submit a copy of the letter authorising an accounting officer to open a commercial bank account to the Controller of Budget.
Nairobi’s Pending Bills
The Controller of Budget is also linking the county’s high pending bills accumulation to unrealistic own source revenue target which it says also undermines credibility of the budget.
On July 3, this year, Nairobi City County said it recorded its highest revenue collection since the onset of devolution, hitting KSh 13.8B billion for the 2024/2025 financial year.
“The performance against an annual target of KSh 20.41 billion, undermines the credibility of the budget and is one of the main reasons behind the cumulative pending bills,” notes the controller of budget.
According to a statement from the county, the Housing department recorded a significant increase in revenue from house rent collections, reaching KSh 800 million in the 2024/2025 financial year the highest in over a decade.
“The spike is attributed to enhanced enforcement, digital rent tracking, and recovery campaigns that peaked in May 2025, when the county collected a record KSh 200 million in a single month.”
According to the county governments budget implementation review report the first nine months of 2024/25, Nairobi reported reported pending bills totalling Ksh 121.78 billion as of 30 June 2024. This amount included KSh 121.26 billion from the County Executive and KSh 513.92 million from the County Assembly. The pending bills from the County Executive consist of KSh 115.95 billion for recurrent expenditures and KSh 5.31 billion for development expenditures.
During the period under review, the County Executive settled pending bills amounting to KSh 5.94 billion, comprising KSh 5.05 billion for recurrent programmes and Ksh 893.92 million for development programmes.
On the other hand, the County Assembly settled pending bills worth KSh 140.73 million, which included KSh 138.77 million for recurrent activities and Kshs.1.96 million for development activities.
The County Executive submitted a summarised pending bills payment plan, while the Assembly submitted a detailed payment plan at the commencement of FY 2024/25, committing to pay Kshs.800 million and Kshs.513.92 million, respectively, in the first nine months of FY 2024/25.
However, the County did not adhere to this payment plan, as it cleared KSh 5.94 billion for the Executive and KSh 140.73 million for the Assembly.
As of 31 March 2025, the outstanding pending bills amounted to KSh 115.69 billion, comprising KSh 115.32 billion for the County Executive and KSh 373.19 million for the County Assembly.
