‘You can’t spend what you don’t have!’ Governors slam Controller of Budget over theft allegations

Council of Governors Chairperson Ahmed Abdullahi has slammed the Controller of Budget (CoB) Margaret Nyakang'o after her report detailing alleged corruption schemes in the counties.

The Wajir Governor termed the CoB’s report as “sensational and misleading” to the public after claims of Governors operating more than 300 bank accounts to cover up theft in the devolved units.

Governor Abdullahi also downplayed concerns by Nyakang’o of some counties not spending a penny on development, reiterating that the National Treasury had not disbursed funds on time for the Financial Year in question.

He condemned Nyakang'o for the report saying it was “unwarranted and unprofessional” for her to criticise the Governors while she knew the troubles bedevilling the counties.

 “You cannot spend that which you do not have. This has caused a misleading impression and unwarranted agitation among the members of the public and the media to the detriment of the County Governors and their governments,” he stated.

“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 unwarranted and unprofessional behaviour 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 its mandate.”

Abdullahi, in his defence of counties operating many accounts, said that multiple accounts especially in the health departments were operating within the law and were opened for purposes of revenue retention and expenditure since the counties have numerous health facilities.

“In accordance with Section 5(2) of the Facility Improvement Financing Act, 2023, all County Health facilities have been declared entities of County Governments and are required to open and operate bank accounts in commercial banks for purposes of revenue retention and expenditure. To date, County governments have 7,011 health facilities which are commensurate with the accounts in commercial banks,” he explained.

“Based on the above, we are of the position that it’s not practical for Counties to operate only one account without flouting existing laws given the numerous entities, revenue collection accounts and Special purpose accounts.”

He went on to underscore that some counties require additional accounts to fund projects funded by external organisations thus the need to have Special Purpose Accounts.

“County governments are implementing various projects funded from conditional grants by development partners. Some of the conditions include the requirement to open Special Purpose Accounts for these projects in a commercial bank for operational convenience and to ensure ring-fencing of these funds for specific projects,” he noted.

In regard to the zero-spending on development, Abdullahi highlighted the delay of funds by the National Treasury which had resulted in some counties considering short-term loans from commercial banks to pay salaries and sustain service delivery.

He said that the first disbursement for quarter one (1) was received during the last month of that quarter, adding that no county was able to access the money by the end of the quarter (September 30, 2024).

According to the Governor, the July allocation was released on September 24, 2024 (85 days delay), the August allocation was released on October 17 (78 days delay), the September allocation on November 14 (75 days delay) and the October allocation on November 18 (49 days delay).

Nyakang'o, in her report on Tuesday, flagged some Governors for running multiple bank accounts which she said are used to conceal irregular expenditures.

Baringo Governor Benjamin Cheboi was on the spot for operating 292 bank accounts, 256 accounts said to be for health facilities. The CoB said the accounts are flouting the PFM Act.

Governor Ken Lusaka was said to be running 300 bank accounts that the report said are suspicious since they are not under the Central Bank of Kenya.

Other counties operating unlawful accounts in multiple commercial banks included Bomet Governor Hillary Barchok (17 bank accounts), Elgeyo Marakwet County (155), Kajiado (50), Embu (46), Kakamega (44), while Kwale and Migori are operating 64 and 76 bank accounts respectively.

Ten counties in the report including Nairobi, Kajiado, Baringo, Lamu, Uasin Gishu and West Pokot counties were said to have spent zero shillings on development during the same period.