Busia — Senators are pushing to curb the ballooning number of unauthorized bank accounts operated by county governments in commercial banks, warning that the loophole is exposing billions of shillings in public funds to potential misuse.

The Senate's Devolution and Intergovernmental Relations Committee is calling for a review of the Public Finance Management (National Government) Regulations, 2015 to grant the Central Bank of Kenya (CBK), the Controller of Budget (CoB), and the Auditor-General full access to all county-operated accounts held in commercial banks.

The lawmakers are also urging the immediate closure of all inactive accounts, with any remaining balances to be transferred to the County Revenue Fund (CRF).

The Auditor-General's Office has flagged serious discrepancies and lack of transparency in county financial records, attributing the problem to weak regulation of commercial bank accounts, which has led to incomplete and inaccurate reporting.

Controller of Budget Margaret Nyakang'o disclosed that counties are operating more than 5,400 commercial bank accounts, many of which have not been approved by her office.

She warned that this situation could facilitate illegal transactions and severely undermine fiscal discipline.

The report, tabled by Wajir Senator Sheikh Abbas, highlights inconsistencies in the Public Finance Management (PFM) Act, which it says have contributed to regulatory loopholes exploited by some counties.