Controller of Budget Exposes Governor’s Shadow Financial Network in Kenya’s Impoverished County

The Controller of Budget (COB) report has unmasked Governor Abdi Guyo’s shadow financial empire in Isiolo, one of Kenya’s poorest counties, where residents struggle with basic necessities while public funds disappear into a labyrinth of unregulated bank accounts.

The February 2025 budget implementation review reveals how the Governor’s administration has systematically circumvented financial oversight mechanisms, operating what locals describe as a “financial cartel” that diverts resources from desperately needed development projects.

Guyo’s Secret Banking Network Evades National Oversight

At the center of Governor Guyo’s financial scheme is a network of commercial bank accounts operating in direct violation of national regulations.

The COB report explicitly states that “The County Government uses commercial bank accounts for operations contrary to Regulations 82(1)(b) of the PFM (County Governments) Regulations, 2015,” confirming whistleblower allegations that Guyo’s administration maintains as many as ten unauthorized accounts beyond Central Bank of Kenya oversight.

“This elaborate banking arrangement creates what amounts to a personal financial fiefdom for the Governor and his associates,” explained a former county finance official speaking on condition of anonymity. “These accounts effectively bypass the Integrated Financial Management Information System that would otherwise flag suspicious transactions, allowing funds to be moved without public scrutiny.”

Guyo Administration Starves Essential Services While Funds Vanish

Under Governor Guyo’s watch, money allocated for life-saving services in one of Kenya’s poorest regions has mysteriously disappeared or remained unspent while administrative costs continue unabated. The COB report reveals:

• The County Treasury, under Guyo’s direct supervision, failed to explain why certain departments’ expenditures exceeded their exchequer receipts—a glaring red flag for financial impropriety that the Governor has ignored.
• Only Ksh.1.00 million of Ksh.43.11 million allocated for Curative and Rehabilitative Health Services was spent (2% absorption rate) in a county where residents often die from treatable conditions due to inadequate healthcare facilities.
• While Isiolo’s women face some of the country’s highest rates of gender-based violence, Guyo’s administration spent exactly ZERO of the Ksh.1.53 million allocated to address this crisis.
• In a region plagued by unemployment, the Governor’s team absorbed 0% of the Ksh.6.50 million entrepreneurship training budget that could have provided economic opportunities for struggling youth.

“Governor Guyo presents himself as a champion of development, but the numbers tell a different story,” Ahmed Ibrahim, a community activist in Isiolo posted on the governor’s facebook page. “Our people are suffering while money meant for their welfare vanishes into these unregulated accounts.”

Essential Development Projects Neglected

The budget execution data exposes a pattern of neglect in key development areas:

• Rural Water Supply & Storage Services: 0% absorption of Ksh.117.44 million development allocation
• Housing Development: 0% absorption rate
• Irrigation Schemes: 0% absorption of Ksh.2.50 million allocation
• Agriculture Development: Multiple programs with 0% implementation despite allocations totaling millions

“The pattern of zero spending in critical development areas while administrative functions maintain typical expenditure levels suggests a deliberate strategy to redirect funds,” reads a post from a user commenting on the governor’s Facebook page.

Revenue Collection Failures Heighten Dependency

The county’s own-source revenue collection stood at a mere Ksh.119.60 million against an annual target of Ksh.371.21 million, representing only 32% of the yearly target.

This revenue shortfall increases dependency on national government transfers, which are channeled through the problematic commercial banking system.

Of particular concern is the Source Revenue Enhancement sub-program, which showed only 9% absorption (Ksh.0.30 million of Ksh.3.14 million allocated), indicating minimal investment in improving revenue collection systems.

Manual Payroll Systems Enable Potential Fraud

The COB report highlights that “Manual payroll is prone to abuse and may lead to the loss of public funds where proper controls are lacking.”

Personnel emoluments amounting to Ksh.25.74 million were processed through manual payroll, accounting for 2.3% of total payroll costs, creating a vulnerability that could be exploited for ghost workers or salary manipulation.

Uncleared Bills Accumulate as Development Stalls

Pending bills have accumulated to Ksh.873.58 million as of December 31, 2024, with the report noting “non-adherence to the payment plan for the pending bills by the County Treasury.”

This massive backlog coincides with shockingly low absorption rates in development expenditure across multiple sectors:

• Roads & Infrastructure: Only 19% of Ksh.292.64 million development allocation absorbed
• Land Survey and Planning: Just 11% of Ksh.48.00 million absorbed
• Energy Services: Only 9% of Ksh.305.94 million development funds utilized

Public Accountability Concerns

Ironically, the Civic Education & Public Participation program showed limited implementation with only 34% absorption rate, while customer service implementation was at 0%.

The report’s recommendation that “the County Government should ensure that bank accounts are opened and operated at the Central Bank of Kenya as the law requires” has been ignored.

The findings in this report paint a picture of a county government that has established financial mechanisms that allow for minimal oversight and maximum discretion in fund utilization.

These are precisely the conditions under which misappropriation thrives.

With the COB identifying these violations, attention now turns to enforcement actions.

The Ethics and Anti-Corruption Commission (EACC) should launch a comprehensive investigation into Isiolo County’s financial management practices.

Meanwhile, Isiolo residents continue to suffer from poor service delivery despite substantial budget allocations that show limited implementation on the ground.