Audit reveals public schools underfunded by Sh117 from July 2020 to June 2024 » Capital News

NAIROBI, Kenya, July 15 – Public schools in Kenya were underfunded by a staggering Sh117 billion in capitation funds over four financial years, with secondary schools bearing the brunt of the deficit, according to a Special Audit Report by the Office of the Auditor General.

The audit, sanctioned by the National Assembly Public Accounts Committee (PAC) chaired by Butere MP Tindi Mwale, covered the financial years 2020/2021 to 2023/2024.

It revealed that under-allocation of funds and systemic inefficiencies had severely undermined the government’s commitment to providing free basic education.

The report shows that secondary schools faced the largest shortfall, with a funding gap of Sh71 billion.

Junior Secondary Schools (JSS), established under the Competency-Based Curriculum (CBC), were underfunded by Sh31.9 billion, while primary schools experienced a deficit of Sh14 billion.

Special Needs Education (SNE) institutions also suffered, with secondary school SNE programs missing out on Sh67 million in capitation.

“Over the four years, comparison between the State Department’s budgetary requirements and actual disbursements confirmed consistent underfunding,” said Director of Audit Justus Okumu.

NEMIS inaccuracies

The audit examined how the State Department for Basic Education allocates and disburses capitation funds, comparing actual disbursements against approved budgets.

It found that while the department required Sh419.7 billion, only Sh334.1 billion was approved and released by the National Assembly—leaving a shortfall of Sh85.6 billion, or 20.4 per cent of the required amount.

A major concern raised was the reliance on National Education Management Information System (NEMIS) data, which the audit flagged for widespread inconsistencies.

The report found that several schools received capitation funds despite not existing or having ceased operations.

An audit of 83 sampled schools revealed that fourteen non-existent schools received a total of Sh16.6 billion, six schools that had closed down still received Sh889,348, and thirteen schools received Sh11 million, yet the names in NEMIS did not match their official registration.

The audit also revealed that NEMIS-reported enrollment figures often differed from physical registers, leading to misallocations.

As a result, 354 secondary schools, 99 JSS, and 270 primary schools were overfunded by Sh3.7 billion, while 334 secondary schools, 244 JSS, and 230 primary schools were underfunded by Sh2.14 billion.

The audit attributed these inaccuracies to poor controls in NEMIS, lack of audit trails, and unharmonized data across key agencies including TSC, KNEC, and KEPSEA.

“These discrepancies reflect weak data validation and oversight, which distorts resource allocation and opens room for fraud,” Okumu said.

Chronic delays

Beyond underfunding, the audit identified chronic delays in the disbursement of capitation funds.

In some instances, the State Department delayed submitting requisitions to the Treasury until after schools had reopened, resulting in disbursement delays of over two months.

“The main challenge facing public schools is underfunding. The ministry often scales down approved budgets, leading to shelved activities or pending bills,” Okumu told MPs.

The report also found violations of financial management regulations.

Three secondary schools were flagged for operating a single bank account—instead of separate accounts for tuition and operational expenses—through which they received Sh107.3 million in capitation.

The comingling of funds, the audit said, hindered transparency.

Additionally, some school administrators were found to have made irregular withdrawals or unauthorized fund transfers without proper documentation, contrary to Ministry of Education guidelines.

Textbook discrepancies

The audit uncovered significant discrepancies in textbook distribution including findings that 394 secondary schools, 94 JSS, and 182 primary schools received excess textbooks worth Sh90.8 million.

It also revealed 415 secondary schools, 194 JSS, and 245 primary schools received fewer books than required, with the shortfall valued at Sh295 million.

Another 118 secondary schools, 225 JSS, and 26 primary schools received books for subjects not offered in their curriculum.

Infrastructure funding

The audit further revealed prolonged delays—up to 734 days—in transferring funds from operational accounts to infrastructure accounts.

The delays derailed or stalled many school development projects.

“The current capitation model is not only inequitable but also unsustainable,” the report concluded.

PAC members expressed outrage at the audit findings.

Funyula MP Wilberforce Oundo claimed NEMIS was designed to marginalize students in certain regions.

“In many cases, the number of students in NEMIS is half of what’s on the ground. This historical injustice must be addressed.”

Oundo further demanded accountability for the ghost schools.

“We need to know who authorized the disbursement to non-existent schools. That officer must face action.”

Chepalungu MP Victor Koech accused senior Education Ministry officials of manipulating NEMIS for personal gain.

“It seems the ministry is focused on doing business, not delivering services. How do you fund unregistered schools unless there’s a deal involved?”

PAC Chair Tindi Mwale said the Ministry of Education would be summoned to explain the discrepancies.

“We will write to the ministry to respond to the findings in this special report. These reports take priority, and the accounting officer must be held to account.”