Fresh audit findings have placed Sh92.8 billion in school capitation spending under scrutiny after the Auditor General questioned the data used to distribute the funds to learning institutions.
The report indicates that the State Department for Basic Education relied on student enrolment figures that were not confirmed before the money was released, raising doubts about the accuracy of the allocations.
Auditor General Nancy Gathungu issued a qualified opinion on the department’s financial statements for the year ending June 30, 2025, pointing to several concerns including weak financial oversight, irregular shifting of funds, breaches in procurement procedures and shortages in staffing.
At the centre of the concerns is the Sh92.8 billion sent to schools through the Free Primary Education (FPE), Junior Secondary Education (JSE) and Free Day Secondary Education (FDSE) programmes.
These programmes depend on enrolment records captured in the National Education Management Information System (Nemis), which the government uses to calculate how much capitation each school should receive.
But the audit report states that officials did not submit proof showing that the enrolment figures in Nemis were checked by subcounty directors of education before the funds were transferred to individual schools.
“Management did not provide for audit review evidence of the students’ enrolment data in Nemis having been verified by the respective subcounty directors of education before the funds are transferred to the individual schools,” the report states.
Because the verification process was not demonstrated, the auditor said it was not possible to determine whether the transfers were accurate or complete.
“In the circumstances, the accuracy, completeness and regularity of transfers of Free Primary Education (FPE), Junior Secondary Education (JSE) and Free Day Secondary Education (FDSE) totalling Sh92,806,469,242 could not be confirmed,” Gathungu said.
According to the report, the questioned funds include Sh7.6 billion allocated for Free Primary Education, Sh30.4 billion for Junior Secondary Education and Sh54.7 billion for Free Day Secondary Education.
The findings add to growing concerns about the reliability of the enrolment data used in distributing education funds to schools across the country.
The audit comes shortly after a review by the Ministry of Education exposed more than 900,000 ghost learners in the system. The exercise found that over 885,000 pupils could not be accounted for in primary schools while about 87,000 students were missing in secondary schools, revealing serious inconsistencies in the Nemis database.
Investigators also found that 33 institutions listed in the system had received capitation funding despite not existing. Authorities estimate that nearly Sh4 billion could have been lost through funds allocated to these non-existent schools.
Following the discovery, disciplinary proceedings have been initiated against 20 head teachers linked to the enrolment discrepancies.
The matter has already drawn the attention of senior government officials. Felix Koskei, the Head of Public Service, chaired a meeting on Friday to address the issue, where it was agreed that school heads will appear before committees of the National Assembly to answer questions arising from the audit findings.
