VIDEO: How phantom students and educational institutions consumed Sh3.7 billion in funding

Sh16.6 million disbursed to 14 ghost schools, Auditor General reveals

 

Auditor General Nancy Gathungu has revealed that the government allocated billions of shillings for capitation to nonexistent students in fake schools over four financial years from 2020 to 2024.

A special report presented to the National Assembly Public Accounts Committee (PAC) yesterday illustrates how 723 ghost students accounted for Sh3.7 billion in capitation due to discrepancies in the actual number of students recorded in the National Education Management Information System (NEMIS).

Okumu informed lawmakers that a fact-finding investigation by the Auditor General’s office confirmed the absence of physical facilities at the claimed schools. He stated that the only proof of their existence was the bank accounts through which these institutions continued to benefit from capitation funds.

“We went on-site, including visits to urban areas, but they could not present the schools. However, we have the accounts, and they receive the capitation funds. On the ground, they are nonexistent. Yet, they were allocated money,” Okumu remarked.

The audit also revealed that six schools, which had already ceased operations, received a total of Sh889,348 during the reviewed years.

During his presentation, Okumu pointed out that the existing capitation model for public primary schools, junior secondary schools, and institutions serving students with special needs is inequitable. He brought attention to a significant funding disparity, estimating it at Sh117 billion. READ MORE

The special audit report indicated that secondary schools were the most impacted by the funding gap, missing out on Sh71 billion in capitation. Junior secondary institutions followed with a deficit of Sh31 billion, while primary schools faced an underfunding of Sh14 billion.

“The current school capitation model lacks equity,” Okumu cautioned MPs, indicating that the sector is facing severe financial limitations due to ongoing funding shortfalls.

The report also highlighted cases where schools had withdrawn cash or transferred funds from tuition accounts, breaching guidelines set by the State Department for Basic Education.

Simultaneously, the Auditor General raised concerns regarding the reliability of the National Education Management Information System (NEMIS), noting that inconsistencies in the system reflect weaknesses in data collection and validation processes.

According to the audit office, these flaws could result in misinformation, skewed resource allocation, difficulties in policy execution and oversight, as well as an increased potential for fraud.

“The shortcomings in NEMIS might leave the State Department vulnerable to risks such as unauthorized access to sensitive educational information, data breaches, information loss or alteration, and insufficient responses to security incidents,” Okumu cautioned.

Members of Parliament expressed worry that systemic failures within NEMIS have marginalized students nationwide. They urged for an immediate review of the digital system to rectify the weaknesses identified by the Auditor General.