NAIROBI – A government audit has uncovered massive financial losses in Kenya’s education sector, with over Sh3.7 billion disbursed to ghost students and non-existent schools between 2020 and 2024.
The revelations, presented to the National Assembly Public Accounts Committee, show that inflated enrollment data in the National Education Management Information System (NEMIS) led to widespread overpayments to secondary, junior secondary, and primary schools.
The special audit, authorized by the committee and covering a four-year period, found that 354 secondary schools received Sh3.59 billion more than they were entitled to, based on actual student numbers. An additional 99 junior secondary schools were overpaid by Sh30.8 million, and 270 primary schools received funds for students who did not exist.
Auditor Justus Okumu told lawmakers that data discrepancies stemmed from weak system controls and poor coordination among education agencies. “These weaknesses in NEMIS have enabled misreporting, distorted funding allocation, and exposed the education system to potential fraud,” Okumu said.
Among the most striking findings was the disbursement of Sh16.6 million to 14 schools that do not appear in county education records. “County directors of education were unaware of the existence of these schools,” Okumu confirmed.
In addition, six schools that had shut down still received capitation worth Sh889,348. Another 13 schools were paid Sh11 million despite using different names in the NEMIS database compared to official registration records.
The audit also uncovered that reported student numbers in NEMIS did not match physical school registers. This mismatch led to some schools receiving excess funds, while others were underfunded.
In total, the government overpaid Sh3.7 billion across 354 secondary, 99 junior secondary, and 270 primary schools. At the same time, 334 secondary schools, 244 junior secondary schools, and 230 primary schools were underfunded by Sh2.14 billion.
The Auditor General’s office attributed the errors to systemic failures, including a lack of audit trails and poor synchronization between NEMIS and agencies like the Teachers Service Commission (TSC), Kenya National Examinations Council (KNEC), and Kenya Primary School Education Assessment (KEPSEA).
Beyond misallocation, the report highlights broader funding shortfalls. Public schools were underfunded by Sh117 billion over four years. Secondary schools faced the deepest cuts, missing out on Sh71 billion. Junior secondary schools were shorted by Sh31.9 billion, and primary schools by Sh14 billion. Special Needs Education programs in secondary schools were underfunded by Sh67 million.
According to the audit, the Ministry of Education required Sh419.7 billion to fully fund public schools over the review period but received only Sh334.1 billion a shortfall of Sh85.6 billion.
Okumu noted that in some cases, budget requisitions were submitted to the Treasury after schools had reopened. The delays led to capitation funds arriving up to two months late, disrupting school operations.
The report also flagged waste and mismanagement in how schools handled funds. Three secondary schools received Sh107.3 million into single accounts instead of separating tuition and operations funds, as required by ministry policy.
Some schools also withdrew or transferred money without proper documentation. The audit found that 394 secondary schools, 94 junior secondary schools, and 182 primary schools received more textbooks than needed costing the government Sh90.8 million. On the other hand, 415 secondary schools, 194 junior secondary schools, and 245 primary schools did not get enough textbooks, amounting to a shortfall worth Sh295 million.
Additionally, 118 secondary schools, 225 junior secondary schools, and 26 primary schools were given textbooks for subjects not taught at those institutions.
The audit also noted long delays in transferring funds meant for infrastructure projects. In some cases, it took up to 734 days for money to move from operations to development accounts, causing some construction projects to stall.
“The current funding model is both inequitable and unsustainable,” the audit concluded. It called for an urgent overhaul of NEMIS and stricter verification systems to ensure accurate data and efficient use of taxpayer funds.
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