Fraud in education sector exposes failures in Nemis, digitization push

The failure of the National Education Management Information System (NEMIS) to curb fraud in government capitation to public schools raises more questions than answers. The system, introduced in July 2017, has gobbled billions in initial investment, upgrades and maintenance.

The Auditor General’s report to the National Assembly’s Public Accounts Committee, based on a sample of 1,039 schools, raises serious questions about the value taxpayers are getting from the NEMIS system.

If similar audits were extended to all public schools, estimated at 9,485 secondary and 23,831 primary schools as of 2023, how much more rot would be exposed?

While the Ministry of Education (MOE) disputes the report’s findings, a media house recently revealed ghost schools in Baringo County receiving full capitation and reportedly even staffed with teachers.

For context, public primary and secondary schools were not required to prepare annual financial reports for auditing by the Auditor General. As a result, public funds allocated to them were largely left to the discretion of individual school heads and school boards.

However, the Public Sector Accounting Standards Board (PSASB) has since published financial reporting templates for secondary schools, with those for primary schools expected soon, in line with the ongoing transition to an accrual-based accounting system.

The first sample audit of public secondary schools’ account was conducted for the 2020/21 fiscal year. Therefore, regardless of what MOE top officials may claim, there will soon be nowhere to hide as all public schools are integrated into the government financial reporting framework.

Historically, the Ministry has relied on its internal bureaucratic layers, from the national to the ward level, to supervise or oversight public resources sent to schools. The NEMIS system, was partly to enhance transparency and accountability on government investments into the education sector. However, this vast digital system appears unable to remedy systemic failures or curb potential greed within the ministry’s bureaucracy.

It is worth noting that the education sector currently receives the largest allocation from the national budget. Yet, many public schools remain in a dilapidated state, forcing learners to endure lasting setbacks, especially since lost learning opportunities cannot be reclaimed with age. It is disheartening to imagine that those entrusted with protecting the welfare and future of children could instead turn out to be the very saboteurs of the nation’s future human capital.

Reforms vs digitisation

As I noted in one of my earlier articles, in a parallel chapter of my professional life, I am a Business Process Re-engineering (BPR) champion. In the reform space, many institutions, both public and private, often confuse digitizing operations with actual reform or process re-engineering.  It is the same fallacy that we have witnessed in the e-citizen payment platform and the Social Health Authority (SHA) system that cost billions.

For avoidance of doubt, ICT systems do not constitute reform or re-engineering, they are merely enablers of processes that have already been reviewed and improved. Instead, most of what we often see in this country are tenderpreneurship ventures masquerading as digitization initiatives designed more to loot public funds than to improve service delivery. For instance, how would one explain the multi-billion shilling digital systems operating in silos across government agencies, yet they purport to serve the same groups of citizens?

Who would enroll ghost schools and students into the system? What is the purpose of the system if the AG findings are true? The bitter truth in the mind of a process re-engineer is that no digital system can stop willful collusion or perversion of the people who manage it. The other fact is, such ghost schools or learners enrolled into the system cannot happen without the knowledge of people sitting at corner offices within the Ministry’s bureaucracy.

The question is: What can be done to ensure value for money for taxpayers and possibly avoid such embarrassing fiasco in the future?

Political power

The fifth pillar of the Bottom-Up Economic Transformation Agenda is on digital superhighways and digitization of public services. While there is nothing wrong with the government promoting such bold ideas in the digital edge economic systems, emerging evidence and the obscene costs of ongoing government digitization programmes must force us to pose for a moment to reflect on what we truly need as a country.  

From existing literature, several factors contribute to the failure of public reform initiatives. In many instances, even well-intentioned reform programmes lose traction when political regimes change or transformative leaders exit the stage. This has been particularly true in Kenya, where the reform momentum of the Kibaki era stalled following the election of his successor. Below are some of the commonly cited reasons why public sector reforms fail.

A key requirement for public reforms to be effective and sustainable is securing the commitment of a credible sponsor at the highest levels of political leadership. When senior political actors view reforms as avenues for personal enrichment rather than public good, the reform agenda is doomed from the outset. Sadly, this is the tragic reality in our republic. Despite billions in taxpayer money being poured into digital systems, they often fail to address the underlying systemic failures they were meant to fix.

Inadequate resources are often cited as a challenge to reforms in many public sectors. However, this claim rings hollow in Kenya, where billions have already been sunk into existing systems. In reality, the agenda often appears to be something other than solving the actual public need. A third challenge lies in poor planning and communication. From what I’ve observed, successive governments have allocated budgets to procure ICT infrastructure without a proper diagnosis of the problems those systems are meant to address.

This is true for NEMIS, just as it is for the Integrated Financial Management Information System (IFMIS), which is meant to support financial management at both national and county levels. The motivation seems more driven by tenders than by service delivery. Once the tenderpreneurs walk away with their billions, the government is left saddled with underutilized systems, costly licenses and high maintenance fees.

Fourth, a key challenge in the Kenyan context is weak governance. Let’s not deceive ourselves, ICT systems cannot fix broken oversight institutions. At best, they create audit trails of malpractice. In essence, it’s garbage in, garbage out. Fifth, reforms that ignore deep-rooted issues like corruption, nepotism, patronage and capacity gaps are bound to fail, they’re simply cosmetic.

Sixth, a common pitfall in many developing countries is the adoption of reform models transplanted from developed economies without adapting them to local realities. Often, donors impose not just the system but also the supplier, typically a firm from the donor’s home country, as a condition for funding. The result? The recipient country ends up locked into costly licenses and maintenance contracts that benefit foreign suppliers more than the local economy.

The final point is about government bulldozing initiatives without proper citizen engagement or ownership from employees who are supposed to implement it. NEMIS is a classic example of this. It is no wonder that it has done little to protect the very public interest it was meant to safeguard.