Auditor flags schools' capitation transfers

The Auditor General has raised concerns over unverified school capitation for the financial year ending June 30, 2023.

According to the audit report, the statement of receipts and payments reflects subsidies and transfers to other government units totalling Sh63.2 billion and Sh52.4 billion, respectively.

This includes Sh63.1 billion for subsidies and transfers and Sh11.38 billion for Free Day Secondary Education (FDSE) and Free Primary Education (FPE) capitation, against approved budgets of Sh63.1 billion and Sh11.7 billion.

This resulted in undisbursed funds of Sh55,946 for secondary education and Sh408.4 million for primary education, totalling Sh408.46 million.

The report notes that FPE disbursements were processed manually, not through the National Education Management Information System (NEMIS).

Consequently, pupil enrollment per school could not be verified. A field verification of 312 sampled junior schools across 27 counties revealed discrepancies between actual student populations and NEMIS data used for capitation.

While 125 schools had accurate capitation for Grade 7 learners, 187 schools, with a total enrollment of 29,653 students, received funding for only 22,313 learners, leaving 7,340 students unfunded.

The report faults the State Department for not verifying data through Sub-County offices before disbursement, which would have ensured all learners were captured in NEMIS.

The audit also highlighted issues with NEMIS, noting its lack of a cut-off date for student updates, making it challenging to confirm enrollment at a specific time.

Additionally, some Grade 7 classes were overcrowded, with 80 to 100 learners per class, exceeding the recommended maximum of 45.

Many schools also lacked science laboratories.

 “In the circumstances, the accuracy, completeness, and regularity of subsidies and transfers totalling Sh63.2 billion and Sh52.4 billion could not be confirmed,” the audit concluded.

Education Principal Secretary Julius Bitok, appearing before the National Assembly Public Accounts Committee (PAC), attributed the undisbursed Sh55,946 in secondary education to the rounding off of capitation rates for over 4 million learners.

The Sh408.4 million shortfall in primary school funding resulted from a reduced learner count, as the budget included Grade 7 learners who were funded under junior schools.

 Bitok explained that schools must acknowledge receipt of funds. Secondary schools submit acknowledgement receipts to the Principal Secretary via the County Director of Education, with a sample report uploaded to NEMIS.

 Primary schools submit physical receipts to the Principal Secretary. For FPE, capitation was historically disbursed through the Education Management Information System (EMIS), using data submitted by head teachers via Sub-County and County Directors in the first term.

Schools with significant enrollment changes could request adjustments. In term two of 2023, NEMIS was used for primary school capitation due to its real-time, reliable data.

Regarding NEMIS’s continuous updates, Bitok noted that this design ensures real-time data for statutory reporting.

Disbursement data is captured on a specific date, and a permanent report is maintained in NEMIS.

Schools receive a circular detailing the disbursement completion date.

The Auditor General also flagged irregularities in the construction of Competency-Based Curriculum (CBC) classrooms, citing unverified pricing and poor workmanship.

 The report noted that Sh52.47 billion in transfers to other government units included Sh3.9 billion for CBC classroom construction at a uniform cost of Sh709,398 per classroom.

 However, no bills of quantities or market survey results were provided, and the procurement method and supplier selection process were unclear.

The standard cost was deemed insufficient for a quality classroom, and no evidence showed adjustments for inflation or current market rates for construction materials.

 Bitok clarified that the government aimed to construct 10,000 CBC classrooms through a community participation procurement method, as allowed under the Public Procurement and Assets Disposal Regulations 2020.

Local contractors at the Sub-County level implemented the project under delegated authority. However, the audit found that in 215 sampled secondary schools across 27 counties, classrooms were built in just two weeks, insufficient for proper concrete curing, raising concerns about quality.

“In the circumstances, value for money for the Sh3.9 billion spent on CBC classrooms could not be confirmed,” the Auditor General stated.

 On budget performance, the audit reported a budget of Sh134.8 billion against actual receipts of Sh129.4 billion, resulting in a Sh5.4 billion (4%) shortfall.