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Immediate former National Treasury Cabinet Secretary Njuguna Ndung’u yesterday opened the lid on the rot in President William  Ruto’s government as he handed over to his successor John Mbadi.

 He said the government was riddled with ghost workers, false pensioners and a broken education model that requires urgent repair.

So broken is the funding model, according to the former CS, that non-existent schools still receive taxpayers’ money.

In his handover notes,  Prof Ndung’u was categorical that  Mbadi has a job in his hands and advised him to commission an audit of the school funding model which he says is not sustainable and cited incidences of the government releasing money to non-existent schools, colleges and even learners.

The former CS noted that the government must relook into the education model, way down from the basic to university level and conform with economic reality.

Ghost workers

On ghost workers and pensioners, Prof Ndung’u calls for government urgency to eliminate the vice by linking the Government Payroll to IFMIS and KRA’s PAYE platform, a suggestion that Mbadi has promised to embrace.

Prof Ndung’u said that although the proposal has met resistance, there is an urgent need for its implementation to clean up the national payroll in order to eliminate ghost workers and pensioners in the public service.

At the moment he said the government spends about 38 percent of its annual budget on salaries, wages and pensions for civil servants.

“To eliminate ghost workers/ pensioners, link up all those people who pay taxes so that they can be identified.,” Prof Ndung’u said.

He said school capitation for primary and secondary schools and the funding model for the tertiary institutions need to be re-evaluated as the country cannot afford to continue spending a huge chunk of his budget on this.

At the moment, the government spends an estimated Sh656.6 billion, which translates to 28 percent of the entire budget for the education sector, which is both untenable and unrealistic.

In the 2024/2025 budget, the education sector accounted for the largest share of the National Budget at 34.8 per cent amounting to over Sh654 billion which is partly meant for capitation, infrastructure, and staffing of schools, especially Junior Secondary Schools.

He said: “Audit the School Capitation and Budgeting Process. The Education funding model is not sustainable and has to be reformed after a comprehensive auditing process.”

“It is a fact that we cannot afford this capitation, it is too much. I have been there for 22 months and if we don’t restructure this, we shall continue to be in trouble,” he said.

Ndung’u sentiments come at a time when some unscrupulous government officials have been accused of manipulating enrolment figures as well as flouting procurement procedures to steal billions of shillings meant for free education.

In the latest report for the state Department for Early Learning and Basic Education, Auditor General Nancy Gathungu raised questions over unconfirmed capitation to Free Primary Education and Free Day Secondary Education.

NEMIS questioned

Gathungu questioned why the disbursement of Free Primary Education was made manually and not through the National Education Management and Information System (NEMIS), making it impossible to confirm pupils’ enrolment per school.

The report noted that field verification carried out in three hundred twelve (312) sampled Junior Secondary Schools (JSS) located in twenty-seven (27) Counties to compare actual student population with NEMIS data used by the State Department to allocate capitation, revealed that capitation for Grade 7 learners in 125 of the sampled schools was accurate, however, 187 out of the sampled three hundred and twelve 312 JSS had students that did not receive capitation.

The actual enrolment of the 187 JSSs was 29,653 learners but ended up receiving capitation for 22,313 learners, leaving 7,340 learners without funding.

The report also raises concerns that the NEMIS as configured does not have a cutoff and updates on a student continuity basis making it difficult to confirm the number of students at any specific time.

“The State Department did not ensure that the data used for JSS capitation was verified by the respective Sub-County Offices before disbursement of funds. This would have ensured that all students are captured on NEMIS for funding of all JSS learners,” the report stated.

On his part, Mbadi sounded a warning to government officers perceived to be standing in the way of reforms, telling them to pave the way for those ready to deliver before they are sacked.

“So anyone who is standing in the way of this reform please give way. Please allow Kenya to move forward. Don’t be an obstacle. Payroll reforms must be done.”

In January this year, the Public Service Commission (PSC) unmasked close to 20,000 ghost workers on the government payroll.

In the annual report covering the 2022/2023 financial year, PSC established that there were 19,467 additional employees in different government agencies and departments against the approved staffing levels.

State House and the New Kenya Cooperative Creameries (KCC) Limited had an excess of over 100 members each with 15 other organizations listed as having more than 50 per cent of its recommended staff establishment.

Mbadi disclosed that he will reinstate certain “progressive clauses” in the contentious Finance Bill 2024 so spur the economy and warned individuals he claimed have been out to sabotage reforms at the Treasury.

Chaotic system

“If there are people who have benefited from the chaotic system, you have benefited enough. Now allow Kenyans to get value for money,” Mbadi said.

The former Nominated MP said he would reinstate provisions in the Finance Bill that spell out reducing tax expenditures and extension of tax amnesty.

Mbadi, who promised to institute far-reaching reforms at the Treasury, starting from the integration of the national payroll with the Integrated Financial Management Information System (IFMIS), said he has tasked a special team to work on some of the proposals in the Bill for reintroduction in Parliament.

“Anyone standing in our way to integrate our payroll systems from the state departments to IFMIS, which is our parent accounting system, and all the way to the Kenya Revenue Authority (KRA) should just leave immediately,” Mbadi warned.

Mbadi also avoided introducing reforms in the procurement area and prudent use of the scarce resources in the government.

“We don’t have an option now that resources have become scarce. We must prudently and efficiently use public resources by making public procurement systems efficient and not open to abuse. We must make sure end-to-end procurement works,” he told reporters gathered at the National Treasury during the handover ceremony.