Secondary schools are on the spot for irregularly charging extra school fees without the approval of the Ministry of Education, an audit report has revealed.
The audit conducted by the Auditor General Nancy Gathungu, also fingers several secondary schools over unsupported and unaccounted for capitation and grants advanced to them for construction of various development projects.
The audits for the period covering 2021, 2022 and part of 2023, also faulted several schools for illegally transferring money to the Kenya Secondary School Heads Association (KSSHA) kitty.
The association is a welfare organisation bringing together school heads only and it is not defined in government funding.
In the latest reports which reviewed several secondary schools across the country, Gathungu questioned how the institutions were implementing various development projects as most of them were in breach of the law.
The schools on the spot Maranda High school, a national school in Siaya county, Nyamira Girls High School in Siaya, Moi Girls High School Kamusinga(in Bungoma), Sugoi Girls High School (Uasin Gishu), Chania Girls High School(Kiambu) and St Francis (Mang’u) High School (Kiambu).
Others with cash questions include Friends Boys High School Misikhu (Bungoma), Rigoma Girls Secondary School(Nyamira), Our Lady of Mercy Rangenyo Girls secondary school in Nyamira county, St Mathias Busia High School(Busia), Nthangu Mixed Day and Boarding Secondary School(Makueni), Thomas Amagoro Girls Secondary School(Busia) and St Francis of Assis Kwatombe (Machakos).
Others are St Thomas Aquinas Madende in Busia, Kisayano Secondary School (Makueni), Vuleni Secondary School (Makueni) and Kyamulendu secondary school (Machakos).
Additional fees
For instance, in Maranda High school, the report raises concerns over additional fees after the school collected Sh34.7 million from harambee funds for a burnt dormitory yet there was no evidence of approval to charge the additional cash.
Reads the report: “ln addition, the amount includes harambee funds of Sh2b And Sh12.77 million funds for the burnt dormitory. However, there was no evidence of approval to charge the additional fees.”
The report also raises concerns over the school’s unaccounted for grants amounting to Sh3.3 million.
It shows that out of the total funds of Sh8.4 million that was supposed to be disbursed for grants at the school, only Sh915,798 was released resulting in a difference of Sh7.5 million which was retained by the Ministry of Education.
“There was no evidence of accounting for this difference as receipts or payment in the financial statements. ln addition, review of the National Education Management Information System (NEMIS) report and the School’s manual enrolment register revealed inconsistencies in the number of students resulting in funding difference of Sh3,287,415 and which was not been disclosed as accounts receivable.”
The school is also on the spot over irregular cash payments relating to boarding and school fund payment amounting to Sh1.6 million, irregular award of contract for provision of security services amounting to Sh1.3 million after the tender evaluation minutes revealed that despite five companies tendering for the contract, the fourth lowest bidder was awarded the contract which was contrary to Section 86(1)(a) of the Public procurement and Asset Disposal Act, 2015.
Reads the report: “ln the circumstances, Management was in breach of the law.”
The report also shows that there was no value for money amounting to Sh 1.7 million that was transferred to the principal’s lobby.
Repairs and maintenance
It also raises concerns over unsupported capitation grants for operations, repairs and maintenance amounting to Sh13.4 million after the school failed to provide supporting documents including NEMIS receipts schedules and acknowledgments to the Ministry of Education were not provided for audit.
The school Board of Management (BOM) is also on the spot after it was paid subsistence allowances totaling Sh 1.4 million yet the expenditure was not supported by signed Board minutes and attendance.
At Gitwe Girls in Kiambu county, the report shows that there were various queries including Unsupported inventory, lack of an approved procurement plan as well as long outstanding student accounts receivable
“The balance includes Sh3,698,286 in respect of student fee arrears which have been outstanding for long period. However, the school did not provide an ageing analysis for audit review. Further, management did not provide recovery strategies for the long outstanding fees arrears. In the circumstances, the recoverability of the fee arrears balance of Sh3,698,286 could not be confirmed.”
Gathungu fingered Nyamira Girls’ High School, for charging unapproved additional fees.
A review of documents revealed that the school had charged extra levies of Sh8,725 per student for teachers employed by the Board of Management (BOM) amounting to Sh19.2 million yet there were no approvals from the Ministry of Education for the additional fees charged and BOM were not provided for audit.
This was contrary to Ministry of Education circular which directed that any school that desires to charge amounts above the stipulated fees to make a formal request for approval I to the Cabinet Secretary.
“ln the circumstances, management was in breach of the guidelines issued by the Ministry of Education law.”
Gathungu also raised concerns over inconsistencies in Students Enrolment Data that resulted in under-funding of the school by an amount of Sh6.4 million.
“A review of the National Education Management Information System (NEMIS) against the School’s manual enrolment register for the period under review revealed inconsistencies in respect of the number of students captured in the two registers with the number of students captured in NEMIS being lower than the number in the School’s manual register,” says the report.
The report reveals a number of queries including unsupported payments for school funds and other monies account, un-reconciled Bank loan repayment amounting to Sh9.2 million unsupported school fund account amounting to Sh50,000 as they were not supported with ledger schedules, summary of cash collection details and bank statements.
Boarding equipment and stores expenditure amounting to Sh9.5 million was also not supported by relevant documents.
It also shows that the school has unsupported personnel emolument amounting to Sh3.9 million, unsupported BOM teachers’ salaries amounting to Sh14.3 million as the payments were not supported with payrolls and minutes approving their appointments as well unconfirmed board allowance amounting to Sh3.4 million in respect of local transport and travel paid as subsistence allowances to the members.
Reads the report: “ln the circumstances, the accuracy and completeness of the board expenses amounting to Sh33,398,671 could not be confirmed.”
At Moi Girls’ High School Kamusinga, the report reveals a number of anomalies including unsupported capitation grants for operations- medical and insurance amounting to Sh338,200, unsupported capitation grants for operation amounting to Sh21.5 million, unsupported boarding and school fund payments worth Sh3.3 million and unsupported personnel emolument worth Sh14.6 million. Others are some of the board members serving for more than six years.
About Sh30.53 billion received by county governments in the last three financial years could have been misappropriated as they operate outside Integrated Financial Management Information System (IFMIS), Auditor General Nancy Gathungu has warned.
In a document presented to the Senate County Public Investments and Special Funds Committee, Gathungu regretted that most of the said payments received by 267 funds created by counties are mainly manual thus increasing the risk of fraud and corruption.
In the document, Gathungu reveals that out of the 267 funds, 209 were created and managed by various county governments while 58 were managed by county assemblies.
She warns that the unregulated creation of the funds creates administration challenges in oversight as her office may not be aware when new funds are created.
Out of the Sh30.53 billion received by the 267 funds, the 209 funds run by various county governments received Sh29.3 billion while the 58 funds run by the county assemblies received Sh1.23 billion.
Reads the document: “County funds operate outside IFMIS and therefore payments made by these funds may not be properly recorded as the Management Information Systems used record business transactions are mainly manual; some funds records are maintained manually. This has resulted in audit issues such as inaccuracies in the financial statements, noncompliance with the Public sector Accounting standards Board requirement, unsupported expenditures and unsupported bank withdrawals.”
At the moment, the common funds set up by county executives include the county education fund, bursary fund, county car loan and mortgage scheme fund, county enterprise fund and the social protection fund.
Others are county emergency fund, county assets leasing fund, county cooperative development revolving fund, county business stimulus fund, county persons with disability fund and the county youth and women enterprise development fund.
In the report, Gathungu also regretted that the unregulated creation of the funds not only leads to duplication of the departmental roles but also increases administration costs without commensurate benefits
She also noted that lack of documented budgeting process for the funds, reduces the level of oversight and accountability as the expenditures incurred by the funds are not captured in the quarterly reports of the Controller of Budget as they are not treated as part of the expenditure for the executive or assembly.
She notes that as the bank accounts for the funds are operated by commercial banks, the terms are unfavorable in some cases, hence attracting more costs that are nugatory in terms of bank charges.
Said Gathungu: “The county executives have been using county funds to sidestep this requirement. Cash not spent in a financial year by the county funds is not being repaid to the County Revenue Fund (CRF) to allow re-approval by the county assemblies and expenditure approval by COB.”
She also raised concerns the various funds working outside IFMIS could lead to conflict of interest mainly because the staff operating the funds are employees of the concerned County Executive or County Assembly and may even be officers in the county departments oversighting operations of the said funds.
She stated; “The officers may be oversighting themselves. This could easily undermine the objectivity in operation and oversight of the funds.”
Gathungu further raised concerns that operating the county funds separately from the main financial system can lead to inefficiencies in financial operations which includes challenges in budgeting, cash management and reporting that can impact on the overall financial health of the fund.
The move, she regretted, can also lead to duplication in budgeting as its activities and programs will be planned at the fund level and again budgeting of the same may be made under the line department.
She also noted that operating the county funds outside the main financial system can make it challenging to monitor their performance as well as create a lack of transparency in the financial transaction.
Said Gathungu: “It becomes difficult to monitor and track the inflow and outflow of funds as well as ensure accountability.”
