Jogoo House bureaucrats paid out Sh11.8 billion for free education manually, making the huge payouts vulnerable to fraud.
This was despite the government spending Sh240 million last financial year to reengineer the system meant to manage the disbursements.
The free education money has always been a cash cow for graft cartels with some insiders creating ghost schools where millions are wired.
In a new report, Auditor General Nancy Gathungu reveals that the manual process made the process opaque to scrutiny.
As a result, she cannot confirm whether the billions paid out were accurate.
“The disbursement for free primary education was made manually and not through Nemis. As such, the pupils’ enrolment per school could not be confirmed,” Gathungu says.
Ezekiel Machogu is the current Cabinet Secretary for Education while Belio Kipsang is the Principal Secretary.
Disbursements to primary and secondary schools are supposed to be done through the National Education Management Information System.
Even with Nemis, there have always been concerns about fictitious payments that could be compounded by the manual process.
Apart from ghost schools, auditors have repeatedly raised the red flag about inflation of student numbers and duplication of allocations.
Last October, the High Court granted the Ethics and Anti-Corruption Commission orders to recover Sh11 million from an Education ministry official who created a ghost school and paid monies to the same for almost a year.
Whereas the official who was responsible for disbursing government funds to schools was arrested and charged, no top guns in the ministry have been brought to book.
The new audit shows that the government has no control of Nemis.
The auditor reports in her review of national government books of accounts as of June 30, 2023, that the government has no credentials related to the system.
The report shows that during the upgrade, a new server was installed at a secondary site on an existing cloud infrastructure.
The upgrade was to enhance the system's processing and storage capabilities as well as manage the workload.
It was also to enable intelligent systems monitoring, enhance data security and provide for business continuity.
“Management did not provide for audit purposes the ownership documents of the re-engineered Nemis, including copyright registration and reservation in accordance with Section 22 of the Copyright Act, 2001,” Gathungu says.
The ministry did not present the signed handover documents that included an instructions booklet explaining each functionality to the users of Nemis.
Gathungu says the officials did not furnish her with the test environment confirmation indicating that issues that occasioned the upgrade were addressed and resolved by the reengineered Nemis.
The auditor says that the Basic Education department did not provide documentation relating to the development of the reengineered system.
The structure of its administration highlighting the officers who hold different tasks and roles in the management of the system was not provided for audit review.
In the circumstances, Gathungu says it was not possible to tell who has done what in the development, maintenance, administration, compliance and control of the system.
The auditor says that as a result of the queries it can be concluded that value for money may not have been achieved on the expenditure of Sh239 million for reengineering and ownership of Nemis.
It has further emerged that the system does not have a cutoff and updates continuously, making it difficult to confirm the number of students at a specific time.
“It was also noted that the system does not register students without birth certificates and does not fund students over 18 years.”
Owing to the problems, the auditor reported that as many as 7,340 learners did not receive funding for Junior School during the year ending June 30, 2023.
The number may be more than stated as the figure was drawn from a sample of 312 Junior Schools, which had a population of 29,653 yet only 22,313 were paid for.
Gathungu states that the State Department did not ensure that the data used for JS capitation was verified by the respective subcounty offices before disbursement of funds.
“This would have ensured that all students are captured on Nemis for funding of all JS learners,” the Auditor General says.
With the teething problems bedeviling the new level of education, Gathungu has cast doubt on the probity of the Sh52 billion spent by the department.
“The accuracy, completeness and regularity of subsidies and transfers to other government units amounting to Sh63,252,450,424 and Sh52,471,160,342 respectively could not be confirmed,” she said.
Among issues flagged by the auditor include congestion in Grade 7 classes, with some having between 80 and 100 learners.
“This was way above the required class of 45 learners, resulting in high pupil-to-teacher ratio and negative effect on teacher-student engagement,” she says.
Top Education ministry officials are further under the spotlight over shoddy works on CBC classrooms.
Gathungu reveals that the classrooms were constructed within two weeks, “which was not sufficient to allow concrete curing.
“Therefore, the potential strength and durability of concrete was not fully developed,” the report reads.
“The short construction duration and insufficient funding resulted in poor quality of the constructed classrooms,” Gathungu says after sampling 215 schools.
She states that as at the time of the audit, the sampled schools had poorly constructed classrooms with floor cracks and deep holes.
“The floor in some of the classrooms had completely come off, exposing the soil beneath.
“As a result, students had to learn in classes that had a lot of dust, exposing them to health hazards,” the auditor general says.
The audit further reveals that existing classrooms in most of the sampled schools had a ceiling and tiles or terrazzo on the floor.
The auditor has also dismissed the flat rate amount of Sh709,000 that the ministry posited as the cost per classroom.
Gathungu says it is not practical to build classrooms using a standard amount. “The standard amount was not sufficient for construction of a classroom to the required standard.”
As a result of the application, school managers were forced to source their own funding to build classrooms that matched the existing standards.
“It was not clear how the amount was arrived at given that the bills of quantities and results of market surveys were not provided for audit,” the audit report says.
“Further, the terrain and topographical layout of the schools across the country varied and, therefore, not possible to have a standard rate.”
Ministry officials did not also provide explanations on the specific procurement method that was used and how the various suppliers were identified.
“Similarly, there was no evidence that the prices had been adjusted for inflation to reflect the current market rate for acquisition of construction materials,” Gathungu says.
A number of classrooms were not in use at the time of the audit last November, while others had been converted into stores.
“In the circumstances, value for money for the construction of classrooms amounting to Sh4 billion could not be confirmed,” the Auditor General says.
The report further reveals that the ministry’s ICT assets are not safe due to lack of a steering committee.
“The lack of an ICT steering committee exposes the state department to the risk of unclear direction regarding the maintenance of information security and safeguard of ICT assets across the state department,” the Auditor General says.