The Education Ministry is on the spot for denying the Auditor-General access to a student’s database to allow her scrutinise Sh60 billion expenditure, raising fears about transparency in the use of free education funds.
The State auditor says it was not possible to verify the expenditure of Sh59,541,584,343 due to the inability to access the student enrollment data in the National Education Management Information System (Nemis) as a result of restrictions by the State Department of Early Learning and Basic Education.
Auditor-General Nancy Gathungu said several anomalies were noted in the transfer of education subsidies to schools.
She said the ministry transferred free education subsidies to 9,024 secondary schools amounting to Sh36,739,481,231 but the data on the number of students per school and county at any time of disbursement could not be verified.
“The reason for non-verification was due to inability to access the student enrollment data in the National Education Management Information System (Nemis) as a result of restrictions by the Management,” she said in a report tabled in Parliament.
Ms Gathungu has warned the ministry that failure to grant access to the Nemis system contravenes Section 9(e) (i) of the Public Audit Act, 2015.
The Act states that the Auditor-General or an authorised officer shall have powers of unrestricted access to all books, records, returns, reports, electronic or otherwise and other documents of entities listed under Article 229(4) of the Constitution.
The law also gives the Auditor-General, or an officer authorised unrestricted access to any property or premises used or held by State organs or public entities covered by Article 229(4) of the Constitution and subject to audit under the Act.
“It was therefore not possible to validate the data used for disbursement of subsidies to schools,” she said in a report covering the 2020/21 financial year.
“In the circumstances, the accuracy and validity of subsidies to Public Corporations of Sh59,541,584,343 could not be confirmed.”
Ms Gathungu said the ministry disbursed a total of Sh57.01 billion as a subsidy for free day secondary school.
She said although the management of the schools receiving subsidy funds are required to upload an acknowledgement receipt in the Nemis system as evidence of the funds in the school’s bank account, none of the listed schools raised an acknowledgement receipt in the system.
“Further, the disbursement schedule included payments amounting to Sh137,084,111 made to 225 secondary schools whose bank account numbers format differed significantly from the format of bank accounts for banks supported by the national banking system,” she said.
The auditor said there were no confirmation receipts from the benefiting schools. “It was therefore not possible to confirm whether the schools’ bank account numbers were correctly captured and the concerned schools received the funds,” she said.
On the capitation, Ms Gathungu said the disbursement report provided for audit verification including Sh8.3 million that was disbursed to schools that had the same bank account numbers even though the names and sub-county of the schools were different indicating an error in the funds’ transmission.
The anomaly was not explained and there was no evidence of refunds provided to indicate the correction of the error, Ms Gathungu said.
She also flagged a disbursement of Sh638,435,316 to secondary schools in October 2020 that comprised transfers to 3,808 schools in respect of operation account and 3,810 schools in respect of tuition account.
“Although the management (ministry) explained the amounts were as a result of some schools that had not received their earlier capitation monies for reasons that they had not updated form one admissions data in the NEMIS system together with unexplained loss of data in the system, the basis of identification of the beneficiary schools was not supported by any documentation in form of claims from the benefiting schools or evidenced by any duly approved management report or exception report from the system to indicate that the benefiting schools had not received the earlier disbursement,” she said.
The auditor said a sample of the school included on the list receiving the disbursement had been included in the schools that had received their regular disbursement on time and therefore the payment was a duplication. Ms Gathungu said the ministry did not explain the anomaly.
In addition, Ms Gathungu said payments made to 31 schools were made to the bank account whose format did not conform to the national banking system of coding.
She also raised the red flag on an amount of Sh22,140,000 paid to 82 secondary schools in the Arid and Semi-Arid Land (ASAL) areas to support the needy students in the ASALs.
Ms Gathungu said no documentation was provided to support the basis of identification of the needy schools.
