Government moves to fix school funding amid ghost schools challenges.

The government has intensified efforts to resolve long-standing financial challenges facing public schools, marked by the early release of capitation funds and sweeping reforms

aimed at sealing loopholes that previously led to massive losses through ghost learners and non-existent schools.

Education Cabinet Secretary Julius Ogamba said for the first time in over a decade, the Ministry of Education released capitation funds before schools reopened, a move officials

say is meant to stabilise learning, reduce disruptions, and ease pressure on parents.

The CS noted that the government disbursed Sh44.2 billion as capitation for learners in all public basic education institutions ahead of the current school year.

“We also continue to support our learners with capitation, in fulfilment of the Government’s obligation to provide free and compulsory basic education,” Ogamba said.

According to the ministry, Sh3.7 billion has been allocated to Free Primary Education, Sh14.46 billion to Free Day Junior Secondary School Education, and Sh26.08 billion to Free

Day Secondary Education, bringing the total to Sh44.25 billion.

“This is the first time in over ten years that capitation has been disbursed before schools opening. Heads of Institutions are expected to ensure prudent use of these public

resources for the benefit of learners, and to desist from imposing any extra levies or fees.”

Capitation delays have for years pushed schools into debt, forcing administrators to run on credit or pass costs to parents.

The early disbursement signals a policy shift as the government seeks to restore confidence in public education financing.

However, the reforms come against the backdrop of a damning special audit that exposed how billions of shillings meant for schools were lost through inflated enrolment figures,

weak controls, and systemic failures within the National Education Management Information System (NEMIS).

According to the audit, which will be tabled in Parliament this month, taxpayers lost over Sh3.7 billion between the 2020/2021 and 2023/2024 financial years due to ghost learners and non-existent schools.

The audit, sanctioned by the National Assembly Public Accounts Committee chaired by Butere MP Tindi Mwale, revealed widespread discrepancies across 32 counties, raising serious accountability concerns.

The Auditor General found that 354 secondary schools received capitation exceeding their actual enrolment, leading to overpayments of Sh3.59 billion.

Nearly 99 junior secondary schools were overfunded by Sh30.8 million, while 270 primary schools received funds for learners who did not exist. In total, overfunding across all

levels surpassed Sh3.7 billion, largely driven by inflated data captured in NEMIS.

Even more alarming, the audit uncovered that 33 non-existent schools received Sh3.7 billion, while 14 schools sampled in a separate review were paid Sh16.6 billion despites not

appearing in records held by County Directors of Education.

“The CDEs were not aware of their existence,” Auditor Justus Okumu told MPs.

The report also revealed that six closed schools received nearly Sh900,000, thirteen schools with mismatched registration names received Sh11 million, and three schools

operating a single bank account were paid Sh103.3 million, undermining transparency.

Ghost learners were detected in 723 out of 1,039 sampled schools, while weak audit trails and lack of harmonised data among agencies such as TSC, KNEC and KEPSEA compounded the problem.

“These discrepancies indicate weaknesses in data capture and validation controls, which may lead to misreporting, distorted resource allocation and potentially enable fraud,” Okumu said.

While billions were wasted through overfunding, the audit also showed that many schools were severely underfunded.

Over four years, public schools suffered a Sh117 billion shortfall. Secondary schools were underfunded by Sh71 billion, junior secondary schools by Sh31.9 billion, and primary schools by Sh14 billion, with Special Needs Education programmes also affected.

“The main problem facing public schools is underfunding,” Okumu noted, adding that delayed and scaled-down disbursements forced schools to shelve planned activities or accumulate pending bills.

In response to the audit findings, the government has accelerated the transition from NEMIS to the Kenya Education Management Information System (KEMIS), a new digital platform expected to go live in January 2026.

Education Principal Secretary Julius Bitok said KEMIS will enable real-time tracking of learners, schools and resources, sealing loopholes that allowed manipulation of data.

“NEMIS was not an intelligent system. It was rigid and not integratable to other systems. Starting January 2026, KEMIS will be live… allowing full learner tracking,” Bitok said, describing KEMIS as a one-stop platform linking basic education, TVETs and universities. Under the new system, learner data will be consolidated from early childhood to university level, improving accuracy in teacher deployment, textbook distribution and capitation allocation.

The platform will also integrate with civil registration systems under the Maisha ecosystem, assigning each learner a Unique Personal Identifier (UPI) from birth.

The PS said the integration will ensure accurate tracking of education transitions, including deaths, further strengthening data integrity.

Beyond basic education, Ogamba said the government is also addressing affordability at the tertiary level through the Student-Centred Funding Model, which provides scholarships and loans based on need.

He added that fees in public universities have been reduced by 15 to 40 per cent, with semester charges now ranging from Sh5,800 to Sh75,000.

Members of Parliament have welcomed the reforms, with Education Committee Chair Julius Melly saying accurate data is critical for sound budgeting and accountability.

“Whoever has accurate data is well placed to make appropriate decisions on budget allocation,” Melly said.