New Sh5.5b puzzle hits Jogoo House school funds

Business

By Sam Otieno

Fresh questions have surfaced over the disbursement of Free Primary Education funds sparking fears of loss of over Sh5.5 billion.

Documents in our possession indicate a total of Sh47.4 billion has been disbursed under the FPE programme from 2003 to 2009. But billions more were held back for unexplained reasons.

This will be the latest brickbat that the Ministry of Education will be fending off, after weeks of reeling from a storm over misappropriation of funds for free schooling.

These questions arose even as it emerged that Education Permanent Secretary Karega Mutahi has belatedly asked head teachers to account for funds received for FPE.

With investigators from the Kenya Anti Corruption Commission (KACC) hot on the heels of accounting officers, Prof Mutahi has asked head teachers to enumerate how they spent cash allocated to them.

Data collected from primary schools across the country confirm Sh5,524,500,000 has been under-disbursed since 2004.

Another Sh2 billion that is normally sent to schools for infrastructure every financial year is also the subject of claims of misappropriation.

For instance during the last financial year a total of Sh2.1 billion donor money was disbursed for infrastructure development to needy primary schools. However, there are no clear criteria for determining a needy school.

Unspecified account

The infrastructure money is usually sent electronically.

Sources said some head teachers are then informed that money has been wired in the school accounts and instructed to spend part of it and return the remaining in another unspecified account.

One of the head teachers said schools are then told to account for the total money through fake receipts.

"There are agents who come and collect the extra money once the disbursement has been made," said the head teacher.

In his New Year message to Kenyans President Kibaki issued a stern warning that those who misappropriated FPE funds would face stern action.

KACC spokesman Nicholas Simani said officers were busy in the field collecting evidence but has hinted that the findings will be ‘shocking’ as the commission tries to unravel the mystery of misappropriated funds.

Prof Mutahi’s instructions could be a pointer at the failure of the accounting and audit functions at the ministry that has been on the spot for weeks now.

Besides, the head teachers’ reports are not likely to shed light into any dubious dealings because they will be essentially auditing themselves by volunteering information.

Jogoo House returned to the radar of graft in a week when the anti-graft body is expected to release an update of investigations surrounding Sh100 million misappropriated by officials at the ministry.

Stung by media reports of misappropriation of funds Prof Mutahi has issued forms to all head teachers and a circular asking them to itemise how funds were spent.

The circular sent to schools is dated January 4, 2010, asked head teachers to indicate how much they have received, dates of payments, purposes of the fund and committee minutes that approved use of funds.

The head teachers are also required to indicate types of tenders they have awarded, and how far the projects have gone for ongoing undertakings.

But interestingly, Jogoo House has grown cold feet over the subscription of The Standard newspaper copies for the last four days. The move is attributed to the paper’s bold coverage of the scandal.

Documents in our possession show that in 2004, the second year of the free learning programme, each child was allocated Sh75 less that the stipulated amount.

At that time the pupil enrolment in schools totalled 8.3 million meaning that close to Sh600 million was underpaid.

Disbursed funds

Normally, each pupil is supposed to get Sh1,020 every year, broken down to Sh650 for general purpose paid under Account One normally commonly known as Simba Account and Sh370 for the purchase of textbooks paid through Account Two known as General Purpose Account.

Funds for Account One are meant for the purchase of instructional materials that include textbooks while money from the general purpose account is used to pay watchmen, general repairs, activities and other subsistence.

Instead of disbursing Sh185 per pupil in both tranches for Account Two, the ministry disbursed Sh110 per pupil hence Sh75 less.

In 2005, schools were underpaid Sh140 per pupil for the general-purpose account but paid full amount for textbooks.

At that time, the ministry had budgeted for 8.3 million pupils meaning that Sh1.1 billion was withheld.

The trend worsened in 2006 when Sh350 was withheld from the general purpose account translating to an under-disbursement of more than Sh2.9 billion.

In 2007 and 2008, the 8.3 million and 8.4 million pupils respectively were underpaid for by Sh50. This means that the ministry withheld Sh415 million and Sh420 million respectively.

Yesterday Education Minister Prof Sam Ongeri said he has not checked the figures but was quick to add that he joined the ministry in 2008, five years after the FPE programme kicked off.

"If scandals started or date back to 2003, kindly note that I joined the ministry in 2008," said Ongeri.

Reached on the telephone, Mutahi said this is as a result of a mathematical problem in enrolment figures submitted by respective schools. Karega denied claims that the money remained to be used at the ministry.

"If a school submitted a number that is less the number of the pupils they have by the time of disbursement, there will be a shortfall," Mutahi said.

He said currently the ministry is using figures of November yet there might be an increase in some schools.

The PS said genuine reported cases have always been dealt with by adding up the deficit of affected schools.

Financial year

However, the refund only happens if a school reports a case in time while late reporting means that a particular case will be dealt with in the next tranche, he said.

The Standard has established that the withheld money is usually deposited in an account but is suspiciously disbursed to certain schools two weeks before the end of each financial year.

"Every end of each financial year, there emerges a mysterious allocation of money usually between Sh150 to 200 million. The money is never audited and the criteria to disburse the money to schools is never clear," said the source.

The source who is familiar with operations at the ministry, but who cannot be named because of the sensitivity of the matter said Jogoo House is usually busy just before the end of a financial year because each senior officer wants to include a school which he or she has an interest in on the disbursement list".

"Even MPs bring schools to benefit in the same Ukarabati list," said the source.

The money issued by the chief finance officer is usually referred to as "Ukarabati" which means rehabilitation in Kiswahili.

The money sent to schools is then withdrawn by head teachers and deposited in another account.

Bank statements in our possession indicate that money totalling Sh840,000 was sent to a school in Nyanza and later Sh740, 000 recalled.

Other statements indicate that FPE money is paid to other private institutions.

A cartel at the ministry led by an assistant director of education at the basic section then collects the money and distributes it to senior officers in the syndicate.

Business
Premium Financial hardships dampen Easter celebrations among Kenyans
Business
Premium Water PS Korir put on the spot over Sh14m dam land
Business
Premium Looming crisis as top lenders stare at Sh500b in bad loans
Business
Premium Ruto's food security hopes facing storm amid fake fertiliser scam