MPs raise concerns over school debts and bank loans

Audio By Vocalize

The National Assembly Public Investments Committee on Governance and Education has raised concerns over financial management in Kenya’s national schools.

MPs warn that growing fee arrears, unauthorised borrowing and weak procurement practices could expose public institutions to serious financial risks.

The committee, chaired by Luanda MP Dick Maungu, raised the concerns while examining Auditor-General’s reports covering the 2020/21 to 2024/25 financial years for several national schools.

The scrutiny was conducted during the committee’s retreat where principals and senior school administrators from institutions including Ng’iya Girls High School, Maseno School, Maranda Boys High School and Chavakali Boys High School appeared before MPs.

One of the major concerns was the accumulation of outstanding school fees, with some national schools reporting debts dating back more than a decade.

Maungu said schools had millions of shillings in unpaid fees, with some arrears dating as far back as 2010 and 2015.

“A matter came out that schools have millions of shillings which are collected, and you find some of them date back to 2015 or 2010,” he said.

Maungu said the situation placed school heads in a difficult position because they were expected to recover outstanding fees while at the same time complying with government directives barring schools from withholding students’ certificates because of unpaid fees.

“We have advised them that they don't need to hold a certificate for the learner because this student wants to join university or college. On the other side, they need to have this money paid,” Maungu said.

He proposed that schools prepare detailed schedules showing long-standing fee arrears and submit them to the Ministry of Education for consideration. Where the debts require a waiver, the ministry would be expected to process the request through the relevant government structures.

Maungu also linked part of the schools’ outstanding receivables to delays in government capitation, calling on the government to release funds on time to ease pressure on school administrators.

“Some of those receivables are due to capitation not being sent. We call upon the Government to ensure that it supports the head teachers by making their work easier by sending capitation as it should,” he said.

The committee also expressed concern over national schools  obtaining loans from commercial banks to finance construction and other projects without securing the required government approvals.

Maungu cited Ng’iya Girls High School, where the committee was informed that the institution had previously obtained a bank loan of about Sh50 million for a project estimated to cost approximately Sh150 million.

Although MPs were informed that the loan had since been cleared, the chairman questioned whether the school had obtained the necessary approvals from the Ministry of Education and the National Treasury before taking the facility.

“The law is very clear. No principal can simply walk into a bank and take a facility. There should be approvals from the Ministry of Education and Treasury,” he said.

Maungu warned that allowing school administrators to borrow without strict controls could create an unsustainable financial burden for public institutions.

“That should be very limited. If you allow principals to keep borrowing money left, right and centre, we shall enter into a total mess,” he said.

The committee intends to make recommendations to Parliament on how borrowing by public schools should be regulated.

MPs also questioned the failure by some national schools to employ qualified procurement officers despite being public institutions required to comply with the Public Procurement and Asset Disposal Act.

Maungu said schools could not operate procurement systems as though they were private entities.

“The Public Procurement and Asset Disposal Act is very clear as to how public institutions must procure,” he said.

“It is unfortunate that some of our schools procure as if they are procuring for private entities.”

He said national schools should have qualified heads of procurement to ensure that the acquisition of goods and services follows the law. For smaller institutions unable to employ full-time specialists, he suggested that the Ministry of Education could offer procurement support through its sub-county structures.