Treasury: No funds to clear Sh64 billion in unremitted capitation to schools

The National Treasury has said it will not pay Sh64 billion in unremitted capitation funds to public schools, stating that there is no provision to carry forward funds from previous financial years.

Cabinet Secretary John Mbadi clarified that funds allocated but not disbursed within a financial year cannot be paid later.

He said the government operates on a cash-based budget, meaning unutilised allocations do not roll over.

"It was budgeted for, but our budget is cash-based. If a financial year has ended and you didn't pay it, there's no money to pay later!" Mbadi said on Thursday during an interview with Spice FM.

"We don't keep money somewhere. Who do we pay that money to if the capitation was not released?"

Public primary and secondary school heads have been urging the government to clear the arrears, arguing that the financial shortfall has led to operational difficulties, with some institutions accumulating debts and facing lawsuits from suppliers.

The delayed and reduced disbursement of capitation has also affected the availability of learning materials, payment of non-teaching staff, and the provision of meals for students. Additionally, many schools have had to cut back on co-curricular activities due to the financial strain.

The official capitation per learner under the Free Primary Education (FPE) programme is Sh1,420 per year, while junior school learners are entitled to Sh15,042 annually. The Free Day Secondary Education (FDSE) programme provides for Sh22,244 per student per year, but this has been reduced to approximately Sh15,000.

Fees increase

Mbadi acknowledged that in some cases, school managements increase fees beyond the recommended levels when the government fails to disburse capitation funds in full.

"If parents were forced to pay (to cater for the deficit), and then we give schools that money, will they refund the parents? Going forward, let's make sure all the money budgeted for is released," he said.

The CS added that the government has released funds for the first term to primary and junior schools, while secondary schools still have a deficit of Sh14 billion, which he assured would be disbursed before the term ends. He also noted that public universities require Sh107 billion annually to operate effectively.

"We had Sh48.8 billion to pay capitation to schools. Out of this, Sh4.5 billion was for FPE for the first term, which we paid in full; Sh15.1 billion for Junior Secondary School, which we also paid in full. The Sh20 billion for secondary schools— we have paid Sh14 billion so far, and the term hasn't ended. We'll make sure we pay the rest," he said.

Meanwhile, secondary school principals have proposed an increase in school fees to cushion institutions against financial strain. The Kenya Secondary Schools Heads Association (Kessha) argues that the current capitation, which was last reviewed in 2018, has been reduced over time and does not factor in inflation.

In their proposal to the Ministry of Education, Kessha recommends that parents with children in national schools pay an additional Sh19,628 annually, while those in extra-county schools should contribute an extra Sh27,488. Although students in day schools are not required to pay tuition fees, Kessha now wants them to pay Sh5,372 per year.

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"The partial and delayed disbursement of capitation funds, coupled with the rising costs of goods and services, has placed an immense strain on the management and sustainability of schools. In addition, the inadequate fees charged to students, which fail to synchronise with the current economic realities, have exacerbated the financial challenges," reads the proposal signed by Kessha Chair Willy Kuria.

Kessha has warned that unless the government urgently addresses the issue, secondary schools across the country risk closure, a situation that would have a devastating impact on students' education.