Mudavadi: Sh2 billion school funds lost as digital crackdown begins
Education
By
Mike Kihaki
| Jul 27, 2025
Prime Cabinet Secretary Musalia Mudavadi has accused education officials of misusing up to Sh2 billion in capitation funds and vowed a digital crackdown to stop the theft.
Mudavadi defended the digitisation of the capitation disbursement system, calling it an overdue reform to restore transparency and accountability in school funding.
“We have received disturbing reports suggesting that capitation funds have been misappropriated, with some estimates indicating losses of up to Sh2 billion. This must stop,” said Mudavadi.
The new system, developed by the Ministry of Education in collaboration with the Ministry of Information, Communication and the Digital Economy, will track funds down to the school level.
“Every education official must be accountable. We are putting in place systems to track every coin disbursed right down to the school level,” noted Mudavadi.
READ MORE
IMF to peg future funding on governance reforms, graft purge
Posta Kenya liabilities near Sh10b mark
GDC on the spot over allegations of 'oppressive' labour practices
How Kenya can speed up e-mobility
Talanta City: How Kenya is catching up to East Africa's stadium giants
Coffee farmers urged to track Nairobi coffee exchange for fair market prices
New EU laws brew trouble for Kenya's smallholder coffee farmers
Kenya and rest of Africa lagging in green energy wave, UN warns
He claimed that some individuals within the education sector are resisting the digitisation efforts to protect their illegal gains.
“When the President said, ‘Let’s digitise capitation,’ some people started making noise. They prefer manual systems so they can continue siphoning money meant for our children. We will not allow that,” observed Mudavadi.
The government says the full rollout of the digital system through the national eCitizen platform will seal loopholes and build public trust in education spending. The portal will offer real-time tracking of allocations and create an auditable trail for all transactions.
“There will be no room for misuse under the new digital framework. We are serious about protecting public funds and the future of our children,” explained Mudavadi.
Capitation funds are disbursed in three instalments—50 per cent in Term One, 30 per cent in Term Two and the remaining 20 per cent in Term Three. These funds are meant to cover tuition, infrastructure and student welfare.
However, with weak oversight in the manual system, billions have allegedly been diverted or misused, leaving schools underfunded and learners stranded.
“This is not just about technology. It’s about trust, it’s about service delivery, and it’s about protecting the future of our children,” said Mudavadi.
The reforms come as the government prepares a Sh600 billion education budget for the next financial year. Mudavadi said every shilling must be traceable and used for its intended purpose.
“We want to audit the entire education budget—where it goes, what it supports, and how we can deploy it more effectively to benefit our children,” he added.