Auditor General Discloses Issues at Starehe Boys Centre


The Auditor General's report for the fiscal year ending June 30, 2024, has uncovered several instances where the management of the school acted in violation of the law, potentially resulting in significant financial losses or unaccounted funds.

The report indicates that the Statement of Receipts and Payments, along with Note 4 of the financial statements, shows an income of Kshs. 92,604,558 attributed to the school fund income from parents' contributions.

An examination of the students' school fees payment schedule revealed that the school collected Kshs. 89,820,000 from both fully paying and partially sponsored students, leading to an overstatement of Kshs. 2,784,558 in school fees from the boys. Consequently, the accuracy and completeness of the charitable support amounting to Kshs. 92,604,558 could not be verified.

The Statement of Receipts and Payments, as detailed in Note 4 of the financial statements, reflects school fund income from parents' contributions totaling Kshs. 92,604,558.

A review of student files indicated that the school is classified as Category A, and the management entered into agreements with parents to charge varying school fees between Kshs. 140,000 and Kshs. 300,000 based on the parents' financial capacity, which contravenes Section 3.2 of the Ministry of Education Circular Number MOE-HQS/311313 regarding fees for Category A boarding schools, which is set at Kshs. 67,244 and requires written authorization from the Cabinet Secretary.

Therefore, the management was in violation of the law. The Statement of Financial Assets and Liabilities shows Government securities amounting to Kshs. 39,192,668. However, the ledger reflects a balance of Kshs. 39,112,667, resulting in an unexplained discrepancy of Kshs. 80,001. As a result, the accuracy and completeness of the Government securities could not be confirmed.

The financial position statement indicates an accounts receivable balance of Kshs. 25,412,418, as detailed in Note 13 of the financial statements.

This balance includes student debtors totaling Kshs. 23,631,875, which have remained outstanding for over two (2) years. Nevertheless, the absence of a policy regarding the impairment of long-standing fee arrears raises concerns about the accuracy of the accounts receivable balance.

Consequently, the precision and full recovery of the outstanding receivable balance of Kshs. 23,631,875 could not be verified. The receipts and payments statement, along with Notes 1 and 2 of the financial statements, shows capitation grants for tuition and operational purposes amounting to Kshs. 2,834,071 and Kshs. 10,143,328, respectively.

However, a review of the NEMIS records compared to the student enrollment records provided by the School revealed an overfunding of Kshs. 754,854 due to the registration of excess learners in NEMIS.

The receipts and payments statement also reflects operational income of Kshs. 10,143,328, as noted in Note 2 of the financial statements. Included in the Auditor-General's Report on Starehe Boys Centre for the year ending 30 June 2024, Nairobi City, is an amount of Kshs. 4,498,400 designated for infrastructure grants, which were intended to be transferred to the infrastructure bank account for the maintenance and enhancement of the school's facilities. However, no funds were transferred to the infrastructure account, in violation of The Ministry of Education Circular Ref. No: MOE.HQS/3/13/3 dated 16 June 2021.

The statement of receipts and payments indicates that the expenditure for boarding operations amounts to Kshs.100,588,384, as detailed in Note 7 of the financial statements. Included in this total are expenses for clothing, shoes, and bedding, which sum up to Kshs.8,384,341.

A review of payment vouchers and other supporting documents has shown that payments were made to a supplier for the provision of school uniforms, in violation of regulation 67 (3) of the Basic Education Act, 2015, which stipulates that no institution shall designate a specific supplier for school uniforms or any other materials for parents or guardians.

 

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