The Auditor General has revealed financial mismanagement at St. Michael Kabaa, prompting parents to urge the EACC to investigate, apprehend, and prosecute Paul Mwangele

The report uncovers significant corruption and exploitation of parents through unlawful levies.

The embezzlement of public funds occurred during Mwangele's leadership, during which parents accused him of acting independently, while those expressing differing views were coerced, threatened, and intimidated into accepting illegal practices.

Parents are now requesting that the EACC conduct a more thorough investigation to uncover the loss and theft of public funds.

Auditor Gener Nancy Gathungu has raised concerns over unsupported payments for tuition and boarding school payments amounting to millions which were not supported by any purchase orders, request for quotations and professional opinions.

She said many schools failed to provide evidence to support how they spent the funds.

According to the report, despite some schools receiving revenues from Parents Association, the revenue was not deposited to the school account.

IRREGULAR TRANSFER OF DEVELOPMENT FUNDS TO SCHOOL FUND ACCOUNT

According to St.Michael Kabaa Audit Report,the statement of receipts and payments reflects miscellaneous income of Kshs.12,839,473 as disclosed in the financial statements. 

Included in this balance is Kshs.9,581,378 in respect to bus fees. 

However, review of records availed for audit revealed that Kshs.4,143,863 had been transferred from development account to school fund (recurrent) account contrary to Regulation 48(1)(d)(e) of the Public Finance Management (National Government) Regulations, 2015. 

Further, approval from the Ministry for collection fee from parents to finance the new bus was not provided for audit review.

In the circumstances, Management was in breach of the law.

LONG OUTSTANDING ACCOUNTS PAYABLES

The statement of assets and liabilities and as disclosed in the financial statements reflects accounts payables balance of Kshs.27,025,608. 

However, included in the balance are accounts payables balance of Kshs.7,176,789 which had been outstanding for more than one (1) years.

 This was contrary to Section 53 (8) of the Public Procurement and Asset Disposal Act, 2015.

INCOMPLETE PROCUREMENT PLAN

Review of the procurement plan provided for audit revealed that for all goods, works and services in the plan, the plan did not contain; planned delivery, implementation or completion dates for all goods, works, or services required, goods, works and services that should be procured within a single-year period or under a multi-year arrangement, items that may be aggregated for procurement as a single package or for procurement through any applicable arrangements for common-user items, items that should be packaged into lots, the appropriate procurement method for each item, appropriate procurement method for each procurement requirement and an indication of the budget available and sources of funding. 

This is contrary to Regulation 41, of the Public Procurement and Asset Disposal Regulations, 2020.

STAFF EARNING LESS THAN A THIRD OF BASIC SALARY

The statement of receipts and payments reflects total expenditure of Kshs.71 ,641,577 and as disclosed in the financial statements. 

Included in this is Kshs.2,347,600 and Kshs.10,997,434 respectively in respect to personnel emolument.

However, two (2)employee earned net salary less than a third of the basic salary contrary to Section 19(3) of Employment act, 2019 and part C.1(3) of the Human Resource Policies and Procedures Manual for the Public Service, 2016. 

Management did not give satisfactory explanations for failure to comply with the policy, which may expose the staff to pecuniary embarrassment.

In the circumstances, Management contravened the policy on salary deductions which may expose the staff to pecuniary embarrassment.

UNBALANCED BUDGET

The statement of budget versus actual amount reflects final budgeted receipts of Kshs.74,600,600 and final budgeted payment of Kshs.67,510,800 resulting to unbalanced budget by Kshs.7,089,800. 

This was contrary to Section 33(c) of the Public Finance Management Acl,2012 that require budget to be balanced.

In the circumstances, Management was in breach of the law.

IRREGULAR TRANSFER OF FUNDS

The statement of receipts and payments reflects boarding and school fund payments amount of Kshs.58,505,792 as disclosed the financial statements. 

Included in the expenditure is Kshs.935,530 and Kshs.110,500 transferred to Kenya Secondary School Heads Association and Catholic School Principals Association (CaSPA).

However, these are welfare organization that draws their membership from School Principals only. 

These organizations are not defined in Government Funding system and there is no assurance that it has implemented effective, efficient, and transparent financial management and internal control systems to manage the funds transferred by schools.

In the circumstances, the value for money for Kshs.935,530 and Kshs.110,500 both totalling Kshs.1,046,030 transferred to KESSHA and CaSPA could not be confirmed.

UNDISCLOSED BIOLOGICAL ASSETS

Physical verification revealed that the School had trees of unknown value as at

30 June, 2024.

However, valuation report was not provided for audit review. 

Further, the biological assets were not disclosed in the financial statements under other important disclosure section of the financial statements.

In the circumstances, the value of biological assets could not be confirmed