The Auditor General has revealed financial mismanagement, irregularities, and declining academic performance at Hillcrest Secondary School in Nakuru under the leadership of Madam Felister Tonui

The most recent report from the Auditor General regarding Hillcrest Secondary School in Nakuru County has uncovered several instances of financial irregularities, mismanagement, and the misappropriation of public resources during Madam Felister Tonui's administration.

 

Nancy Gathungu's audit report has highlighted significant concerns regarding various financial irregularities at Hillcrest Secondary School in Nakuru County.

 

A damning report has revealed how some secondary schools are blatantly ignoring existing regulations to engage in financial irregularities.

 

Speaking to The County Champion, parents disclosed that schools are facing serious lapses in accountability and transparency due to unsupported expenses, irregular procurement procedures, and disregard for government regulations.

 

“According to the report, our school has discrepancies, such as unsupported expenditures and missing financial records” one of the parents said.

 

LACK OF A PREQUALIFIED LIST OF SUPPLIERS

 

Review of the procurement procedures for the period under review revealed that the School did not have a prequalified list of suppliers as per the provisions of Section 57(1) of the Public Procurement and Asset Disposal Act, 2015 which requires the head of the procurement function of a procuring entity to maintain and update lists of registered suppliers, contractors and consultants in the categories of goods, works or services according to its procurement needs.

 

FAILURE TO COMPLY WITH PROCUREMENT LAWS AND REGULATIONS

The statement of receipts and payments reflects Kshs.2,581,535 in respect of payments for infrastructure as disclosed in the financial statements.

Review of the supporting payment vouchers provided for audit revealed the following anomalies:-

(i) The School purchased the goods through low value goods procurement method

for goods above the threshold provided for in the Second Schedule of the Public

Procurement and Asset Disposal Regulations, 2020.

>There was no evidence of how the suppliers involved in the supply of labour, goods and services were sourced or identified

> There was no evidence of tender evaluation to confirm deal with eligibility and capability of the bidders as required under Section 46 of the Public Procurement and Asset DisposalAct, 2015.

> Contract agreements were not provided for audit, contrary to the requirements of

Section 135(1) of the Public Procurement and Asset Disposal Act, 2015 which states that 'the existence of a contract shall be confirmed through the signature of a contract document incorporating all agreements between the parties'.

 

> lnspection and acceptance reports on the goods were not provided for audit,contrary to Section a8(1) of the Public Procurement and Asset Disposal Act, 2015 which, states that 'the Accounting Officer of a procuring entity may establish an adhoc committee known as the inspection and Acceptance Committee'.

 

> There was no evidence to confirm that the School conducted its own market survey on prices or results as required by Regulation a3( )(a) of the Public Procurement and Asset Disposal Regulations, 2020, which states that' in making a procurement decision in relation to the market price index in Paragraph (2), the procuring entities shall take into consideration their own market survey prices or results'.

 

UNSUPPORTED ACCOUNTS RECEIVABLES

 

The statement of assets and liabilities reflects accounts receivables balance of Kshs.15,906,785 as disclosed in the financial statements which includes fees arrears of Kshs.15,870,585.

 

The balance of Kshs.15,870,585 is made up of student fee balances of Kshs.12,996,910,110 or 82o/o which have remained outstanding for over one (1) year. Further, Management did not provide debtors listing and aging analysis for audit.

 

In addition, there was no policy on the impairment of long outstanding fees arrears casting doubt on the fair statement of the accounts receivables balance.

In the circumstances, the existence, accuracy, completeness and recoverability of the accounts receivables balance of Kshs.15,906,785 could not be confirmed

 

UNSUPPORTED ACCOUNTS PAYABLES

The statement of assets and liabilities reflects accounts payables balance of Kshs.2,967,223 as disclosed in Note 15 to the financial statements.

 

However, the detailed movement schedule indicating the particulars of creditors, opening balances,purchases and payments during the year to arrive at the closing balance were not provided for audit.

 

In the circumstances, the accuracy and completeness of accounts payables balance of Kshs.2,967,223 could not be confirmed.

 

FAILURE TO CONSTITUTE AN AUDIT COMMITTEE

 

The School has not constituted an Audit Committee as required by Section 61(2) of the Basic Education Act, 2013 which requires board of management of an institution of basic education to establish an audit committee.

 

In the circumstances, the School did not benefit from the oversight role and advice from the Audit Committee.

 

WEAK CONTROLS IN LNVENTORY AND STORES MANAGEMENT

The approved financial reporting template for secondary schools requires a school to disclose its inventories at the close of the financial year under other important disclosures.

However, the disclosure made by Hillcrest Secondary School was incomplete since it did not indicate the value of the inventories as required by the template.

 

Further, the School did not maintain records of stock movement and also conduct a stock take at the close of the year.

 

FAILURE TO TRANSFER LNFRASTRUCTURE FUNDS FROM THE OPERATIONS BANK ACCOUNT

 

The School received operations capitation grants of Kshs.8,850,868 from the Ministry of Education during the year under review.

 

The funds were credited to the School operations bank account. Out of this amount, Kshs.2,841,000 was supposed to be transferred to the School infrastructure bank account for maintenance and improvement of the School's facilities.

 

However, only Kshs.2,106,000 was transferred to the School infrastructure bank account, resulting in un-transferred balance of Kshs.735,000.

 

This was contrary to the Ministry of Education Circular Ref. No. MOE.HQS/3/13/3 dated16 June,2021 which directed that infrastructure grants as well as maintenance and improvement funds should be transferred to the School infrastructure account fifteen (15) days upon receipt of the funds in the operations account.

 

REVENUE COLLECTION SYSTEM (SHARK) WEAKNESSES

 

The School has installed an accounting information system-Shark. Review of the system revealed the following weaknesses: -

>The system could not provide previous years fee balances (ageing analysis)

> The system overstates the current student fee balances by Kshs.4,000

> Receipting had not been automated.The system weaknesses may cause delays in reporting and inaccurate data, resulting to inaccuracies in the financial statements and low efficiency in fees collection.

In the circumstances, the weaknesses in the revenue system may lead to losses in revenue and unreliable data generated through the system.