The Auditor General of Kenya has revealed a substantial funding crisis in the public education sector, highlighting a shortfall of 117 billion Kenyan shillings in capitation funds over the past four financial years. Secondary schools are the most affected, with a deficit of 71 billion shillings, followed by junior high schools at 31 billion and primary schools at 14 billion. The audit also uncovered fraudulent activities involving 33 ghost schools, which received billions of shillings despite having no physical infrastructure. Specifically, 14 non-existent schools were found to have received approximately 16.68 million shillings. The Auditor General criticized the flawed criteria used for capitation allocation and warned that the underfunding threatens Kenya's future human capital development. More than 163,000 students have been left without loans due to funding gaps. In response, Treasury Cabinet Secretary John Mbadi acknowledged the government's inability to sustain the current capitation rate of 22,000 shillings per pupil, though he later stated he was misquoted and assured that funds would be made available. The government denied plans to suspend free basic education funding, with Education Cabinet Secretary Ogamba reaffirming the commitment to fully fund free education despite budget constraints. However, secondary school heads have warned that parents might be forced to pay up to 7,800 shillings annually to keep children in public schools if funding shortfalls persist. Meanwhile, the government has announced a reduction in university fees across all public universities, effective September 1, 2025, providing relief to students amid the broader education funding challenges. University staff have cautioned that delayed or inadequate capitation disbursements could lead to severe cash shortages in higher education institutions.