Kenya's public education sector is facing a severe funding crisis, with an underfunding gap of 117 billion Kenyan shillings over the past four financial years, according to the Auditor General. Secondary schools are the most affected, suffering a shortfall of 71 billion shillings, followed by junior high and primary schools with 31 billion and 14 billion shillings respectively. The Auditor General's report also uncovered fraud involving ghost schools, revealing that 33 non-existent schools received billions of shillings in capitation funds, including 16.68 million shillings disbursed to 14 fake schools with no infrastructure. This misallocation has contributed to the financial strain on the education sector. Additionally, the Higher Education Loans Board (HELB) reported a funding shortfall of 13.7 billion shillings for the fiscal year 2024/25, resulting in over 163,000 eligible students missing out on loans. Despite receiving 713,173 loan applications, HELB could only fund 322,338 students. The education sector is also grappling with shortages of nearly 100,000 teachers and inadequate infrastructure, with approximately 1,600 schools operating without laboratories. These challenges have led to deteriorating conditions in public secondary schools, where students are skipping meals, teachers are being sent home, and principals are using personal funds to sustain operations. The Auditor General has highlighted flaws in the criteria used for capitation allocation, raising concerns about the future of Kenya's human capital development.