Thousands of school principals could soon be required to finance their professional association directly after the Auditor-General questioned the use of public school funds to pay subscriptions to the Kenya Secondary School Heads' Association (Kessha).
The audit findings have put the spotlight on payments running into millions of shillings made by public secondary schools to the organisation, with records showing that several institutions transferred more than Sh1 million during the period examined.
Auditor-General Nancy Gathungu has said the expenditure is irregular because Kessha is a welfare body whose members are school principals. In her view, subscriptions to the association should be paid by the principals themselves from their salaries rather than from funds held by public schools.
The concern has been raised in audit reports covering several institutions, suggesting that the practice is widespread among public secondary schools.
Mang'u High School, for instance, transferred Sh2.77 million to Kessha, while Alliance High School paid Sh2,125,550. Moi Forces Academy transferred Sh2,052,800, with Moi Girls Secondary School, Kamanungu, paying Sh1.82 million.
St Mary's School, Yala, transferred Sh1,523,640, while Alliance Girls High School paid Sh1.42 million.
Other payments included Sh1,070,955 from Chania High School, Sh1,023,820 from Utumishi Academy and Sh996,800 from Nairobi School.
Starehe Boys' Centre and School recorded a payment of Sh66,500, among the lowest amounts cited in the audit records.
The scale of the transfers has raised questions over the amount Kessha receives from schools each year. With more than 7,000 principals associated with the organisation and some schools paying hundreds of thousands or millions of shillings, the total collections could run into hundreds of millions of shillings and potentially exceed Sh1 billion.
Gathungu has questioned whether public schools should be making such payments to an organisation that is outside the government's funding structure.
In her audit of Mang'u High School for the financial year ended June 2025, she said there was no assurance that Kessha had the financial controls required to handle money transferred from public institutions.
"The organisation is not defined in the 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," said the Auditor-General in her report for the financial year ended. June 2025 on Mang'u High.
The Auditor-General also cited Regulation 23(2)(c) of the Public Finance Management (National Government) Regulations, 2015, saying the provision was not followed.
The regulation requires an accounting officer transferring public funds to another entity to first obtain written assurance that the organisation receiving the money has effective, efficient and transparent financial management and internal control systems.
The finding could have a direct impact on Kessha's operations because principals may have to make individual payments to keep the association running if schools are no longer allowed to transfer money on their behalf.
Kessha chairperson Willie Kuria, who is also the Principal of Murang'a High School, did not respond to questions from the Nation on the audit findings and how the association plans to address them.
Kuria has, however, previously defended the payments, saying they are contributions made by members and are used to meet the organisation's operational costs.
"Kessha is a registered association and members contribute Sh500 every month to run the association. What comes there is money for activities and there's no other way other than to put money in that clearance account," Mr Kuria said in a past interview.
The stated contribution has also raised questions about the difference between the monthly subscription and the much larger amounts appearing in individual school accounts.
A contribution of Sh500 per month amounts to Sh6,000 a year for each member. If the association has about 7,000 members, the annual collections would be approximately Sh42 million, equivalent to about Sh3.5 million each month.
That amount is far below the sums reflected in some of the school financial statements, where individual institutions recorded transfers of more than Sh1 million.
Kessha says it is a professional organisation representing about 7,000 principals from public and private secondary schools across Kenya. It was established in the late 1960s and its main purpose is to provide professional advice and support to school heads in all 47 counties.
The audit questions come at a time when public schools are under extensive financial oversight because of the large sums they receive and manage.
Article 229 of the 2010 Constitution established an independent Office of the Auditor-General with the responsibility of auditing public entities that receive taxpayers' money and submitting its findings to Parliament.
Public secondary schools fall under this oversight because they receive government funding through the Free Day Secondary Education capitation programme.
They also handle approved boarding charges and other authorised levies, making proper accounting for the money a requirement for school management.
Schools are therefore required to prepare annual financial statements which are subjected to audit to determine whether public resources have been spent lawfully and effectively.
The Kessha payments are among several financial management concerns contained in the latest audit reports on public secondary schools.
The Auditor-General has also identified unsupported expenditure, questionable procurement practices, unapproved charges imposed on parents and delays in submitting financial statements.
Other concerns include procurement units that are not operational, incorrect student enrolment figures that can affect capitation, poor management of school assets and failure to prepare school improvement plans.
Some institutions were also found not to be complying with the Data Protection Act and the Public Procurement and Asset Disposal Act.
The findings now place Kessha's funding arrangements under scrutiny, with the association potentially having to find a new way of collecting and managing subscriptions if public schools are barred from using their funds to make payments on behalf of principals.