Schools drowning in debt as suppliers turn to courts to claim unpaid bills

A growing number of schools are finding themselves in court as suppliers seek payment for goods and services delivered over unpaid bills.

Principals warn that legal disputes are compounding the crisis since once suppliers obtain court judgments, schools face the risk of auctioneers attaching assets, including desks, buses, and laboratory equipment. Such actions, they say, could directly paralyze learning.

Three weeks ago, Watuka Boys High School in Nyeri County saw its bus repossessed over a Sh11.8 million debts.

Parents staged demonstrations after receiving messages that repossessed bus had already been transferred for sale in Nairobi.

They argued that the vehicle, bought through a community harambee, should not have been used as collateral for debts

“We struggled so much to buy this bus. It is unfair for our sacrifice to go to waste,” said one parent during protests outside the school.

The crisis at Watuka began in 2020 when then principal Samuel Donga left behind a debt of Sh7.8 million.

Suppliers, including Salama Millers, which delivered foodstuff worth Sh1 million, filed cases against both the school and Donga. Though Donga made partial payments from his new posting at Moab Boys High, he later stopped, worsening the financial woes. Another supplier, Falfali Company, which delivered COVID-19 equipment, also sued for Sh638,000. A Small Claims Court later reduced the claim to Sh138,000 after questions emerged about the inflated figure.

With enrolment dropping from 468 students to just 43, the school’s future now hangs in the balance. “The government must step in before this institution collapses completely,” said current principal Charles Kuria.

Similar cases are emerging in other counties. In Nyeri, last year suppliers filed over 10 cases at the Small Claims Court, demanding payments from cash-strapped schools.

food supplier moved to court last year demanding Shs 2.1 million owed by a national school for cereals and fresh produce supplied during the pandemic. The school argued that the government’s capitation funds had been delayed, forcing it to accumulate arrears. However, the court ruled that suppliers cannot be made to bear the brunt of budgetary gaps and ordered the school to settle the debt.

In Machakos, the High Court recently upheld a claim by a supplier against a secondary school, after it emerged that goods worth over Sh 1.7 million had been delivered but never fully paid for. The case, which began in 2012, highlighted the reality of how schools are being pushed to the brink by financial shortfalls. While the court trimmed part of the award after finding discrepancies in invoicing, the school was still ordered to pay Sh1.64 million to the supplier.

Again, East Kenya Supplies and Spares sued Mbooni Boys High School over Sh1.45 million. The supplier alleged the school owed money for goods delivered between 2016 and 2017.

However, Chief Magistrate E.H. Keago dismissed the case in 2022, ruling that the supplier lacked sufficient evidence. Principal Dominic Maingi welcomed the decision: “It would have been unlawful for the school to pay fraudulent claims to the detriment of parents who are already struggling.”

In another case, Simecor Merchants 2002 Limited dragged Mbaikini High School to court over a Sh2 million debt for books, stationery, and building materials supplied between 2010 and 2011. Witnesses testified that tenders had been awarded lawfully, and delivery notes signed, strengthening the supplier’s case.

In Kakamega, a uniform supplier filed suit after a school failed to honor payments amounting to Sh800,000, despite parents having already contributed toward part of the cost. The principal admitted in testimony that funds had been diverted to cover electricity, water, and exam-related expenses because the government had not released operating money on time.

Nakuru County saw a surge in lawsuits with last year alone, at least 11 suits were filed at the Small Claims Court by aggrieved suppliers. Njoro Girls Secondary School was sued by Peshmac Enterprises for Sh429,540 after failing to pay for foodstuff delivered in 2020. Lawyer Steve Imbwaga, representing the company, said: “My client gave the school 30 days’ credit, but four years later, not a single payment has been made.”

Molo Secondary School was also taken to court over a Sh748,330 debt owed to supplier Francis Macharia, while AIC Mokoiywet Secondary School was ordered to pay Sh293,000 to Akshar Furniture for desks supplied in 2020.

The mounting debts have sparked frustration among parents and teachers. In Isiolo, for instance, two schools Bulesa Secondary and Merti Muslim Girls Secondary risked losing buses worth Sh10 million after suppliers threatened to tow them away over a Sh3 million debt.

 “This bus was our pride. It’s painful to see it go under auction when the government should have helped,” one parent lamented.

The Kenya Secondary School Heads Association (Kessha) chairman Willy Kuria has repeatedly raised alarm over capitation funds being released late or in inadequate amounts.

“Principals have devised tricks ways of living with the problems in schools. Some are on how hiding away from suppliers who are now camping in schools,” he said.

He said many schools are drowning in debt because of delayed or reduced government funding.

“Day schools are the most affected. When the government delays capitation, principals are forced to borrow supplies on credit. Eventually, suppliers lose patience and take schools to court,” he explained.

The Ministry of Education has acknowledged the delays but insists funds will be released. Education Cabinet Secretary Julius Ogamba recently assured school heads that the Treasury was working to disburse the third-term capitation.

Still, heads of institutions argue that schools cannot continue to run on promises.

“We are reaching out to the government to urgently release long-overdue funds. Our suppliers are taking us to court, and children are the ones suffering when schools cannot operate normally,” said a Nairobi principal, who requested anonymity.

David Okoth, an economist, said: “It is shameful for school administrators to stand trial for debts the government should be settling. Instead of focusing on teaching, principals are hiding from creditors. The government must take education financing seriously.”

Principals insist that the long-term solution lies in timely government funding.

“We cannot keep fighting suppliers in court while classrooms remain underfunded. This is hurting children’s education,” said Kuria.