By Miraj Guo
April 6, 2026
The Teachers Service Commission (TSC) is facing an unprecedented financial crisis, with Auditor General Nancy Gathungu warning that the country’s largest employer is now technically insolvent.
In a damning audit report for the financial year ending June 30, 2025, the Auditor General revealed that the Commission is struggling to meet its short-term financial obligations, casting a dark shadow over its ability to continue as a “going concern.”
The report highlights a widening deficit that has left the TSC unable to fund critical operations, including the promotion of over 200,000 teachers and the recruitment of nearly 100,000 additional staff needed to plug a massive national shortage, particularly in Junior Secondary Schools.
“The Commission’s survival is in doubt,” Gathungu warned, pointing to a balance sheet where liabilities have significantly outpaced assets.
Adding to the turmoil, the audit unearthed a Sh7.9 billion financial hole, partly attributed to massive payroll irregularities. Investigators discovered that approximately Sh446 million was paid out to “ghost workers”—teachers who had died, resigned, or absconded from duty. While the Commission has managed to recover about Sh222 million, the remaining losses continue to drain its dwindling resources.
The insolvency crisis comes at a precarious time as the TSC enters negotiations for the 2025–2029 Collective Bargaining Agreement (CBA). With teachers demanding salary increments of up to 32%, the Commission’s empty coffers suggest a looming stalemate that could disrupt the national education calendar.
Legislators have now called for a full forensic audit of the TSC’s manual payroll systems to stem further losses as the government scrambles to find a bailout plan for the embattled agency.
