The Cabinet has directed the Ministry of Education to digitise the sector within 30 days to end fraud and exploitation of parents.
At a meeting chaired by President William Ruto at State House on Wednesday morning, the Cabinet observed that the capitation funds that Government sends to schools must only go to "real children".
The meeting noted that digitisation in the education sector is being sabotaged, and cited the 10,000 national examination candidates government paid for but never turned up for the exams.
President Ruto said: "Resistance to paying fees through e-Citizen is by those who have created parallel bank accounts the way parallel paybills have been set up across the public service."
The Cabinet also resolved that digitisation of services must be extended to technical and vocational education institutions and universities, including at the Higher Education Loans Board.
At the same meeting, the Cabinet was notified that Kenya will host three major conferences this year.
Between February 26 and March 1, the Sixth Session of the United Nations Environment Assembly will be held at the United Nations Environmental Programme headquarters in Nairobi. More than 5,000 delegates have confirmed attendance.
Kenya will also host the Network of Africa Data Protection Authority Conference this year.
In another milestone, Kenya will also host the African Minerals Geo-Science Centre Policy Organ Meetings in Nairobi.
Together with the International Telecommunication Union, Kenya has won the right to host the Global Innovation and Entrepreneurship Centre. The bid was competitive and Kenya won.
In today's meeting, the Cabinet approved the Nairobi Intelligent Transport System Phase 3. This project will include installing intelligent transport system in 125 junctions across the city.
Through the project, 30 intelligent traffic check points and 80 traffic flow detection points will be installed.
The Cabinet also approved the 2024 Budget Policy Statement, the second in the Kenya Kwanza Government. The policy reaffirms the administration's Bottom Up Economic Transformation Agenda priorities.
The meeting also approved the Division of Revenue Bill 2024, County Allocation Revenue Bill 2024, County Governments Additional Allocations Bill 2024 and The Medium Term Debt Management Strategy 2024.