Education creates a platform upon which economic, social and political prosperity of any nation is founded. Investment in education can help bring about economic growth, improve productivity, contribute to social and national development and lead to reduction in social inequality. This study was therefore to affirm the above sentiments by confirming whether physical resources in any way relate to internal efficiency in secondary schools of Tana River County. The study specifically sought to establish the relationship between physical resources and internal efficiency of public secondary schools in Tana River County in terms of number of classrooms, laboratories, textbooks, furniture, toilets/latrines, and electricity among others. The research particularly sought to determine the magnitude of inefficiency in form of dropout, repetition, and completion and aimed at providing possible solutions in relation to physical resources to minimize wastage in secondary schools and establish corrective measures that can minimize dropouts and repetition. The study was guided by the cost benefit analysis theory which aims at achieving optimal output. This theory stresses that the out-put of any investment should be correlated with the in-put in order to assess profitability. The objectives of the study were to assess the adequacy of physical resources in development and enhancing internal efficiency in public secondary schools, to find out the relationship between physical resources and dropout rate, to examine the relationship between physical resources and  repetition rate of public secondary schools in Tana river County, to find the relationship between physical resources and completion rate and finally to develop complimentary policies and interventions related to physical resources that can reduce wastage in public secondary schools of Tana river County. The study was conducted using a descriptive survey and correlation research designs and the data was collected using questionnaires, interview guide and documentary analysis from 15 secondary schools which were visited by the researcher; 1 County Director of Education, 3 District Education officers, 15 Principals and 30 teachers were contacted with the Principals being purposively selected and teachers selected randomly from the accessible population. Data generated was analyzed both qualitatively and quantitatively. Qualitative data from interview schedule and questionnaires was analyzed thematically based on research objectives. Data from documents analysis and numerical data generated from interview schedules with key informants was analyzed using mean, frequency counts and percentages. Chi-square test was used to establish relationships between physical resources, dropout, repetition, and completion rates. On the first objective, the study found out that school in Tana River County had inadequate physical resources and that those available were in poor condition. On objective two the study found out that there was no relationship between dropout rates and condition of physical resources. On objective three and four the study found out that there was Positive significant relationship between repetition, completion rates and condition of physical resources. The research also revealed that the secondary education system in Tana River County as at the period of study was inefficient with a mean dropout rate of 16.0.On the basis of findings, the study concluded that physical resources are positively correlated with internal efficiency of public secondary schools in Tana river County. It was therefore recommended that for realization of internal efficiency, there was need to equip schools in Tana River County with the necessary physical resources, adequate mechanisms and procedures for ensuring retention and high completion rates in schools. Finally, the researcher suggested that schools should be given funds directly for them to have a chance of prioritizing and acquiring essential physical resources based on their specific needs.