This study examined the impact of external funding and resource allocation on the implementation of education policies and the delivery of quality education in the Palorinya Refugee Settlement in Uganda. The research utilized a mixed-methods approach, combining qualitative interviews with education stakeholders, surveys with teachers and students, and document analysis of funding reports. Findings revealed that external funding significantly contributed to improving educational infrastructure, providing learning materials, and enhancing teacher training programs. However, issues such as delayed disbursement of funds, misalignment between allocated resources and local needs, and inadequate monitoring mechanisms hindered the effective implementation of education policies. The study found that while external funding increased the availability of educational resources, it was insufficiently aligned with the settlement’s specific educational needs, leading to disparities in educational quality across different schools within the settlement. The conclusion of the study was that although external funding played a crucial role in the education system in Palorinya, resource allocation must be more strategically managed to enhance the long-term sustainability and effectiveness of education interventions. Moreover, education policies should integrate more community participation and be adapted to the evolving needs of refugees. There should be improvement on the efficiency of resource allocation to ensure that funds are directed toward the most pressing needs.