Why giant universities are facing financial nightmare : The Standard

Three public universities are staring at stubborn financial crunch that could paralyse their normal operations and even jeopardise their academic standards. A recent report by the Auditor General which was tabled in Parliament revealed that Kenyatta University, the University of Nairobi and Multimedia University are jointly operating in a debt of Sh4.6 billion. The report indicates that in the June 2018 fiscal year, the three academic institutions failed to channel employees’ remittance to various government institutions such as Kenya Revenue Authority, National Social Security Fund (NSSF) and National Health Insurance Fund (NHIF). According to the audit report, UON, KU and Multimedia have attributed debt to the reduction in student enrolment for Module II (parallel) courses, Ministry of Education failing to disburse funds on time, strikes by staff members and tension during the 2017 General Election.

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The universities asserted that industrial strikes and political tension interfered with their abilities to generate internal revenue hence the slip into the red line. “The university was therefore unable to meet its financial obligations as and when they fell due,” said the Auditor General before National Assembly, after analysing UON’s financial situation. The UON sank into Sh1.4 billion debt hole after setting a projected revenue of Sh2 billion which it failed to meet. This money arose from staff payment deductions such as Sh282.7 million for PAYE, Sh3.4 million for NSSF, Sh10.8 million for NHIF, Sh828,387 million for HELB and Sh204.1 million Sacco deductions. Kenyatta University on the other hand registered a debt of Sh3.4 billion, where it has Sh1.2 billion deficits. KU has Sh1.8 billion due pension to be paid, audit fees of Sh3.4 million and Sh204 million extra bills yet to be paid.

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Multimedia has a debt of Sh700 million where it workers ‘deductions of Sh574.8 million are yet to be paid, as well as Sh242.9 million of pensions and taxes and gratuity of Sh331.9 million. KU’s maybe poised for a slight relief thanks to the 2019 students’ intake where it will receive second largest number 5, 650 after Moi University with 5, 826. UON will come third with 5, 550 intake of students. On Monday, Education Cabinet Secretary George Magoha offered a rather discouraging news to the heads of the institutions. Magoha told the university heads during a conference in Nairobi that they should not expect money from the government to offset the deficits.

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Related Topics

Auditor GeneralParliamentUONKUMultimediaDebts