Auditor General Edward Ouko has revealed that three universities are drowning in debt and have spent workers’ statutory deductions including Sacco deductions, NHIF and NSSF.
According to reports by Ouko, the varsities include the University of Nairobi, Kenya’s higher education giant, Kenyatta University and Multimedia University.
During the 2017-18 financial year, Kenyatta University reported the highest debt at Ksh3.4 billion, followed by UoN at Ksh1.4 billion and Multimedia at Ksh700 million as at June 2018.
The audit report indicates that MMU was unable to remit workers’ deductions totalling Sh574.8 million. These are pensions, gratuity, and taxes of Ksh242.9 million and Ksh331.9 million, respectively.
UoN failed to remit PAYE of Ksh283 million, National Social Security Fund deductions of Ksh3.4 million and National Hospital Insurance Fund deductions of Sh10.8 million. It also failed to submit pension contributions of Ksh1.5 billion, sacco deductions of Ksh204 million and Helb deductions of Ksh828,387.
KU was unable to remit taxes and pension contributions amounting to Ksh1.8 billion; audit fees of Ksh3.4 million and other deductions of Ksh204 million to beneficiaries.
The Auditor General warned that the universities’ continued operation was “a growing concern” as they now depend entirely on creditors, banks and the government.
Furthermore, as a result of the non-remittance of statutory deductions, staff members of the universities have been subjected to fines and penalties.
Workers are also likely to be denied health services because their NHIF payments are not forwarded to the agency.
During the Higher Education conference in Nairobi on Monday, Education Cabinet Secretary George Magoha proposed a raft of cost-saving measures in the universities including the reduction of staff, especially in non-essential roles, to reduce the varsities’ wage bill.
He also proposed that some of the country’s 74 universities be merged to free funds for academic projects, as well as the merger of courses and an increase in fees.
