Public universities' debt hits Sh76.1 billion, raising sustainability concerns - Auditor General
The audit covering 42 universities found that Sh10.96 billion of the debt is long-term, while Sh68.4 billion represents current liabilities.
Debt among public universities in Kenya rose sharply to Sh76.1 billion by June 2024, marking a 10.4 per cent increase from Sh68.9 billion the previous year.
Auditor General Nancy Gathungu’s latest report shows that this steady growth over four years raises concerns over the ability of these institutions to sustain their operations and meet financial obligations.
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The audit covering 42 universities found that Sh10.96 billion of the debt is long-term, while Sh68.4 billion represents current liabilities.
“Current liabilities reported by public universities have been increasing steadily over the years. This continued growth suggests that institutions are consistently failing to meet their short-term obligations, including trade payables, statutory deductions, and other operational expenses,” Gathungu wrote.
“As a result, concerns arise regarding the financial sustainability of academic and administrative services offered by the institutions.”
Seventeen universities were found with unpaid statutory deductions totalling Sh29.6 billion.
These included outstanding Pay As You Earn (PAYE) taxes, pension contributions, withholding taxes, and other payroll obligations. Another thirteen universities had overdue payments totalling Sh8.5 billion, largely owed to vendors, part-time lecturers, contractors, and staff claims, some dating back to 2008.
The auditor noted that seven of the 17 universities with unremitted statutory contributions failed to disclose accrued penalties or provide evidence of repayment plans, a violation of statutory requirements.
Under the Retirement Benefits Act, institutions face penalties of five per cent of unremitted contributions or Sh20,000, whichever is higher, along with full payment of contributions and accrued interest.
Employers must also remit PAYE by the ninth day of the following month, with non-compliance attracting penalties of 5 per cent, interest of 1 per cent per month, and fines for late filing.
The audit further revealed that six universities ran operating deficits totalling Sh3.2 billion, meaning they spent more than they earned.
These include Moi University (Sh1.2 billion), Jomo Kenyatta University of Agriculture and Technology (Sh916.7 million), Technical University of Kenya (Sh877.97 million), Technical University of Mombasa (Sh141 million), University of Eldoret (Sh57.7 million), and University of Kabianga (Sh4.7 million).
“This reflects ongoing financial strain and poses a risk to the sustainability of essential services. The shortfalls also indicate structural weaknesses in revenue generation and expenditure management,” Gathungu observed, underscoring the urgent need for improved fiscal oversight in public universities.
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