Taita Taveta University faces insolvency amid severe financial crisis

Taita Taveta University is grappling with severe financial difficulties that threaten to disrupt its ability to offer essential services.

A new report by Auditor General Nancy Gathungu for the financial year ending June 2023 reveals that the institution is technically insolvent and struggling to meet its financial obligations.

The report indicates that the university's liabilities currently exceed its assets, creating a financial crisis.

According to the statement of financial position, Taita Taveta University's current liabilities total Sh301.19 million, surpassing its current assets of Sh79.63 million, resulting in a negative working capital of Sh221.55 million. The institution reported a deficit of Sh65.45 million for the year ending June 30, 2023.

"This is an indication of the existence of material uncertainty which may cast significant doubt on the university's ability to sustain its services and to meet its financial obligations as and when they fall due," said Gathungu, pointing out the serious financial strain on the institution.

The financial struggles at Taita Taveta University come amid broader challenges facing public universities in Kenya.

New university funding model

The Kenya Kwanza Government has introduced a controversial university funding model aimed at addressing these financial woes.

Last year, President William Ruto stated that vice-chancellors had confirmed that the new funding model would work within three years to resolve the financial difficulties faced by universities.

A report by the Controller of the Budget revealed that public universities in Kenya had accumulated pending bills of Sh62 billion as of February 2023.

Kenyatta University topped the list with Sh11.7 billion in pending bills, followed by the Technical University of Kenya with Sh8.2 billion and Jomo Kenyatta University of Agriculture and Technology with Sh8.1 billion.

In Taita Taveta University's case, the financial problems have led to stalled projects worth Ksh. 503.07 million.

These include the construction of an administration block at the main campus, which began in October 2017 at a cost of Sh345.57 million. The project, which was supposed to be completed by December 2018, remains only 80 per cent finished.

Other delayed or stalled projects include the construction of a Mines, Fuel, and Mineral Processing Laboratory Phase III, worth Sh98.85 million, a water treatment plant and dairy shed valued at Sh3.59 million, and the construction of a two-classroom block.

"In the circumstances, value for money had not been realised from these projects," the report states, highlighting the financial inefficiency and mismanagement at the university.

Additionally, the Auditor General's report raised concerns over staff recruitment at Taita Taveta University.

It was noted that the university's hiring practices reflected an ethnic imbalance, with 87 out of 237 employees (or 37 per cent) coming from the dominant ethnic community in the county.

This imbalance has raised questions about the fairness and inclusivity of the institution's staffing process.