KMTC leadership questioned over Sh2.1 billion pension gap, unresolved debts

Kenya Medical Training College (KMTC) leadership is once again at the centre of a long list of unresolved financial and governance concerns after appearing before the National Assembly Public Investments Committee on Social Services, Administration and Agriculture.

The college was questioned on Monday over a growing pension gap, uncollected rent, debts that have been pending for years and slow progress in formalising campuses across the country. The committee was reviewing audit reports from the 2021/2022 and 2023/2024 financial years.

The session, led by Vice-Chairperson Caleb Amisi, painted a picture of an institution still struggling to overcome recurring issues that legislators said have been raised many times before. Members complained that despite repeated warnings, the same matters continue to appear in audit findings without any clear end in sight.

“These issues are routine, and we must conclude them once and for all,” Amisi told KMTC managers, saying the committee will bring in various government institutions, among them Kenyatta National Hospital (KNH), the University of Nairobi (UoN), the Attorney-General’s Office, the Ministry of Health, the Ministry of Education, the Ministry of Lands and the National Land Commission (NLC), to help settle the unresolved cases.

One of the most persistent disputes involves Sh7.4 million in rent arrears from the University of Nairobi for 96 rooms occupied by medical students.

KMTC explained that an eviction notice issued in July 2018 has never been honoured. The college said the matter has now been sent to the Attorney-General and the Head of Public Service, and available documents show that the buildings belong to KMTC.

The Committee was also told that debts of Sh21.8 million owed by KNH and Sh19.8 million owed by the former Ministry of Medical Services had been recommended for write-off, but cannot be cleared without Treasury approval. KMTC said it is still waiting for guidance.

The pension scheme dominated the discussion, with the college reporting a Sh2.125 billion deficit as of June 2024.

CEO Kelly Oluoch said actuarial reviews showed the fund’s assets are not adequate to meet what is owed to current and future retirees.

“While pension benefits for current retirees are protected by law, we’ve had to finance remedial measures from student fees,” he said, adding that depending on student money could lead to cash flow pressure if the Treasury does not intervene.

To improve the scheme, KMTC raised its sponsor contribution rate from 20 per cent to 27.6 per cent starting July 2024 and committed to injecting Sh100 million into the fund every year. The committee said it would also invite the Retirement Benefits Authority and the National Treasury to review the wider challenges facing public pension schemes.

Another concern was that only a fraction of KMTC’s campuses have been legally gazetted. Out of its many centres across the country, only 16 campuses, four hospital maintenance schools, and one school of clinical medicine have completed the gazettement process. The college said learning was continuing normally and promised to fast-track the remaining approvals.

The Auditor-General also reported that KMTC exceeded the maximum of six board meetings allowed in a year. The management said the additional meetings were linked to statutory duties and graduation arrangements, but the committee insisted the law must still be followed.

MPs further questioned the high number of staff earning below the one-third net pay limit due to steep statutory deductions.

KMTC said many employees took loans before the introduction of the Housing Levy, SHIF and NSSF adjustments, making it difficult for them to restructure repayments. Members noted that it may be unrealistic to expect workers to renegotiate loans during tough economic times.

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On employment, the college is still below the 5 per cent requirement for persons with disabilities. Only 52 of its 2,131 employees fall in this category. KMTC said it wants to work with NG-CDF offices to strengthen recruitment and meet the legal threshold.

For the 2023/2024 financial year, KMTC reported under-collection of Sh102 million and underspending of Sh993 million, though it maintained that this did not affect service delivery.

Amisi said the college remains important to Kenya’s ambition to develop medical tourism.

“If we improve institutions like this one, they can put us in good standing to become a medical tourist destination,” he said, adding that the committee will continue supporting efforts to resolve old audit questions and update legal frameworks.