Audit reveals universities struggling with fee collection, financial mismanagement

A report by Auditor General Nancy Gathungu has revealed that several universities are on the brink of collapse due to their inability to meet key financial obligations.

The audit, covering the year ending June 2023, paints a dire picture of the state of the institutions, highlighting issues such as fee collection anomalies, unremitted statutory deductions, and stalled projects.

Among the universities mentioned in the report include the University of Nairobi, Kenyatta University, Moi University, Rongo University, Maseno University, Garissa University, Egerton University, Taita Taveta University, and Kabianga University.

One of the most critical findings concerns the University of Nairobi, where the Auditor General expressed doubt about the institution's continued survival.

“The university's liabilities exceed its assets, casting uncertainty on its future,” Gathungu said in the report.

The report also points out that many of the institutions have disproportionately employed staff from a single ethnic community.

Anomalies

Additionally, the audit flagged anomalies in the university's fee collection system.

According to Gathungu, a review of records revealed that 844 students with outstanding balances totalling Sh80.99 million were invoiced before clearing their fee arrears.

“This practice contradicts the university's fee policy, which mandates that students must settle their balances five weeks before the start of a new semester, or within 13 weeks if paying in instalments,” she said.

The audit also highlighted discrepancies in the university's Student Management Information System (SMIS).

She noted that there were 2,888 gaps in the receipt number sequence for the financial year 2022/23, adding that invoice data for Module I and II students showed numerous gaps in invoice IDs.

The financial woes extend to the university's Income Generating Units (IGUs), many of which reported significant losses.

For instance, the Faculty of Arts and Social Sciences earned only Sh214,856 against expenditures of Sh2.8 million, while the Faculty of Health Science posted a deficit of Sh19.4 million, receiving Sh1.8 million against expenses totalling Sh37.2 million.

Other faculties, such as the Faculty of Science and Technology and the Faculty of Diagnostic Radiology, are also grappling with deficits.

The Faculty of Science and Technology received Sh6.9 million but spent Sh11 million, resulting in a deficit of Sh4 million. Similarly, the Faculty of Diagnostic Radiology earned Sh2.7 million but recorded expenses of the same amount, leaving no room for surplus.