3 Broke Universities survive on imprudent tactics–Auditor Gen

Kenya’s giant parastatals and state corporations are in a loss-making spree that was started by Kenya Airways after posting Ksh. 27B loss in the financial year 2017/18.

Three key universities join the insolvency league, operating on bank overdrafts and failing to remit billions in employees’ statutory deductions including loans as revealed by the Auditor General.

Reports by Auditor General Edward Ouko show that the University of Nairobi, UON, is drowning in massive debt. As are Kenyatta University, KU and Multimedia University.

During the 2017-18 FY, UON, KU and Multimedia University alone reported a negative working capital of Sh5.5 billion.

KU recorded the highest debt at Sh3.4 billion, followed by UoN at Sh1.4 billion and  Multimedia at Sh700 million as at June 2018.

According to Mr Ouko, UON, KU and Multimedia are holding onto workers deductions totaling to Sh4.6 billion.

The revelations came as Education Cabinet Secretary George Magoha has proposed that some of the country’s 74 universities be merged to free funds for academic projects.

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He has proposed a raft of cost-saving measures, including the reduction of staff, especially in non-essential roles,  to reduce the varsities’ wage bill.

UoN has attributed its poor financial health to the decline in capitation from the Education ministry, the decline in student enrollment, strikes by academic staff and disruptions during the 2017 presidential elections.

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The reduction of university cutoff points to C-plus for government-sponsored students has eliminated the self-sponsorship programmes that have been varsities’ cash cow.

It has also rendered useless the tens of university campuses that had been opened to accommodate the swelling numbers of self-sponsored students.

The cash flow crisis is not unique to the three universities as many others have closed satellite campuses after failing to meet the cost of operation.

Campuses have been closed by Moi University, Jomo Kenyatta University of Agriculture and Technology, Kenya Methodist University, the Catholic University of East Africa, Kisii University, Laikipia University, Kabarak University, South Eastern University, Cooperative University and the University of Baraton.


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