KU Struggle with Sh6.6bn Debt and Budget Deficits.
Kenyatta University in Kenya is currently facing a severe financial crisis, with new audit findings revealing a negative working capital of Sh6.6 billion.
The university’s budget deficit has risen to Sh2.1 billion as of June 30, 2021, marking an increase of Sh800 million in less than a year.
Furthermore, the audit has uncovered significant financial irregularities, including unremitted statutory deductions and outstanding payments to suppliers and contractors.
Unremitted Statutory Deductions and Staff Contributions:
The audit has revealed that the university has failed to remit statutory deductions amounting to Sh4.9 billion, encompassing pension, NHIF, NSSF, Pay as You Earn (PAYE), and VAT obligations.
In addition, staff contributions to various institutions, such as sacco remittances, welfare, insurance, cooperative, and staff loans, have also been neglected, with over Sh421 million yet to be remitted.
Outstanding Payments and Stalled Projects:
Kenyatta University has also been unable to fulfill its financial commitments to general suppliers and contractors, with an outstanding amount of Sh505.7 million.
Some of these payments have remained unpaid for an extended period. Furthermore, the audit has identified stalled projects worth Sh616 million, which have remained inactive for over a year.
The completion dates for these projects are uncertain, making it impossible to confirm whether value for money has been achieved.
Dire Financial Status and Loss-Making Operations:
The university’s liabilities stand at Sh7.5 billion, while its assets amount to Sh838 million, illustrating the dire financial situation.
The auditor general has raised concerns about loss-making operations in the university’s catering business and the North Coast Beach Hotel.
Additionally, irregularities have been identified regarding the employment status of staff at the hospitality facility, with expired contracts and unclear explanations for their continued employment.
Unsupported Expenses and Lack of Transparency:
The audit has also flagged unsupported expenses of over Sh100 million, including questionable expenditures on regional learning, stationery, health unit drugs, office consumables, examination stationary, and imprests for researchers.
The lack of proper documentation and explanations raises doubts about the accuracy and completeness of the university’s financial operations.
KU Struggle with Sh6.6bn Debt and Budget Deficits.
