Seven universities cannot account for huge sums of money, Auditor General General Edward Ouko says in a report highlighting widespread financial mismanagement.
In his 2016-17 report, Ouko flagged many suspicious transactions. He cited missing crucial transaction records, unexplained expenditures, violation of procurement regulations, unsurrendered imprest and abandoned projects.
The audited universities unable to explain major spending include Maseno University, Kenyatta University, Kabianga University, the University of Eldoret, Multimedia University, Moi University and the Cooperative University of Kenya.
At Moi University, the audit report says the institution could not account for Sh25,476,385, which it claimed was advanced to its officers as imprest.
The university also could not explain why it has not recovered the unsurrendered imprest. Records show it was to be surrendered by the end of June 2017.
The report indicates the university paid Sh4,818,280 to construct the main gate, which was half-done. “Physical verification of the project revealed the project is incomplete and the contractor has abandoned the project after being paid the full contract sum,” the report shows.
Available information indicates the gate is only 60 per cent complete, the report says. The management explained there were omissions in the bill of quantities and the structural drawings. The stalled gate project started on January 23, 2017, and was projected to last 16 months.
At Maseno University, Ouko flagged what appears to be a systematic breach of Public Procurement and Disposal Regulations, raising questions whether the university obtained value for money in a number of transactions.
For instance, the university spent Sh11,768,240 to buy a 67-seater bus through restricted tendering. Only six suppliers were invited to apply, as opposed a minimum of 10 required by PPDR.
The university also breached the procurement law when it directly purchased a Sh6,235,279 ambulance without competitive tendering.
Ouko’s report also revealed that Maseno University has not complied with Section 143 of the Public Finance Management Regulations 2015. The regulations require all government agencies to provide detailed fixed-asset registers, indicating value, date of acquisition, description and location of assets in its possession.
“In the absence of the register, the accuracy, existence and ownership by the university of assets valued at Sh2,305,562,999 reported under property, plant and equipment cannot be confirmed,” the report says.
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At Kenyatta University, the auditor found “no structures in place” to recover Sh518 million incurred in establishing the Arusha and Kigali campuses.
The institution was also unable to meet its financial obligation. It recorded a deficit of Sh43.4 million, with current liabilities of Sh3.2 billion and current assets of Sh1.6 billion. The university was unable to remit pension and taxes amounting to Sh808 million and other deductions of Sh161 million to beneficiaries, thereby risking fines and penalties.
The auditor’s reports on universities were tabled by National Assembly Majority leader Aden Duale last week.
The Auditor General found similar problems of unsupported transactions at Multimedia University. It incurred unapproved expenditure amounting to Sh11,822,952. The transactions were purchase of computers, which was approved at Sh13,000,000. But the university went ahead to spend Sh24,822,952.
At the University of Eldoret, the institution lost Sh10,661,304 when it allowed 156 students to graduate without paying all fees. This was contrary to the institution’s own fee policy of 2014, which states that students with fees balance may be excluded from the graduation list
The university also could not account for Sh6,816,905 it claimed to have issued as imprest more than two years ago to students undertaking research.
Ouko’s report also said the university violated the ‘third net’ salary rule provided for in Section 19 ( 3 ) of the Employment Act, 2007.
“Audit review of the university payroll revealed some officers in various departments earned less than a third of their respective basic salaries. The university management is therefore in contravention of the law,” the report says.
At the Cooperative University of Kenya, Ouko’s report found that current liabilities of Sh231,157,032 exceeded current assets of Sh163,387,717. This has resulted in a negative working capital of Sh67,769,315.
“In particular, the university was unable to pay trade payables and payroll liabilities of Sh65,724,699 and Sh55,348,680, respectively, to the beneficiaries, thereby risking fines and penalties,” the auditor says.
At Kabianga University, Ouko pointed to a possible escalation of the Sh1,075,100 Pineapple Plant Project.
This was due to delays in installing equipment, which the institution blamed on conflict between the contractors and lack of power.
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