Universities are yet to settle Sh2.028 billion bills owed to suppliers and contractors from the last financial year, raising concerns on their financial health.
The 'Medium Term Expenditure Framework 2019/20–2021/22 report' reveals that the pending bills arose due to delayed release of funds by the exchequer, unforeseen budgetary cuts and late submission of invoices from suppliers.
The funds released in quarterly basis ought to have been disbursed by the close of the 2017/18 financial year that came to an end in June this year. However details from the ministry reveal treasury is yet to release the funds.
The Treasury report reveals the already cash strapped universities not only sit on big debts but also bills following a move to acquire non-income generating assets with no funds readily available to settle the bills.
Property acquired include motor vehicles, ICT infrastructure, teaching and learning equipment, furniture, academic attires, registering of patents, copyrights, and trademarks from research projects.
Moi University in August last year for example acquired two new buses at Sh24 million, Chuka University on the other hand acquired Sh509 million Sasini House in Nairobi among others.
Read:
The outstanding bills risk affecting operations in the already struggling institutions.
University of Nairobi director of communication John Orindi explains such assets are important to ensure smooth running of an institution.
Orindi says the assets acquisition are due to the increasing number of students in the institutions expanding the resources required.
"Non-financial assets are acquired with approval of the treasury," he said adding that this is based on progress and performance thus universities at times acquire the assets as they await funds to pay those who supplied the goods and services.
University and Academic Staff Union (UASU) Constantino Wasonga says the delayed disbursement continue to pose threat that could halt operations in universities as some rely on loans to run.
The 2016/17 auditor general report paints an uncertain future for the institutions revealing the institutions' current assets are less that the liabilities.
"Universities are seriously underfunded and this is just one area. Lack of liquidity forces them to take loans to address the pending bills and debts. The immediate solution is for the government to increase funding to universities as they device ways to have a stable income generating sources," Wasonga told the Star yesterday on phone.
More:
Further debts
Auditor General Edward Ouko in the report raised questions on Kenyatta University’s financial accounts in the 2016/17 financial year.
The university’s current liabilities of Sh3.2 billion exceeded the current assets of Sh1.6 billion that resulted in a negative working capital of Sh1.5 billion.
The university further failed to remit pension and taxes amounting to Sh808,367,887 and other deductions of Sh161,875,694 to the respective beneficiaries, thereby risking fines and penalties.
Jomo Kenyatta University of Agriculture and Technology (JKUAT) was unable to pay creditors and insurance claims worth Sh51,317,415.
At JKUAT, current liabilities of Sh3.9 billion exceeded current assets of Sh2.6 billion, leading to a negative working capital of Sh1.3 billion. The liabilities include money owed to suppliers, loans, grants and bank overdraft.
On the University of Eldoret, Ouko says the transfer of assets worth Sh1,124,982,329 from Moi University to the institution could not be confirmed because no valuation report on the items was forwarded to his office.
It also emerged that Moi University has long outstanding debtors who owe it Sh101,971,356, an amount the university has not managed to recover for three years.
During the period under review, the auditor’s office discovered that a Sh231 million government loan granted to Karatina Campus that is a constituent college of Moi University was still reflecting in its financial books.
More: