This comes on the backdrop of a strong push by Parliament to terminate a 2016 policy that allowed government sponsored students to be placed in private universities.
In a new special report, Auditor General Nancy Gathungu wants 15 private universities to refund Sh219 million for students who were not placed by the Kenya Universities and Colleges Central Placement Service.
KUCCPS is mandated by law to place Form 4 graduates in universities and colleges.
According to the auditor's report, the private universities received Sh201 million for 4,521 government sponsored students.
However, these students were not placed by KUCCPS.
“The audit reveals that funds amounting to Sh201, 638,928 were disbursed to four thousand five hundred twenty-one (4,521) who are non bona fide GSS students in the private universities as they were not placed by KUCCPS,” the report states.
Gathungu now wants the private institutions to refund the taxpayers’ millions, terming the payment irregular.
“The private universities should refund Sh201,671,080 spent on students funded under GSS not placed by KUCCPS,” Gathungu recommended.
According to the audit, Africa Nazarene University will refund Sh47 million for the 1,042 students who were not placed by KUCCPS.
Daystar University will repay Sh57 million while KCA will refund Sh38,662,479.
Kisumu-based Great Lakes University will return Sh3, 745,653, Kabarak (Sh550, 312), International Leadership University (Sh128,329), Kemu (Sh3,087,704), Lukenya (Sh8,083,387), Marist (Sh409,593), Mount Kenya University (Sh1, 675, 263), MUA (Sh2,289,185) and Pioneer (Sh515, 374).
Gathungu wants Scott University compelled to refund Sh3, 325, 662, St Paul’s (Sh12, 312, 650) and Umma (Sh22, 242, 518).
The amounts include Sh162.3 million the government claimed it gave to the universities but which they did not receive.
Also included in the Sh883 million under investigation is Sh412.7 million paid for students for periods exceeding duration of academic programmes.
According to the report, some 9,489 students were enrolled in the 32 private universities in the country for periods exceeding the duration of their academic programmes.
“Funds amounting to Sh412, 729, 628 had been disbursed on account of the students for the excessive period,” Gathungu says in her report.
The revelations contained in a special audit expose systematic weaknesses in the management of capitation funds disbursed to private universities that the auditor indicates resulted in the loss of public funds.
The auditor also queried the Sh53.5 million spent on students who had long deferred their studies and Sh17.7 million duplicated disbursements.
“The special audit established that a total of Sh53, 594, 194 was granted to 1,116 students who had either deferred and/or were on long academic leave. This was an indication that funds were released during the students’ absence,” the audit indicated.
“A total of Sh35, 199, 064 was irregularly disbursed on account of seven hundred and eighty-eight (788) students who had already graduated from the universities.”
The report further revealed that Sh35 million capitation was irregularly channeled to graduated students in eight universities during the period under review.
“In the circumstances, the eight private universities may have been overpaid by Sh35, 199, 064 disbursed for students who had already completed their studies and graduated,” the report indicates.
The explosive special report was tabled before the National Assembly’s Public Investment Committee on Governance and Education.
The committee is chaired by Bumula MP Wamboka Wanami.
The special report covers between 2016-17 to 2022-23 financial years when the government funded learners in private universities.
The policy programme was introduced in 2016 as part of the government's strategy to ensure that students who scored the university minimum entry grade of C plus are absorbed and funded by the state.
The Wanami-led committee will from next week embark on discussion of the special report that exposes serious irregularities in the funding of private students.
The committee will meet Education Cabinet Secretary Ezakiel Machogu, Higher Education PS Beatrice Inyangala and KUCCPS CEO Agnes Wahome to shed light on the irregularities.
“We will also write to the private universities to appear next week so that they don’t complain that they were not heard,” Wanami said.
Another 14 universities will repay government Sh17. 7 million spent on students whose names were duplicated in the payment schedules.
According to the report, a total of 42,490 out of the 153, 076 students placed in private universities by KUCCPS did not report to the respective universities during the seven-year period.
This accounts for 38 per cent of the total population of students who qualified for placement.
During the period under review, the government disbursed Sh15.7 billion to cater for the government sponsored students in private universities.
But the government over-disbusred by Sh3,195, 703 remitting a total of Sh15, 762, 573, 515 to the learning institutions.
The report further reveals four universities received a total of 1, 944 students more than their declared capacities.
The universities are St Pauls (1,064), KCA (752), Riara (121) and Kabarak (seven).
“The special audit noted that 22 universities had 62, 267 students placed without being supported by declaration of capacities from the universities,” Gathungu states.
MPs have previously questioned why the state was funding private universities yet the institutions are not open to audit by the nation's Auditor General.
In a previous meeting, Education committee chairman Julius Melly asked why the state was still placing students in private universities.
Last year, Khwisero MP Christopher Aseka sought to amend the Universities Act No. 42 of 2012 to stop KUCCPS from placing students in private universities.
“The object of the bill is to safeguard public funds from misuse by private entities which have not been brought under the regulatory framework of the Public Finance Management Act 2015 and the regulations thereunder,” Aseka says in the memorandum of objection.
