Auditor raises questions over Jaramogi fee system

The audit established the university’s fee management system lacks critical internal controls, potentially allowing rogue staff to collude with students to fraudulently alter fee records through backdated adjustments and irregular prepayments.

Auditors uncovered an incident in which an invoice adjustment dating back to 2018, valued at Sh353,500, created a phantom prepayment of Sh293,250 in favour of a student.

Although the university attempted to recover the funds in September 2024, the auditor general cast doubt on whether the money would ever be recovered.

She noted with alarm that “it’s not clear how the same will be recovered from the student, who probably completed the programme”.

According to the audit report on JOOUST accounts for the year ending June 30, 2025, the university system allows users to alter student ledgers and reverse transactions without internal computerised approvals.

It emerged that reversals for double invoicing could be processed without any built-in approval mechanism in the system.

“There is no approval within the system on the adjustments initiated by the users. Instead, the officer initiating adjustments in the system will need to get manual approval from the chief finance officer,” Gathungu says in the report tabled in Parliament.

She warned the loophole significantly increases the risk of abuse.

“The weakness in the system may result in potential losses and/or fraud arising from officers who may collude with students to adjust the accounts to their benefit,” the auditor general said.

The audit further revealed weak oversight controls within the university’s finance system.

While the system generates error logs, access is restricted to the Internal Auditor and the Systems Administrator, effectively locking out the chief finance officer from independently monitoring adjustments made to student accounts.

The auditor general warned the arrangement could allow irregular alterations to pass undetected.

Beyond the fee system, the audit exposed wider financial management failures at the university, including unpaid taxes, unsupported expenditure, weak fuel controls and questionable imprest records.

JOOUST was cited for failing to remit Sh70 million in Pay As You Earn (PAYE) taxes to the Kenya Revenue Authority.

Additionally, Sh15.7 million in government imprests remained outstanding, with some officers failing to surrender the funds for more than 274 days, contrary to the Public Finance Management Regulations, 2015.

Auditors also questioned Sh374 million spent on goods and services after finding the entries related to store issuance records rather than actual expenditure, with no supporting payee details, voucher numbers or descriptions.

“In the circumstances, the accuracy of the expenditure… could not be confirmed,” the report states.

Similarly, research expenses amounting to Sh504.7 million, including Sh353.7 million linked to the USAID Boresha Jamii project, lacked key supporting documents such as delivery notes, approvals and forwarding letters.

Council expenses worth Sh18.3 million were also unsupported, with auditors finding no schedules for sitting allowances, travel or capacity-building costs.

The audit further questioned the university’s fuel management system after it emerged that management relied entirely on records from a petrol station to monitor fuel consumption.

“The management did not have independent records on its fuel consumption,” the report noted, warning the weakness exposed the institution to possible fuel theft.

In another breach, the auditor general found that JOOUST was operating 10 bank accounts holding Sh155.8 million without approval from the National Treasury.

“In the circumstances, management was in breach of the law,” Gathungu said.

The university was also faulted for failing to establish a Climate Change Unit as required under Section 15(5)(c) of the Climate Change Act, 2016.

“The omission hinders the university’s capacity to implement and report on climate-related initiatives,” the report states.

On imprest management, auditors uncovered cases where staff surrendered amounts exceeding the original imprest issued, including one instance in which an officer returned Sh8.6 million against an imprest of only Sh61,445.

“This situation may indicate weaknesses in internal controls… and may also point to potential misstatements in financial reporting,” Gathungu warned.