Renowned institution of learning; Kenyatta University (KU) has reportedly sunk into a deficit of 1.3 billion Kenyan Shillings in the year which ended in June of 2021. This has now led to the institution relying on short term loans in order to cater to the financial costs of its operations.
The Auditor-General; Nancy Gathungu stated that in the year up until June of 2019 the deficit for the University of Kenyatta was 677 million Kenyan Shillings.
The Auditor-General added that the University is currently continuing with its operations despite the financial strains it is facing, and is now relying on loans which have high costs that may end up making its liquidity issue worse.
Nancy Gathungu through a qualified audit opinion said, “The university is therefore, technically insolvent and if no urgent positive measures are taken to improve the financial position, it may not be able to meet its mandate in future.”
The recent audit revealed just how deeply the financial difficulties being experienced by institutions of higher learning in Kenya, go.
Public universities for example, have been stuck in major financial obstacles due to a decline in the number of students, low funding from the government, and mismanagement.
In the past couple of months, various universities have made decisions to discontinue a number of courses they offered, while also closing down their satellite campuses in order to reduce their operation costs.
The Auditor-General; Nancy Gathungu stated that the deficit which Kenyatta University (KU) experienced in the period under review, reduced the accumulated surplus of the university from 5.84 billion Kenyan Shillings in 2019 to 4.5 billion Kenyan Shillings.
Nancy Gathungu in a report which was tabled before the Kenyan Parliament made it known that, “Further, the current liabilities of Sh6.38 billion as at June 30, 2020, exceeded the current assets of Sh1.58 billion resulting in a negative working capital of Sh4.8 billion.”
The Auditor-General added that the liabilities are an indication of the likelihood that Kenyatta University (KU) may not be able to fulfill its financial obligations as and at when due. She singled out the fact that Kenyatta University (KU) was not able to pay out taxes and pensions which amounted to a total of 3.67 billion Kenyan Shillings, other deductions which were worth 342.9 million Kenyan Shillings to a number of beneficiaries, and audit fees of 8.1 million Kenyan Shillings.
How informative was this article? Are there any other news topics, categories, or How To topics, that you would like us to write on? Feel free to reach out to Mpesa Pay in the comment section.
