No respite in financial woes of public varsities
A decision by the government in 2018 to cut funding to higher education institutions by Sh1 billion coupled with mismanagement in public universities has now put some of the learning institutions on the brink of financial insolvency.
Most of the public universities that survive on student fees and government funding are now unable to pay staff salaries, statutory deductions and pension contributions.
The crisis echoes the financial upheaval of the mid-1980s to 90s, when the public university system almost went under owing to State budgetary cuts, introduction of tuition fees and other market-based strategies.
The public institutions, which admit the majority of Kenya’s university students-have attributed their problems to under-funding by the government and poor collection of internal revenue.
Some private universities are also walking on a tightrope following reforms in Kenya Certificate of Secondary Education (KCSE) exams starting 2016 that saw a drastic fall in the number of university students who got minimum university qualifications.
All the 88,929 KCSE candidates who got C+ in 2016 were eligible to join public universities compared to 169,492 in 2015, most of whom sought places in private institutions.
The current financial woes could now drive the institutions, which produce most of the intellectuals supposed to drive the economy, into a grip of quality crisis of their graduates.
There is also a question on existence of cheap, low-quality satellite campuses that don’t have even the most basic facilities.
Estimates further show that the State has funded university education at a fixed rate of Sh70, 000 per student per academic year, notwithstanding the programme of study, for the last 26 years.
In the 2019-20 budget read out by embattled Treasury Cabinet Secretary Henry Rotich, public universities were allocated Sh97.7 billion.
In the current financial year, the State has set aside Sh12.6 billion for student loans managed by the Higher Education Loans Board (Helb).
Rotich had said the government would review university reforms and management systems, adding that the process involves radical measures that would see some universities merged and closure of unviable colleges.
In another discouraging turn of events, Education Cabinet Secretary George Magoha, while addressing the institutions’ heads last year, told them they should not expect money from the government to offset the deficits.
Among the most financially challenged institutions are the University of Nairobi (UoN), Moi University, Technical University of Kenya, Multimedia and Kenyatta universities.
According to an audit report tabled in Parliament in May last year, UoN had sank into a Sh1.4 billion debt hole after setting a projected revenue of Sh2 billion which it failed to meet.
The then Auditor-General Edward Ouko said in the 2018 financial statements that the university was unable to meet its financial obligations as they fell due.
The university was thus unable to remit statutory deductions such as Pay As You Earn tax of Sh282 million, NSSF Sh3 million, NHIF Sh10 million, Chuna Sacco Sh204 million and Helb Sh1.5 billion.
Outstanding students’ debt for the last one year (2018) stood at Sh871 million, whose recovery Ouko said remains doubtful.
The university management attributed the debts to a decline in capitation from the parent ministry, a decline in student enrolment in Module II (private intake), strikes by the academic staff and the 2017 prolonged presidential election, which led to the university’s closure.
The report, however, warned students that Section 8.1 of the university’s financial regulations states that UoN can withhold any and all services, exam results and conferment of degrees or certificates until all fees are settled.
A similar report indicated that Multimedia had a debt of Sh700 million where its workers’ deductions of Sh574.8 million are yet to be paid, as well as Sh242.9 million of pensions and taxes and gratuity of Sh331.9 million.
Kenyatta University, which in late 2018, failed to remit pension and taxes amounting to Sh808.3 million and Sh161.8 million deductions to the respective beneficiaries, risking fines and penalties.
But Vice chancellor Prof Paul Wainaina, who in June last year sought to dispel talk that the institution was financially insolvent, now admits the institution is experiencing financial instability.
It has since shut down three campuses in Nyeri, Kericho and Kigali, Rwanda affecting close to 1,500 students.
Speaking during the university’s graduation ceremony last month, Wainaina said KU has been adversely affected by both reduced private student numbers as well as lower funds from the exchequer.
“This has affected our operations, especially timely remittance of statutory deductions, pending bills, completion of earmarked projects and negotiation of internal CBAs with our staff unions,” he said.
Desperate, the university retrenched in excess of 2,000 casual workers to keep afloat. Some of the victims have sued it for breaching their contracts and forcing them out.
“Let us avoid any disruptions of university activities and programmes as these can only lead to financial woes,” Prof Wainaina pleaded with stakeholders.
The crisis has seen public universities unload the burden on parents and students. This is not only increasing student debt but also prevent poor students from accessing higher education.
“The financial challenges will have a long-term impact on the quality of education as well as graduates.
Furthermore, it will lead to lower research productivity. We are facing difficult financial times as parents and it’s time the government moves in to rescind some decisions,” said Monicah Muthoga, a parent at KU.
But there is hope this year as the number of last year’s KCSE exam candidates, who got at least the minimum university entry qualification of mean grade C+ (plus) is 125,746, compared with 90,377 in the 2018 KCSE examination.
This means more students will be forced to apply for admission in private universities or Module II classes in the public institutions.