Panic as KRA freezes Kenyatta University bank accounts
The Kenya Revenue Authority (KRA) has reportedly frozen bank accounts belonging to Kenyatta University over the non-remittance of statutory deductions amounting to billions of shillings.
The shocking move by the taxman has lifted the lid on the worsening financial problems at the state-run university, throwing students, staff and suppliers into panic.
A 2020 audit report by the Auditor General Nancy Gathungu, indicated that the institution owed the taxman Ksh2billion, part of a larger Ksh5.6billion debt owed in unpaid statutory deductions.
Gathungu noted that the cash-strapped institution was still likely to face unending financial problems in the future.
“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 Auditor General stated.
The audit report, that has exposed the university's management to legal action by state agencies, indicated how the institution has been channeling funds collected from pensions, salary taxes and health insurance contributions to other expenditure streams.
The university management is said to have appealed to KRA to lift the the freeze as they seek to settle a fraction of the arrears it owes the taxman.
The university is reported to have in the past months, resorted on short term loans to pay salaries and wages as well as running daily operations. It is further alleged that the institution paid its staff this month using cheques that were later rejected by banks.
The financial woes of the lucrative university comes in the backdrop of similar reports at other top institutions. EACC detectives were last week dispatched to look into claims of fraud and embezzlement at Moi University.