Magoha spot on about insolvent public universities

Education CS George Magoha when he appeared before the Senate Education Committee at Parliament on 04/07/19. [Boniface Okendo,Standard]

Last week in Parliament, Education Cabinet Secretary Prof George Magoha faced off with the Secretary-General of the Kenya National Union of Teachers (Knut) Wilson Sosion over the Government’s proposal to close down some public constituent colleges.

Prof Magoha said it was imperative for the Government to push ahead with the policy despite objection from university administrators since many universities were operating under negative capitalisation.

“The problems facing public universities came as a result of sanitising results of the Kenya Certificate of Secondary Education and the universities were expanded because we were feeding them with fake results,” he said.

“Now that the fake results are not there, they are struggling. Close to 10 universities are insolvent because they expect the Government to keep on funding them.” An analysis by The Financial Standard on the latest audit reports on public universities indicates that the education CS is correct.

Of 23 public universities audited by the Auditor General Edward Ouko for their operations during the 2016/2017 financial year, 12 are insolvent, with the other 11 barely breaking even. Maseno University, for example, recorded Sh2.8 billion in total revenue for the 2016/2017 financial year against Sh2.7 billion in total expenses, with employee costs accounting for more than 70 per cent of the university’s Sh2.7 billion expenditure.

At Machakos University, Mr Ouko flagged a loss of Sh96 million in the 2016/2017 financial year, resulting in cumulative negative revenues reserves to the tune of Sh235 million as at 30th June 2017. The University’s total income for the 2016/2017 financial year stood at Sh756 million against a total expenditure of Sh852 million for the same period.

Several universities were also indicted for failing to update records to reflect the actual number of enrolled students. At Maasai Mara University, for example, the Auditor General flagged accuracy of the revenue from tuition fees that the university recorded as it conflicted with the number of registered students.

“The university reported tuition fees of Sh457 million,” explained Mr Ouko. “However, re-computation and analysis of the nominal roll revealed that tuition fees due from 14,336 students who were in session in the four semesters of the financial year 2016/2017 was Sh350 million.”

Laikipia University is similarly working under a negative capitalisation of Sh117 million, with Kisii University recording revenues of Sh3.05 billion against expenses of Sh3.04 billion.

Karatina University is similarly operating on a Sh10 million negative working capital position, with total current assets standing at Sh155 million against Sh166 million in current liabilities while Kirinyaga University reported Sh482 million in revenue against Sh509 million in total expenses over the same period.

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Education Cabinet Secretary Prof George MagohaAuditor General Edward OukoKnutWilson Sosion