Staff cuts looms as broke universities adopt new capitation model

Public universities should consider sacking some of their workers to cope with reduced funding, the Treasury has said.

This is part of proposed austerity measures as the Government implements a new funding formula that has substantially reduced capitation for universities.

National Treasury Cabinet Secretary Henry Rotich yesterday admitted that universities were experiencing a funding crisis following the implementation of a new Differentiated Unit Cost (DUC), the amount of money required by an institution to teach one academic programme per year per student.

"It is possible that as the institutions try to adopt to this, they fail to remit third-party deductions," said Mr Rotich.

He added that most universities might have failed to remit the money they collected to the Kenya Revenue Authority (KRA), the National Social Security Fund, and the National Hospital Insurance Fund because of the funding shock.

"Maybe the DUC should have been implemented in phases but universities may now have to adopt new measures and this may include cutting staff numbers as they adapt to the new funding formula," said Rotich.

Details have emerged of the underlying pain of staff at universities, with reports saying some of them could not even get access to medical services.

It has emerged that some workers' bank loans have been outstanding for years as universities failed to forward the deducted sums to the financial institutions.

Some university workers have retired, but have yet to get their pension, while those in service are on the KRA radar because they have failed to comply with tax requirements.

The details were revealed when academic workers appeared before the National Assembly Education Committee chaired by Tinderet MP Julius Melly.

MPs heard that universities do not remit third-party deductions, putting workers on a collision course with financial institutions.

Saving societies

Universities also do not remit money to workers' cooperative saving societies.

The workers said some of them have been blacklisted by credit reference bureaus, while some had had their property auctioned for failing to honour loan repayments.

MPs heard that universities diverted billions of shillings meant to run the institutions and legislators have termed this a criminal offence.

Egerton, Technical, Jomo Kenyatta, Moi, and Nairobi were named as the notorious institutions in defrauding workers.