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UoN & KU among top universities that have gone broke

Top Kenyan universities on verge of going broke

UoN administration block

The University of Nairobi is technically broke and cannot meet its financial obligations unless it receives support from the government and lenders.

An audit report tabled in Parliament indicated that UoN was among three universities that are technically insolvent and operating on bank overdrafts.

A report by the Auditor General showed that UoN, Kenyatta University and Multimedia University had failed to remit billions in employees' statutory deductions including loans.

UoN's current liabilities total at Ksh5,724,377,000 and current assets worth Ksh4,288,628, resulting in a negative working capital if Ksh1,435,749,000.

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According to the report, UoN's management attributed the debts to a decline in capitation from the parent ministry.

Effects of workers

UON, Kenyatta University and Multimedia University reported negative working capital of Ksh5.5 billion during the 2017-2018 financial year.

Among the three, KU reported the highest debt at Ksh3.4 billion followed by UoN at Ksh1.4 billion and MMU at Ksh700 million.

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AG noted that KU may worsen its liquidity position, having resorted to financing its operations using short-term bank overdrafts.

Following the non-remittance of statutory deductions, staff members of the universities have been subjected to fines and penalties.

They may also be denied health services because their NHIF payments are not forwarded to the agency.

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