Public universities in Kenya face mounting financial pressure as 17 institutions have failed to remit Sh29.65 billion in statutory deductions, according to the Auditor-General Nancy Gathungu.
The sums, withheld from staff salaries, have not been submitted to relevant state agencies, raising concerns over potential penalties and interest charges. The details were revealed in the 2023/24 audit report presented to Parliament.
The unremitted amounts cover a range of deductions, including Pay As You Earn (PAYE), Housing Levy, pension contributions, the National Social Security Fund, and the National Hospital Insurance Fund, now known as the Social Health Authority.
In addition, the audit notes unpaid corporation tax, withholding tax, and VAT. The report warns that these lapses expose financially strained universities to unnecessary financial liabilities.
“The universities lacked disclosures on accrued penalties or evidence of structured plans to settle these liabilities,” the audit states. Pension contributions are critical, as they provide for employees’ terminal benefits when they retire, resign, or pass away. The Retirement Benefits Act mandates a penalty of five per cent of unremitted contributions or Sh20,000 – whichever is higher – along with full payment and interest.
Kenyatta University leads the list with Sh17.31 billion in unremitted deductions, followed by Egerton University at Sh7.7 billion, Technical University of Kenya with Sh2.02 billion, and Multimedia University at Sh1.3 billion.
According to the audit, Kenyatta University’s unpaid statutory deductions have “attracted undetermined penalties and interests.” The Kenya Revenue Authority (KRA) has issued a demand notice to the university for PAYE of Sh7.5 billion and corporation tax of Sh42.23 million, including penalties and interest.
Egerton University owes Sh7.6 billion in unpaid salaries, deductions, and pension contributions. Additional unpaid amounts include VAT of Sh30.34 million, internal creditors of Sh26.36 million, Higher Education Loans Board obligations of Sh25.3 million, and withholding tax of Sh15.69 million.
Multimedia University has Sh1.3 billion in unremitted deductions, including PAYE of Sh475 million and withholding tax of Sh52.3 million. Pension contributions account for Sh727.04 million of the balance. Kisii University has not remitted Sh561.4 million in employee retirement benefits, outstanding since January 2019.
Other institutions with unpaid statutory obligations include the University of Kabianga, which owes Sh237.23 million for pensions, Maasai Mara University with Sh225 million (including Sh223.7 million in employee benefits and Sh1.3 million PAYE), and Rongo University at Sh219 million in unpaid pensions.
Masinde Muliro University of Science and Technology owes Sh156.8 million, while Meru University of Science and Technology has unremitted deductions totaling Sh44.24 million, including PAYE of Sh36.05 million, payroll payables of Sh5.5 million, withholding tax of Sh1.4 million, VAT of Sh1.1 million, and pensions of Sh251,291.
South Eastern Kenya University has Sh34.2 million in unpaid statutory deductions, including PAYE of Sh22.04 million.
The audit paints a stark picture of the growing financial challenges facing public universities, highlighting gaps in compliance with statutory obligations that could further strain already limited resources.
