UoN given 14 days to account for Sh1.4 billion in unpaid pensions, Sh50 million in taxes

UoN given 14 days to account for Sh1.4 billion in unpaid pensions, Sh50 million in taxes

The committee, chaired by Luanda MP Dick Maungu, was reviewing the Auditor General’s reports covering the 2020/2021 to 2024/2025 financial years when it demanded documents explaining the university’s outstanding obligations.

The University of Nairobi has been given two weeks to explain billions of shillings in unpaid pension contributions and taxes after an audit review found that the institution failed to remit about Sh1.4 billion in pension contributions and Sh50 million in PAYE in the 2021/2022 financial year alone.

Appearing before the National Assembly Public Investments Committee on Governance and Education, Vice Chancellor Prof Eng Ayub Njoroge Gitau and his management team faced tough questions on how the debts accumulated and what steps they are taking to clear them.

The committee, chaired by Luanda MP Dick Maungu, was reviewing the Auditor General’s reports covering the 2020/2021 to 2024/2025 financial years when it demanded documents explaining the university’s outstanding obligations.

Maungu said the management had failed to provide enough evidence to support its explanations, making it difficult for MPs to establish the extent of the debts and assess whether the proposed solutions were working.

“There’s nothing to support the good stories,” Maungu told the university officials, demanding records showing what had been done to address the unpaid obligations.

The committee also questioned why money deducted from employees’ salaries had not been sent to the relevant institutions, with MPs warning that the outstanding tax amounts could grow due to penalties and interest.

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Kasipul MP Boyd Were questioned the management over the unpaid Pay As You Earn (PAYE) taxes, while Lungalunga MP Chiforomodo Mangale demanded an explanation for the accumulation of the liabilities.

“How did it happen that there was an accumulation of up to Sh5 billion?” Mangale posed.

He warned the university against presenting explanations without evidence, insisting that MPs wanted to establish what had led to the financial problems.

“We are not here to sanitise issues. We need to get to the root of what happened,” Mangale said.

Central Imenti MP Moses Kirima called for a thorough examination of the debts, drawing comparisons with concerns previously raised over financial irregularities at Moi University. He urged the committee to establish how the liabilities accumulated and whether weaknesses in financial management contributed to the situation.

Gitau told MPs that the university had started paying pension benefits to retiring employees and had resumed remitting pension deductions in recent months.

However, he acknowledged that the institution still faced a deficit and was working with pension scheme trustees to develop a recovery plan.

The vice chancellor said the university was considering using some of its land and other assets to address the pension deficit, which had grown from about Sh5 billion to more than Sh10 billion.

He also disclosed that the Government owed the university slightly more than Sh3 billion in outstanding funding and payments related to the Higher Education Loans Board.

The management said the amount had dropped from nearly Sh5 billion but remained a financial burden.

Deputy Vice Chancellor in charge of Finance, Planning and Development Prof Josiah Omollo Aduda said the university had submitted a remedial payment plan to the Retirement Benefits Authority and was engaging the Kenya Revenue Authority over the unpaid taxes.

He said the institution had held discussions with the relevant agencies and was working towards meeting its statutory obligations. However, MPs demanded correspondence, payment records and other documents to verify the claims.

The university’s acting Director of Finance, Stephen Kimeli, attributed the financial difficulties to the cost of collective bargaining agreements, reduced student numbers, changes in university funding and the effects of the Covid-19 pandemic.

He said the university had introduced spending cuts targeting personnel costs, post-retirement contracts and staff meal payments.

Kimeli added that the institution was seeking to generate more income by commercialising its assets and had carried out a valuation of its property.

The proposals had been forwarded to the university council for consideration.

The management also cited a staff strike as another challenge that had affected its day-to-day revenue.

Maungu directed the university to submit the outstanding documents within two weeks, saying the committee needed to compare its financial position over the years and verify the steps taken to address the liabilities.

The committee said it would assess the documents alongside the Auditor General’s findings to determine the university’s progress and whether the proposed measures were producing tangible results.