The University of Nairobi has been given 14 days to explain how its pension deficit grew to more than Sh10 billion, with MPs demanding documents to support management’s account of the unpaid contributions and taxes.
The National Assembly Public Investments Committee on Governance and Education, chaired by Luanda MP Dick Maungu, issued the ultimatum on Wednesday after questioning Vice-Chancellor Ayub Njoroge Gitau and his team over audit reports covering the 2020/2021 to 2024/2025 financial years.
The committee said the university’s explanations were not supported by sufficient evidence to establish how the liabilities accumulated, what had been paid and whether the proposed recovery measures would resolve the problem.
“There’s nothing to support the good stories,” Mr Maungu told the university officials, insisting that they produce records to demonstrate what management had done to address the outstanding obligations.
The scrutiny comes amid concerns over the university’s failure to remit deductions made from employees’ salaries to pension schemes and the Kenya Revenue Authority, exposing the institution to mounting liabilities.
According to the Office of the Auditor-General, the university failed to remit about Sh1.4 billion in pension contributions and Sh50 million in Pay As You Earn (PAYE) taxes during the 2021/2022 financial year alone.
MPs questioned how the institution allowed the obligations to accumulate over several years, with Lungalunga MP Chiforomodo Mangale demanding an explanation for the outstanding balances.
“How did it happen that there was an accumulation of up to Sh5 billion?” Mr Mangale asked.
“We are not here to sanitise issues. We need to get to the root of what happened,” he added, warning that the committee would not accept explanations that could not be verified.
Kasipul MP Boyd Were also questioned the management over unpaid PAYE, warning that penalties and interest could increase the amount owed.
Appearing before the committee, Prof Gitau acknowledged the university’s financial difficulties, saying the pension deficit had grown from about Sh5 billion to more than Sh10 billion.
He told MPs that management had resumed remitting pension deductions in recent months and had started making payments to retiring employees.
The Vice-Chancellor said the university was working with pension scheme trustees to develop a recovery plan, including exploring the use of some of its land and other assets to help settle the outstanding obligations.
However, the proposed use of university property to address the deficit raises questions about how the institution intends to balance its immediate financial obligations with the need to preserve assets for teaching, research and other university functions.
The university also cited outstanding payments from the Government as part of its financial difficulties.
Prof Gitau said the Government owed the institution slightly more than Sh3 billion in outstanding funding and Higher Education Loans Board-related payments, down from nearly Sh5 billion.
Deputy Vice-Chancellor in charge of Finance, Planning and Development Josiah Omollo Aduda told the committee that the university had submitted a remedial payment plan to the Retirement Benefits Authority and was engaging the Kenya Revenue Authority over the unpaid taxes.
But MPs demanded correspondence with the agencies, payment records and other documents to verify the claims.
The university’s acting Director of Finance, Stephen Kimeli, attributed the financial pressures to the cost of collective bargaining agreements, reduced student numbers, changes in university funding and the effects of the Covid-19 pandemic.
He said management had introduced expenditure-cutting measures targeting personnel costs, post-retirement contracts and staff meal payments, while pursuing the commercialisation of university assets to generate additional revenue.
The proposals, he said, had been forwarded to the university council for consideration following a valuation of the institution’s property.
Central Imenti MP Moses Kirima called for a thorough examination of the university’s financial management, 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 controls had contributed to the situation.
The University of Nairobi, one of Kenya’s oldest public universities, has faced persistent financial pressures as institutions of higher learning grapple with funding constraints, rising operating costs and competing demands for resources.
The committee is examining the university’s audited accounts over five financial years to establish how the liabilities developed and whether management took timely corrective action.
Mr Maungu directed the university to submit the outstanding records within two weeks, saying MPs would compare the documents with the Auditor-General’s findings before assessing the proposed recovery measures.
