Egerton University Struggles to Clear a Bill of Sh3.3 Billion

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Egerton University

Egerton University is among public universities struggling to clear huge debts accumulated over the years. The financially troubled institution has projects which have stalled for over 20 years. The five key projects are worth Sh160.9 million according to an estimate by the Nation Publication.

Said Egerton University projects include the proposed teaching complex worth Sh110million, a modern library estimated at Sh10 million, a security control checkpoint and associated buildings worth Sh5.9 million, a physical science complex worth Sh33.4 million and renovation of student hostels and pavements at a cost of Sh1.3 million.

The institution has also faced enough criticism over a number of scandals which have siphoned millions from its coffers. Among the scandals cited include gates scandal, Egerton complex scandal and the modern fencing project which are estimated to have had a swipe at the institution’s finances the illegal way. Egerton University is now in need of clearing a bill of Sh3.3 billion.

The government’s recurrent capitation to public universities has been reducing steadily over the last three years.

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At the same time, fees from students, both regular and self-sponsored, which is the biggest component of internally generated funds, has dropped drastically in the last four years.

Interestingly, even as the funding from the government dries up, Treasury Cabinet Secretary Ukur Yatani has directed that all pending bills by State agencies and counties be settled within the current financial year.

Part-time lecturers are the hardest hit among suppliers of services as they are owed Sh930 million. Other unspecified claims amount to Sh131 million.

Staff proceeding for retirement will have to wait longer for their pension funds as the university has not remitted contributions amounting to Sh889.6 million.

The Kenya Revenue Authority (KRA) is chasing the university for Sh692.2 million while saccos are still waiting for Sh250.7 million to be remitted.

Other unremitted payroll deductions amounting to Sh61.7 million and Sh114.4 million in staff gratuities are also pending.

According to a letter from Vice Chancellor Rose Awuor Mwonya to the Education ministry, the institution’s recurrent capitation reduced by 26 per cent between financial years 2015/2016 and 2019/2020.

The March 17 letter noted that this translated to a reduction from Sh2.8 billion to Sh738 million in financial year 2016/2017.

“Due to the impact of a reduction in capitation and largely constant expenses, the university realised a cumulative net deficit of Sh1.7 billion in the year ended June 2019, while the previous year the net deficit was Sh928 million. In 2017, the deficit was Sh449 million,” Prof Mwonya said.

“In the half of the financial year 2019/2020, the university had a net deficit of Sh445 million, meaning the pending bills as at February [stood at] Sh3.3billion.”

In the last financial year, the capitation from the National Treasury reduced further to Sh2 billion.

The stalled projects are likely to disrupt learning, training and research, and slow the university’s key mandate of innovation and technology development.

“Training in agriculture is key to enhancing food and nutrition to all Kenyans. Egerton University plays a key role in training and research, technology development and innovation in agriculture, that contributes to the Big Four agenda,” the VC said.

She added that the library project will enhance the university’s ability to deliver on this mandate.

The financial strain at Egerton University has been worsened by the Covid-19 pandemic, which has forced it to close alongside other universities in the country.

The university was forced to reduce academic staff salaries by 40 per cent from April, a move that has seen the dons go on strike in a demand for full pay.

The university has proposed the retrenchment of 400 staff in the administrative and support cadres in a bid to reduce the payroll cost.

“The retrenchment was approved by the University Council at its sitting on March 7. This will reduce the payroll cost by Sh38.7million per month, which will translate to a saving of Sh464 million per year,” Prof Mwonya said in a letter to Education Cabinet Secretary George Magoha.

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