Public universities in Kenya are grappling with rising debt, with totals hitting Sh76.1 billion by June 2024, a 10.4 percent increase from Sh68.9 billion the previous year.

Auditor General Nancy Gathungu’s latest report shows that this growth in liabilities continues a trend seen over the past four years, raising serious concerns over the financial stability of the country’s higher education institutions.

The report, which audited 42 public universities, indicates that Sh10.96 billion of the debt is long-term, while Sh68.4 billion is classified as current liabilities.

“Current liabilities reported by public universities have been increasing steadily over the years. This continued growth suggests that institutions are consistently failing to meet their short-term obligations, including trade payables, statutory deductions, and other operational expenses,” Gathungu said.

“As a result, concerns arise regarding the financial sustainability of academic and administrative services offered by the institutions.”

Seventeen universities had unremitted statutory deductions totaling Sh29.6 billion. These included unpaid Pay As You Earn (PAYE) taxes, pension contributions, withholding taxes, and other payroll-related obligations.

Thirteen others had long-outstanding payables amounting to Sh8.5 billion, primarily owed to vendors, part-time lecturers, contractors, and staff claims, some dating back to 2008.

Among the 17 universities with unremitted statutory obligations, seven did not provide details on accrued penalties or offer evidence of structured plans to settle the liabilities, a move flagged as a violation of statutory requirements.

Under the Retirement Benefits Act, penalties on unpaid contributions are 5 percent of the amount owed or Sh20,000, whichever is higher, and must be fully remitted with interest.

Employers are also required to remit PAYE by the ninth day of the following month, with non-compliance attracting penalties of 5 percent, 1 percent monthly interest, and fines for late filing.

The audit further revealed that six universities recorded operating deficits totaling Sh3.2 billion, meaning their expenditures exceeded revenue.

These institutions are Moi University (Sh1.2 billion), Jomo Kenyatta University of Agriculture and Technology (Sh916.7 million), Technical University of Kenya (Sh877.97 million), Technical University of Mombasa (Sh141 million), University of Eldoret (Sh57.7 million), and University of Kabianga (Sh4.7 million).

“This reflects ongoing financial strain and poses a risk to the sustainability of essential services. The shortfalls also indicate structural weaknesses in revenue generation and expenditure management,” Gathungu noted, highlighting the urgent need for stronger fiscal oversight in public universities.