Treasury hunts for hidden billions in varsities

Politics and policy

Treasury Cabinet secretary Henry Rotich. PHOTO | DIANA NGILA 

By KIARIE NJOROGE, gkiarie@ke.nationmedia.com

In Summary

• The Treasury says that an audit is on to verify the billions collected in fees by universities from self-sponsored students.
• The spotlight on the universities comes in a period that has seen the institutions raise billions of shillings from increased students’ intake, buoyed by a rising number of self-sponsored students.
• The law requires State agencies and ministries to first deposit their internal collections in the government’s main account before use.

Treasury secretary Henry Rotich has told the National Assembly that the government has started the search of billions of shillings that public universities have failed to declare.

The Budget review covering the nine months to March show that fee collections by the universities were not captured in the Education ministry’s expenditure plans.

This led to ministerial Appropriations-in-Aid (AIA) or internally generated funds recording an underperformance of Sh31.6 billion with the universities accounting for the largest share of the missing billions.

Now, the Treasury assures that an audit is on to verify the billions collected in fees by universities from self-sponsored students.

“The National Treasury would also engage the Ministry of Education to ascertain the level of Appropriations-in-Aid they collect through the Module 2 programmes,” Mr Rotich told the parliamentary Budget Committee at a closed door session on Monday.

He also told the MPs that the universities would not be allowed to spend the money from fees before depositing it in the government’s main account.

“The National Treasury had issued a circular to ministries, departments and agencies to have all their Appropriations-in-Aid converted into revenues,” added Mr Rotich.

Top universities like University of Nairobi and Kenyatta University are set to be the biggest losers in the plan to have all public universities share the fees raised from parallel or self-sponsored students.

“The National Treasury undertook to develop criteria for sharing the resources among the public universities,” said Mr Rotich.

The University of Nairobi was expected to raise Sh4.7 billion, Kenyatta University (Sh2.5 billion), Jomo Kenyatta (Sh1.9 billion) and Moi University (Sh1.6 billion).

The AIA, which stood at Sh39.1 billion against a target of Sh70.7 billion, is built from funds raised from the fuel levy and revenues generated by public universities.

“The AIA underperformance reflects the persistent problem of under-reporting, especially of the universities’ collection, which is not adequately captured in the ministry’s expenditure return for the period under review,” said Mr Rotich in the Budget review.

The law requires State agencies and ministries to first deposit their internal collections in the government’s main account before use.

The spotlight on the universities comes in a period that has seen the institutions raise billions of shillings from increased students’ intake, buoyed by a rising number of self-sponsored students.