MPs give UoN two weeks to explain unpaid pension dues and taxes

Members of Parliament have given the University of Nairobi (UoN) two weeks to produce records explaining billions of shillings in unpaid pension contributions and taxes. An audit review found that the university did not remit about Sh1.4 billion in pension contributions and Sh50 million in Pay As You Earn (PAYE) in the 2021/2022 financial year alone.

UoN Vice-Chancellor Prof Ayub Njoroge Gitau and his management team faced the National Assembly Public Investments Committee on Governance and Education, which was reviewing the Auditor-General's reports for the 2020/2021 to 2024/2025 financial years. The committee, chaired by Luanda MP Dick Maungu, demanded documents on how the debts built up and what is being done to clear them.

Maungu said management had not given enough evidence to back its explanations, which made it hard for MPs to establish the size of the debts or whether the proposed solutions were working.

"There's nothing to support the good stories," he told the university officials.

MPs asked why money deducted from employees' salaries had not been sent to the relevant institutions, and warned that the unpaid tax could grow because of penalties and interest.

Kasipul MP Boyd Were questioned management over the unpaid PAYE. Lungalunga MP Chiforomodo Mangale asked how liabilities had grown. "How did it happen that there was an accumulation of up to Sh5 billion?" he asked. He warned the university against giving explanations without proof. "We are not here to sanitise issues. We need to get to the root of what happened," he said.

Central Imenti MP Moses Kirima called for a thorough review of the debts, comparing the concerns to those raised earlier over financial irregularities at Moi University. He urged the committee to find out how the liabilities built up and whether weak financial management played a part.

Gitau said UoN has started paying pension benefits to retiring employees and has resumed remitting pension deductions in recent months. He acknowledged that the university still has a deficit and is working with the pension scheme trustees on a recovery plan. He said the university is considering using some of its land and other assets to address the pension deficit, which he said has grown from about Sh5 billion to more than Sh10 billion.

He also said the Government owes the university a little over Sh3 billion in funding and payments linked to the Higher Education Loans Board (HELB). Management said the amount had fallen from nearly Sh5 billion but remains a burden.

Deputy Vice-Chancellor in charge of Finance, Planning and Development Prof Josiah Omollo Aduda said the university has given the Retirement Benefits Authority a remedial payment plan and is talking to the Kenya Revenue Authority about the unpaid taxes. MPs asked for correspondence, payment records and other documents to verify the claims.

Acting Director of Finance Stephen Kimeli blamed the problems on the cost of collective bargaining agreements, lower student numbers, changes in university funding and the effects of the Covid-19 pandemic. He said the university has cut spending on personnel costs, post-retirement contracts and staff meal payments, and is seeking to earn more by commercialising its assets. He said a valuation of its property has been done and the proposals have gone to the university council. Management also cited a staff strike as having hurt its day-to-day revenue.

Maungu directed the university to submit the outstanding documents within two weeks. He said the committee needs them to compare the university's financial position over the years and to verify the steps taken to address the liabilities. The committee will assess them alongside the Auditor-General's findings to decide whether the measures are working.