MPs want records explaining the University of Nairobi’s pension deficit and unpaid taxes.
MPs want the University of Nairobi to document unpaid pension contributions, tax arrears and its recovery measures within two weeks.
MPs have given the University of Nairobi 14 days to explain the UoN pension deficit, now exceeding Sh10 billion. They also want documentary evidence on unpaid taxes and management’s efforts to settle the liabilities.
The National Assembly Public Investments Committee on Governance and Education questioned Vice-Chancellor Prof Ayub Njoroge Gitau and his team. Its review covered Auditor-General’s reports for the 2020/2021 to 2024/2025 financial years.
Committee chair and Luanda MP Dick Maungu said verbal assurances could not demonstrate progress. Instead, he demanded payment records and agreements with the relevant statutory agencies.
UoN pension deficit prompts demands for evidence
Audit findings showed unremitted pension contributions of approximately Sh1.4 billion during the 2021/2022 financial year alone. The university also failed to remit Sh50 million in Pay As You Earn taxes that year.
MPs questioned why employee deductions had not reached the relevant institutions. They also sought an explanation for the growth in liabilities over successive years.
Kasipul MP Boyd Were warned that penalties and interest could increase the outstanding tax bill. Meanwhile, Lungalunga MP Chiforomodo Mangale demanded records explaining the financial decisions behind the accumulated obligations.
Central Imenti MP Moses Kirima also called for a comprehensive review of the university’s finances. He wanted MPs to examine possible weaknesses in financial controls and assess whether recovery proposals would work.
Management outlines pension and tax recovery plans
Gitau said the university had started paying retiring employees and resumed pension remittances in recent months. However, he acknowledged continuing financial constraints as management worked with pension trustees on a recovery plan.
He told MPs that the pension deficit had risen from approximately Sh5 billion to more than Sh10 billion. Management was therefore considering using university land and other assets to help settle the obligations.
Gitau also said the government owed the institution slightly more than Sh3 billion. This covered outstanding funding and payments linked to the Higher Education Loans Board.
Management said those arrears had fallen from nearly Sh5 billion. However, they continued to affect the university’s ability to meet its obligations.
Deputy Vice-Chancellor Prof Josiah Omollo Aduda said management had submitted a payment plan to the Retirement Benefits Authority. It was also engaging the Kenya Revenue Authority over unpaid taxes.
Financial pressures and spending cuts
Acting finance director Stephen Kimeli cited collective bargaining agreement costs, declining student numbers, funding changes and Covid-19 effects. He also said a staff strike had affected daily revenue generation.
Management’s spending cuts targeted personnel costs, post-retirement contracts and staff meal payments. Meanwhile, proposals to commercialise university assets had gone to the council following a property valuation.
The committee will examine correspondence, payment schedules and remittance records alongside audit findings before assessing the recovery measures.
