The Jomo Kenyatta University of Agriculture and Technology is broke. The institution is so financially stressed that it is unable to settle its pending bills. Also, JKUAT is unable to remit statutory deductions, among them pension, Pay as You Earn, and other third party deductions for its employees. This is according to a JKUAT audit report that was conducted by the Auditor General Nancy Gathungu.
According to Gathungu’s JKUAT audit report, JKUAT currently has negative working capital of more than Sh. 2.8 billion. Whereas it’s current assets were valued at Sh. 4.44 billion as of June 30, 2020, the university’s liabilities were to the tune of Sh. 7.3 billion.
“The university was, therefore, unable to meet its financial obligations as and when they fall due,” Gathungu said in the audit report. In the period under review by Gathungu, JKUAT was unable to remit pension and contributions by the employer to the tune of Sh. 11.8 billion. It could not also remit about Sh. 2 billion Pay as You Earn deductions and Sh. 243 million in respect of other third parties, with the non-remittances totaling Sh. 4.1 billion.
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“In the circumstances, the university is technically insolvent and its continued operations as a going concern will depend on the continued support from the government, donors, and creditors,” Gathungu said in the report. In addition, JKUAT was yet to pay general suppliers and contractors Sh. 145 million, debts that have been outstanding for more than one year. “The material uncertainty relating to the going concern has not been disclosed in the financial statements,” Gathungu added in her report.
JKUAT becomes the latest public university to enter into financial distress. Kenyatta University and the University of Nairobi have also been facing financial headwinds, which have resulted in increased tuition fees as they attempt to shore up their operating capital. Also, Kenyatta University has been facing strains from the Kenya Revenue Authority over unpaid taxes.
