KU Bank Accounts: The Kenya Revenue Authority has frozen all bank accounts belonging to Kenyatta University over unpaid taxes amounting to Sh. 2 billion. According to a report that appeared in the Sunday Nation, the KRA resulted to blocking the accounts after the university failed in remitting statutory deductions.
The Sh. 2 billion that irked KRA is part of a Sh. 5.6 billion debt that Kenyatta University owes KRA and its suppliers. In what reveals the university’s deepening financial crisis, the institution is reported to have paid its staff in cheques that bounced at the bank.
In August 2021, the Auditor General Nancy Gathungu revealed that KU had dipped into Sh. 1.3 billion deficit in the year to June, forcing it to rely on short term loans to finance its operations.
Ms. Gathungu added that the university is operating under financial difficulties and is relying on costly borrowings which may further worsen the liquidity problem. “The university is therefore, technically insolvent and if no urgent positive measures are taken to improve the financial position, it may not be able to meet its mandate in future,” she said.
Gathungu noted that the deficit that the university recorded in the year under review reduced KU’s accumulated surplus from Sh. 5.84 billion in 2019 to Sh. 4.5 billion.
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“Further, the current liabilities of Sh. 6.38 billion as at June 30, 2020, exceeded the current assets of Sh. 1.58 billion resulting in a negative working capital of Sh. 4.8 billion,” she said, adding that KU was unable to remit pensions and taxes amounting to Sh. 3.67 billion, audit fees of Sh. 8.1 million and other deductions worth Sh. 342.9 million to the respective beneficiaries.