NAIROBI, Kenya – Twenty-one public universities are staring at financial collapse after accumulating a combined negative working capital of Sh42.5 billion, casting doubt on their ability to sustain operations without urgent reforms.
A new report by the Auditor General for the 2023/2024 financial year reveals that liabilities at the institutions have consistently outweighed their assets, with deep-rooted inefficiencies, ballooning wage bills and unremitted statutory deductions worsening their precarious financial positions.
“The going concern in public universities is increasingly under threat due to persistent financial constraints and systemic inefficiencies. A significant number of institutions are operating under negative working capital positions, whereby current liabilities consistently exceed current assets, raising concerns about their ability to meet short-term financial obligations,” Auditor General Nancy Gathungu noted.
Major Universities in Distress
The report identifies Kenyatta University as the worst hit, with a negative working capital of Sh10.97 billion, followed by the University of Nairobi at Sh8 billion.
Others in deep financial distress include:
- Egerton University – Sh7.4 billion
- Jomo Kenyatta University of Agriculture and Technology (JKUAT) – Sh6.6 billion
- Technical University of Kenya – Sh5.6 billion
- Moi University – Sh3.6 billion
- Multimedia University of Kenya – Sh1.67 billion
- Taita Taveta University – Sh259.95 million
Additional deficits were recorded at the University of Kabianga (Sh609.5m), Technical University of Mombasa (Sh357.5m), and Maasai Mara University (Sh280.5m).
Wage Bill Crisis
Despite their financial struggles, public universities spent Sh62.2 billion on salaries in the year under review, accounting for 62 per cent of their total revenue of Sh100.7 billion.
The Technical University of Kenya posted the highest wage-to-revenue ratio at 116 per cent, followed by Taita Taveta University at 83 per cent—a trend Gathungu said undermines financial sustainability and risks disrupting critical operations.
Governance and Mismanagement
The audit further flagged widespread mismanagement in the institutions, including unremitted statutory deductions, long-outstanding receivables and payables, unsupported expenditures, unreconciled variances, and unbudgeted spending amounting to Sh67.7 billion.
These failings expose universities to penalties, litigation and further erosion of public confidence.
Parliament has warned that over-reliance on exchequer support is unsustainable.
In June, National Assembly Education Committee Chair Julius Melly urged universities to diversify income streams.
“As chairs of your universities, you must look at ways to be financially self-reliant through student enrolment, research grants and enterprise development. Universities should no longer be seen solely as academic institutions but as entities capable of generating income,” Melly said.
