The State Department for University Education has been put on the spot over the disbursement of Sh3.4 billion to private universities.

In the audit report for the financial year 2021/2022, Auditor General Nancy Gathungu said her office was not in a position to confirm the regularity of the disbursements after coming across various anomalies.

The anomalies include failure by five universities to provide documents despite receiving funds, lack of supporting schedules of students benefitting, duplicated schedules of payment as well as payment of tuition fees to non-existence students.

“The statement of receipts and payments reflects Sh85,016,468,678 in respect of transfers to other Government units which as disclosed in Note 6 to the financial statements includes Sh3,374,791,603 in respect of transfers to private universities. In the circumstances, the accuracy, completeness and regularity of transfers to other government units could not be confirmed,” reads the report

According to the report, despite the department disbursing Sh265.3 million to five universities, no acknowledgment letters and receipts from the universities were provided to confirm receipt of the funds.

Unexplained variance

And while another amount of Sh198.5 million was disbursed to three universities, they only confirmed receiving Sh183.3 million, resulting in un-reconciled and unexplained variance of Sh15.2 million.

The report also noted that an amount of Sh22.6 million was disbursed to 13 universities for 404 students but analysis of the supporting schedules revealed that these students had been duplicated in the schedules, resulting in an overpayment of the entire amount totaling Sh22.6 million.

“A transfer to private universities of Sh136,295,811 was made for 3,357 students who had graduated by November, 2021 and, therefore, Management may have disbursed funds for students who had already completed studies and exited the universities.”

In addition, the report reveals that an amount of Sh376.99 million was disbursed for a total of 8,964 students who were not active in the period July, 2021 to June, 2022 as they had not registered to sit for the scheduled exams in their respective universities while an amount of Sh337.2 million was disbursed for a total of 7,828 students who had been in the universities for more than four years which is the normal period undertaken for most undergraduate programmes.

According to the report, the management may have disbursed funds for students who had deferred or quit the universities as well as paid tuition fees to non-existent students in private universities.

The report comes hardly months after MPs directed Gathungu to carry out a special audit of all funds sent to 31 private universities that have been receiving exchequer funding.

Capitation

The Public Investments Committee on Governance and Education Led by Bumula MP Jack Wamboka said that public universities were failing while the private universities were thriving.

Of the 31 universities, among the top beneficiaries include Mount Kenya University (Sh552.3 million) for 12,479 students, Kabarak University (Sh357.9 million) for 7,715 students, Catholic university of East Africa (Sh196.9 million) for 4,685 students, Kenya College of Accountancy university (Sh223.9 million) for 5,142 students, University of Eastern African Baraton (Sh183 million) for 4,222 students and Zetech University (Sh115.4 million) for 2836 students.

“We have requested the auditor General to do a special audit of funds sent to private universities as capitation. We also need to find out whether it is necessary for us to continue sponsoring students to private universities,” he said.

The Budget and Appropriation Committee in the 2023-24 Budget Policy Statement, which spells out priority expenditures for the government, directed the Kenya Universities and Colleges Central Placement Service (KUCCPS) to stop placing government sponsored students to private universities.

The move comes at a time when the government is struggling to fund public universities that are choked by debts amounting to over Sh56.1 billion According to the Universities Fund, most public universities are on the verge of collapsing due to indebtedness and inability to pay statutory deductions, such as Pay as You Earn taxes, sacco and bank loan repayments and remittances to NHIF and NSSF for health insurance and retirement benefits, respectively.