The University of Nairobi (UoN) has been given two weeks to produce documents explaining billions of shillings in unpaid pension contributions and taxes, after MPs said the management's explanations were not backed by evidence.

The National Assembly Public Investments Committee on Governance and Education, chaired by Luanda MP Dick Maungu, issued the directive while reviewing Auditor-General's reports for the 2020/2021 to 2024/2025 financial years. The audit found the university failed to remit about Sh1.4 billion in pension contributions and Sh50 million in Pay As You Earn (PAYE) tax in the 2021/2022 financial year alone.

"There's nothing to support the good stories," Maungu told Vice-Chancellor Prof Ayub Njoroge Gitau and his team, demanding correspondence, payment records and proof of the measures the university says it has taken.

MPs press on deductions

Committee members questioned why money deducted from workers' salaries had not been passed on to the pension scheme and the taxman, warning that unpaid tax would keep growing through penalties and interest. Kasipul MP Boyd Were pressed the management on the PAYE arrears.

Lungalunga MP Chiforomodo Mangale demanded to know how the pension liability had built up. "How did it happen that there was an accumulation of up to Sh5 billion?" he asked. "We are not here to sanitise issues. We need to get to the root of what happened."

Central Imenti MP Moses Kirima called for a thorough examination of the debts, comparing the situation with financial problems previously raised at Moi University.

Deficit has doubled

Prof Gitau told the committee the university had started paying benefits to retiring staff and had resumed remitting pension deductions in recent months. He admitted, however, that the pension scheme deficit had grown from about Sh5 billion to more than Sh10 billion, and said the university was considering using some of its land and other assets to close it.

He also said the government owes UoN slightly more than Sh3 billion in outstanding funding and HELB-related payments, down from nearly Sh5 billion.

Deputy Vice-Chancellor for Finance, Planning and Development Prof Josiah Aduda said the university had submitted a remedial payment plan to the Retirement Benefits Authority and was in talks with the Kenya Revenue Authority over the unpaid taxes.

Blame on CBAs, falling numbers

Acting Director of Finance Stephen Kimeli blamed the financial strain on the cost of collective bargaining agreements, fewer students, changes in university funding and the effects of the Covid-19 pandemic. He said the university had cut spending on personnel, post-retirement contracts and staff meals.

The hearing comes as public universities brace for the cost of the new Sh20 billion lecturers' pay deal signed on Friday, raising fresh questions about how already indebted institutions such as UoN will meet their obligations.

Photos: Bahnfrend/Wikimedia Commons (CC BY-SA 4.0); The Eastleigh Voice. Thumbnail design: HAMASTA MEDIA.