Undisclosed Sh14bn puts universities on the spot

Treasury secretary Henry Rotich. FILE PHOTO | NMG

What you need to know:

  • The law requires State agencies and ministries to first deposit internal collections in the government’s main account before use.
  • The spotlight on universities comes in a period that has seen the institutions raise billions of shillings from increased intake, buoyed by a rising number of self-sponsored students.

Treasury secretary Henry Rotich has accused public universities of failing to declare internally generated cash as the government faces difficulties in funding projects.

The Quarterly Economic and Budgetary Review covering the nine months to March shows that collections of ministerial Appropriations-in-Aid (A-I-A) or internally generated funds recorded an underperformance of Sh14.4 billion.

“The A-I-A underperformance reflects the problem of under-reporting by universities for the period under review,” said Mr Rotich in the report.

The A-I-A, which stood at Sh75.6 billion against a target of Sh90.1 billion, is built from funds raised from fuel levy, and revenue generated by public universities.

The law requires State agencies and ministries to first deposit internal collections in the government’s main account before use.

The spotlight on universities comes in a period that has seen the institutions raise billions of shillings from increased intake, buoyed by a rising number of self-sponsored students.

The number of students enrolled in public universities grew by 46, 558 last year to 421,783 and up from 363,334 in 2014 due to approval of new degree courses and the setting up of new universities.

Non-remittance of funds could open loopholes through which billions of taxpayers’ funds are lost or mismanaged.

The Controller of Budget is supposed to authorise withdrawal of public funds from the State’s main account. This means that cash raised and used by the universities is outside the watch of the budget chief.

The failure to declare internally generated cash comes at a time when the Kenya Revenue Authority (KRA) missed tax revenue collection targets by Sh51.4 billion, raising uncertainty on the government budgetary spending projections.

The taxman attributed the performance to the underperformance of income tax and value added tax (VAT) on imports.

The KRA missed income tax target from workers by Sh34.2 billion while VAT on imports underperformed by Sh9.8 billion.