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Varsities on the spot over unremitted staff deductions

Saturday June 23 2018

Constantine Wasonga

Uasu Secretary-General Constantine Wasonga. He says university workers are paying the price of failure to submit deductions because they are being denied essential services. FILE PHOTO | NATION MEDIA GROUP 

OUMA WANZALA
By OUMA WANZALA
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A fresh, damning audit report has revealed shocking details of how public universities are deducting billions of shillings from their employee's salaries but not remitting the money to relevant agencies.

The Ministry of Education report, which was ordered by Cabinet Secretary Amina Mohamed, says universities are making deductions for National Hospital Insurance Fund (NHIF), bank and sacco loans and savings, retirement savings and Pay As You Earn but not remitting them.

MANDATORY

Remittance of statutory, loan and members' deductions to saccos and banks are mandatory employer obligations.

These deductions are made from employee’s pay and are expected to the remitted within the stipulated time.

However, the audit report indicates that some universities have failed to comply with the law on these remittances, meaning that they are either illegally holding or spending the money they deduct from their staff.

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The illegality has affected workers in at least 10 universities.

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HEALTH SERVICES

This means that the workers are likely to be denied health services because their NHIF payments are not forwarded to the agency.

It also means that many have been or risk being listed as defaulters because their loan deductions have not been forwarded to Saccos and banks.

According to the report, a total of six universities have outstanding remittances to banks and Saccos amounting to Sh481.3 million.

Out of this, Sh172.2 million had accumulated before the start of this financial year. That means Sh309 million has not been paid out to the relevant institutions in this financial year.

DEFAULT

“This implies that 36 per cent of the amount has been in default for over one year,” reads the report that has since been submitted to Ms Mohamed for further action.

Besides this, a total of 10 universities have outstanding PAYE remittances amounting to Sh2.63 billion, an anomaly that exposes the staff to penalties from the Kenya Revenue Authority (KRA) because the workers are required to file tax returns annually. The deadline for filing returns expires next week.

According to the report, five universities have outstanding remittances to NHIF amounting to Sh4.28 million while 26 other universities have outstanding pension remittances amounting to Sh4.58 billion.

PENSION

Pension attracts interests and failure by universities to submit the deductions will mean that their workers will retire without getting their rightful benefits in their old age.

Moi University is the worst performing in this category, having de-faulted on remittances to Saccos and banks.

It is still holding on to Sh306.73 million of its workers' money irregularly.

It followed by Egerton University, which has not remitted Sh187.95 million.

In third place in the list of worst performers is Technical University of Kenya (TUK), which is yet to submit Sh178.9 million.

UNIVERSITY OF NAIROBI

The University of Nairobi is fourth with Sh50.76 million, followed by Kenyatta University (Sh39.3 million), Kisii University (Sh24.17 mil-lion). Murang'a University, by contrast, is yet to remit Sh169,783 only.

Universities that have defaulted in remittance of NHIF deductions are; Technical University of Kenya (Sh3.16 million), Egerton University (Sh695,600), Maasai Mara University (Sh215,400), Multimedia University of Kenya (Sh191,400) and Kaimosi Friends University College with only Sh19,200.

The 10 universities which have defaulted on PAYE remittances are KU, the University of Nairobi, the Technical University of Kenya, Multimedia University of Kenya, Egerton University, Rongo University, Murang'a University of Technology, Maasai Mara University, Kaimosi Friends University College and Taita Taveta University.

BIGGEST DEFAULTER

KU is the biggest defaulter with Sh902.6million, followed by the University of Nairobi with Sh704.6 million while Technical University of Kenya rounds off the three worst performers with Sh634.3 million.

The worst offenders in the remittance of pensions are the University of Nairobi at a staggering Sh1.35 billion; Jomo Kenyatta University of Agriculture and Technology with Sh1.1 billion and Technical University of Kenya at Sh946 million.

Universities Academic Staff Union (Uasu) Secretary-General Constantine Wasonga said university workers are paying the price of failure to submit deductions because they are being denied essential services.

AUCTIONEERS

According to him, the property of some staff members have been attached by auctioneers because they cannot service their loans. Some have also been referred to credit reference bureaus.

And because pension deductions for the 27,000 university staff are contributory, this means the government is not honouring part of its bargain.

This, in effect, implies that besides the risk of losing their money, the workers will also not enjoy the benefit of interest on the money that is deducted from their pay but is not remitted.

Universities are blaming lack of funds for the crisis.
In the past, the Vice Chancellors Committee Chairman, Prof Francis Aduol, said universities were not being funded well and they had reduced their focus on paying staff their salaries.

“More than 50 per cent of public universities with the current capitation from the government cannot manage to pay even the basic salaries of their staff," Prof Aduol told the National Assembly’s Education Committee in March.