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Who owns USIU? House opens probe amid claims of tax evasion

Saturday November 22 2014

United States International University--Africa (USIU-A) Vice Chancellor Prof Freida Brown speaks during the university's rebranding on May 15, 2014. Parliament has opened an investigation to determine the ownership of the institute, just after the institution announced the retirement of Prof Brown. PHOTO | JEFF ANGOTE |

United States International University-Africa (USIU-A) Vice Chancellor Prof Freida Brown speaks during the university's rebranding on May 15, 2014. Parliament has opened an investigation to determine the ownership of the institute, just after the institution announced the retirement of Prof Brown. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

BENJAMIN MUINDI
By BENJAMIN MUINDI
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Parliament has opened an investigation to determine the ownership of one of the oldest private universities in Kenya just after the institution announced the retirement of its vice-chancellor.

The United States International University-Africa (USIU-A) says Prof Freida Brown will retire next year after more than 20 years at the helm of the institution.

Making the announcement this week, Chancellor Dr Manu Chandaria said he has convened a committee to find a new vice-chancellor.

Documents held by the departmental committee on Education, Science and Technology in Parliament seen by the Sunday Nation show the USIU investigation covers property, governance and financial structures of the university.

The committee is further investigating allegations that the vice-chancellor overruled a decision by a postgraduate student’s supervisor to award a master’s degree to a candidate who had failed to meet the required marks for graduation.

There are also claims that the university has evaded paying taxes. The committee led by acting chairperson and Tinderet MP Julius Melly has embarked on the investigation.

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NO OWNERS

The investigation followed an order by the Speaker of the National Assembly, Mr Justin Muturi, after the Education ministry apparently supplied an “unsatisfactory” answer to questions regarding USIU-Africa, which had been asked by Machakos Town MP Victor Munyaka.

In the questions, Mr Munyaka had sought to establish whether USIU-A was a foreign university operating in Kenya and whether the institution had a substantive chancellor as is required by the Universities Act.

Although the law requires a university to declare its owners, technically called sponsors, “who shall be any person proposing the establishment of a university and committed to its development, implementation, construction, maintenance, management and financing”, Prof Brown said the university did not have owner(s) but it was a local institution incorporated in Kenya.

This is after it emerged that its parent organisation, USIU San Diego, had “tried to sell USIU offshore without its knowledge.

The Commission for University Education (then named Commission for Higher Education) moved in to save the university,” the documents read.

USIU-A is governed by a board of trustees composed of seven Americans and four top local chief executives.

The 14-member board is chaired by Dr Chandaria (a British citizen) and includes seven Americans, four Kenyans, and two Ghanaians.

AN IRREGULARITY

Dr Chandaria not only chairs the board of trustees but is also the chancellor of the university – an irregularity that has already been flagged by the ministry of Education as well as Parliament – in the correspondence between the institutions.

Dr Chandaria is also the chancellor of the Technical University of Kenya.

In a written response after the Sunday Nation sought a comment, Prof Brown said that “USIU-Africa is in the process of amending its charter to comply with the Universities Act, 2012” and this will ensure that the board and council will have separate and clear functions.

Regarding the question of approving a master’s degree when the student had failed, Prof Brown said the allegation was not factual and that “the vice-chancellor does not approve students’ theses”.

She also noted that MPs were not sure in their query whether it was a master’s or PhD thesis in question.

On the question that the university is a non-profit entity yet it was among the most expensive institutions of higher learning in Kenya, Prof Brown said: “The principle behind a non-profit is that all funds are rolled back into the development of the institution. That is what USIU-Africa is doing.”

She added: “The government does not fund USIU-Africa so any surplus we get is channelled back into development projects in the university. Further, USIU-Africa has provided an outstanding learning environment with enviable infrastructure and physical facilities. We also have small classes and a diverse student and faculty population.”

TAX EVASION
She also said that it is impossible for the Kenya Revenue Authority to issue USIU-A with a tax-compliance certificate and at the same time put it under investigation for tax evasion.

In regard to governance, the universities law stipulates that all universities shall have a chancellor to grant degrees, diplomas and certificates among other awards of the university.

The senate in any university is concerned with academic programmes while the university council is charged with the day-to-day management of the institution.

The documents indicate that Prof David Some, head of the Commission for University Education, CUE, that is charged with inspecting universities, told the university that it had contravened the law because a university “must have a board of trustees, a university council and a sponsor”.

Prof Some insisted that the university council and the board of trustees must be distinct to pre-empt a conflict of interest.

Parliament is also investigating why the UISU-A charter is not clear on the tenure of the VC, and why Prof Brown spent more than two decades as the head of the university.

The law provides for public university vice-chancellors to hold office for a term of five years that is renewable, but private university charters are left to determine the terms of their VCs.

Regarding the entire investigations, Prof Brown said: “We cannot comprehend why a university that has been in Kenya for the last 45 years as a law-abiding institution is under investigation by Parliament.”

“We view these persistent queries from Parliament as an infringement on our rights as a private institution and wonder with alacrity where they are drawing their mandate from.”

AWARDED CHARTER

“Vice-Chancellor Brown has served USIU-Africa with distinction,” Dr Chandaria said, adding that “the board of trustees acted unanimously to commend Professor Brown for her exemplary leadership and the grace with which she has nurtured generations of USIU-Africa graduates.”

USIU was founded in 1969 as the Africa campus of USIU in San Diego, California.

Before moving to its current campus on Thika Road, the university operated from premises off Mpaka Road in the Westlands suburb in Nairobi.

According to information on its website, the university has 5,534 students representing 62 nationalities; 85 per cent of whom are local and 15 per cent are international. 

The university was first accredited in 1981 by the accrediting commission for senior colleges and universities of the Western Association of Schools and Colleges as part of USIU-San Diego.

It was, however, mandated to become chartered in Kenya with the gazettement of the Universities Act in 1985.

Regulations and procedures for the accreditation of private universities were published in 1989, and in 1999 USIU was awarded its charter as an independent institution through the Commission for Higher Education.