Degrees and diplomas conferred by Maseno University could be called into question due to the absence of a substantive chancellor. The university has lacked a substantive chancellor for the past five years following the end of the term of former Safaricom CEO and chairman, Michael Joseph.
Joseph was appointed in January 2014 for a five-year term, which concluded on January 6, 2019. Since then, no one has been appointed to the position despite recommendations from the university senate. A new audit has criticized the State Department for University Education and Research for perpetuating this issue.
Auditor General Nancy Gathungu highlighted the delay in appointing the top official in a review of the university’s records as of June 30, 2023. “In the circumstances, the effectiveness of the university’s overall governance and its core mandate of conferring degrees and granting diplomas could not be confirmed,” the auditor general said.
The latest review indicated that a special senate meeting on March 23, 2022, selected five nominees for the chancellor’s position. These names were communicated to the Principal Secretary for the State Department of University, who has yet to act on them. “As of the time of the audit in February 2024, no appointment had been made,” the auditor general noted.
Additionally, the university’s top managers have been criticized for not disclosing that the university is financially troubled. Gathungu’s review found that the university had a budget deficit of Sh560 million, which was not reported in the financial statements.
The university recorded a deficit of Sh204 million during the year under review. Its liabilities of Sh569 million exceed its current assets of Sh436 million, resulting in a negative working capital of Sh133 million.
“However, management did not make any disclosure… of the material fact that the university cannot sustain its services in the foreseeable future,” the auditor general said.
The varsity bosses also did not state the mitigating measures they had taken to reverse the financial mess at the university.
“The university is, therefore, technically insolvent and may face financial challenges in settling liabilities as and when they fall due,” Gathungu said.
The cash crisis is already biting amid revelations that the university is unable to settle debts of Sh104 million.
Some of the debts, up to Sh72 million, had been outstanding for more than 60 days at the time of the review.
“No explanation was provided as to why these creditors had not been settled as at June 30, 2023,” the report reads.
“The university management risks incurring extra costs on penalties and litigation due to delayed payments,” Gathungu said.
Auditors further found that the university is struggling to meet expenses for statutory deductions.
During the year under review, Pay as You Earn for the months f October 2022, February and March 2023, totaling Sh123 million, were remitted late.
The university also owes KRA Sh3.8 million in withholding tax.
“No explanation was provided as to why the withholding taxes were not remitted to the commissioner of domestic taxes at the time of payments to the suppliers and contractors. In the circumstances, management was in breach of the law,” Gathungu said.
While the cash crisis persists, the university was found to be holding Sh1.3 million in six dormant accounts, sparking an audit query as the accounts continue to incur costs in bank charges.
“In the circumstances, value for Sh1,260,079 held in dormant accounts could not be confirmed,” the auditor said, further flagging breach of public finance laws on payment of salaries.
The Public Finance Management (National Government) Regulations, 2015 stipulate that expenditure on wages should not exceed 35 percent of revenue. Maseno University has also been criticized for non-compliance with laws regarding ethnic composition.
As of June 30, 2023, the university employed 1,143 staff members, with 741 from the dominant Luo community. According to the NCIC Act 2008, public offices are required to reflect the diversity of Kenya’s population in their staffing. Public institutions are prohibited from having more than one-third of their staff from the same ethnic community.
