The Kenya Revenue Authority (KRA) has frozen the accounts of Kenyatta University over the institution’s non-remittance of statutory deductions amounting into billions of shillings.
Kenyatta University is struggling with a debt of over Ksh5.6 billion, of which Ksh2 billion is owed Ksh2 billion.
The university has been collecting statutory deductions such as pension, salary taxes and health insurance contributions from its employees, without remitting them.
In a bid to try to solve things, the management is said to have committed to pay part of the amount to KRA.
The management is yet to issue any information to the public about the development.
In a recent report, auditor-general Nancy Gathungu said that the university is relying on short-term loans to stay afloat, which are extremely costly.
“The university is therefore, technically insolvent and if no urgent positive measures are taken to improve the financial position, it may not be able to meet its mandate in future,” said Ms Gathungu.
In the year to June 2019, KU’s deficit stood at Ksh677 million, reducing accumulated surplus from Ksh5.84 billion in 2019 to Ksh4.5 billion.
Also, the University’s liabilities stood at Ksh6.38 billion as of June 2020, putting it on the red against an asset base of Ksh1.58 billion.
“Further, the current liabilities of Ksh6.38 billion as at June 30, 2020, exceeded the current assets of Ksh1.58 billion resulting in a negative working capital of Ksh4.8 billion,” Ms Gathungu told MPs.
As a result, the institution which for long has been perceived as an academic giant is unable to remit pensions and taxes amounting to Ksh3.67 billion, audit fees of Ksh8.1 million and other deductions worth Ksh342.9 million.