According to the report issued by the university, the school was on the brink of collapse if it does not receive the much-needed government bailout funds.
The latest audit report tabled in Parliament which shows the university’s statement of the financial position as at June 2018 revealed current liabilities of Sh5.7 billion and current assets worth Sh4.3 billion, resulting in negative working capital of Sh1.4 billion.
For the year ending June 2018, the Auditor-General Mr. Edward Ouko’s report tabled by Majority Leader Aden Duale showed that the university was unable to pay what it owes.
In a report made available by Daily Nation, Mr. Ouko said, UoN was unable to remit staff payments including Sh282 million for Pay As You Earn (Paye), Sh3 million for National Social Security Fund, Sh10 million National Hospital Insurance Fund, Sh204 million Chuna Sacco and Sh1.5 billion Higher Education Loans Board.
Mr. Ouko said the institution is “facing financial problems and its continued operations as a going concern will continue to depend on the support of the government and lenders.”
The revered citadel of learning has given the reasons for the present condition as the recent decline in capitation from the Education ministry, drop in student enrolment, academic staff industrial action and the prolonged presidential election that had forced it to close early last year.
Mr. Ouko further said that outstanding students’ debts for the 2017/2018 financial year stood at Sh871 million and expressed concern about the recovery of the debt.
The auditor also raised concern that the public may not get value for money for the stalled students’ hostel at the Lower Kabete campus. Construction began in 1990 and stalled two years later. The contract was mutually terminated in 2000.
At the time of termination, the university owed the contractor Sh50 million, which remains unpaid to date, the audit report notes. The contractor has since gone to court and claimed the Sh50 million plus interest and costs.
Auditors who visited the project site found visible cracks in the columns and beams, as well as chemical and physical damage.
“Completion of this project would provide secure accommodation for students currently seeking accommodation in surrounding areas,” the report states.