Public Universities Grapple with Escalating Financial Crunch Amidst Enrollment Boom
Public universities in Kenya are facing an exacerbated cash crunch, with unpaid salaries, wages, retirement benefits, and medical cover soaring by 21.46% to Sh45.33 billion in the last financial year. This substantial increase in pay arrears for both current and former employees, along with entitled social benefits, underscores a deepening financial crisis within the higher education sector.
University administrators now find themselves grappling with a significant financial challenge, coinciding with a historic surge in the number of candidates meeting the minimum entry grade, surpassing 200,000 for the first time.
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According to data from the Higher Education and Research department, unpaid wages to university employees reached Sh33.50 billion, constituting over half of the total pending bills.
Notably, employees’ pay arrears saw a 16.10% growth compared to the previous year, reaching Sh28.85 billion. The overall pending bills across approximately 42 public universities and university colleges rose by 16.66% year-on-year to Sh61.25 billion, as revealed in the budget review report.
This surge in compensation to employees has sparked conflicts between university administrators and staff unions. Notably, unions like the Universities Academic Staff Union (UASU) and the Kenya Universities Staff Union have initiated strikes in institutions like Egerton and Moi, causing disruptions in the learning environment due to unpaid wages.
The root cause of this financial strain has been linked to a lower per capita budgetary allocation despite the growing enrollment of government-sponsored students. The surge in enrollment follows a policy shift by the previous administration, partly sponsoring all students meeting the minimum entry grade of C+ in Kenya Certificate of Secondary Education (KCSE) examinations.
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Higher Education Principal Secretary Beatrice Inyangala pointed out that inadequate funding has led to defaults in remitting statutory deductions, such as payroll taxes, to the Kenya Revenue Authority. The failure of the previous administration to release up to 32% capitation to the institution’s estimates for the financial year ending June 2023 has compounded the financial challenges.
The data also reveals a notable increase in accrued social benefits, not remitted to statutory bodies, reaching Sh11.83 billion in the fiscal year ending June 2023. The Higher Education and Research unit will be presenting the arrears accrued between June 2005 and June 2022 to the Pending Bills Verification Committee chaired by former Auditor-General Edward Ouko on January 31.
As universities grapple with these financial challenges, the funding pressure is expected to intensify from September, with an anticipated increase in enrollment following a 16% growth in candidates meeting the minimum university entry requirements in the last year’s KCSE, reaching 201,133 students.
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The financing dynamics for universities are evolving, with the Treasury emphasizing a student-centered approach in the draft 2024 Budget Policy Statement. The shift aims to deploy a rigorous, impartial means-testing instrument to determine students’ financial needs, forming the basis for allocating scholarships and loans.
Public Universities Grapple with Escalating Financial Crunch Amidst Enrollment Boom