Nairobi News


Multimedia and UoN in deep debt crisis, auditor reveals

The University of Nairobi (UoN0 is broke and cannot meet its financial obligations unless it receives support from the government and lenders, according to the latest audit report tabled in Parliament.

Also caught up in a financial crisis is Multimedia University (MMU), which the auditor-general says is technically insolvent and its continued operation depends on support of its creditors, bankers and the government.

According to the audit report, UoN’s financial statement as at June 2018 reflects current liabilities of Sh5.7 billion, while assets stand at Sh4,2 billion, resulting in a negative working capital of Sh1.4 billion.


During the period under review, Auditor-General Edward Ouko noted in the report tabled in Parliament that the university was unable to meet its financial obligations.

Mr Ouko said the UoN was unable to remit PAYE [Pay As You Earn] of Sh282 million, NSSF Sh3 million, NHIF Sh10 million, Chuna Sacco Sh204 million and Helb Sh1.5 billion.

According to the report, the university management attributed the debts to a decline in capitation from the parent ministry, a decline in student enrolment in Module 2, strikes by the academic staff and the prolonged presidential election, which led to the university’s closure.

“The university, therefore, is apparently facing financial problems and its continued operations as a going concern will continue to depend on the support of the government and lenders,” reads the report, which indicates that the outstanding students’ debt for the last one year stands at Sh871 million.

The auditor expressed concern at the debts’ recoverability.

The report, however, warned students that Section 8.1 of the university’s Financial regulations states that the institution shall withhold any and all services, examination results, conferment of any degree, certificate or award until all outstanding fees are settled.


The auditor also raised concern that the public may not get value for their money for the stalled students’ hostel at the Lower Kabete campus.

He noted that the project that started in 1990 stalled in 1992 and the contract was mutually terminated in 2000. At the time of termination, the university owed the contractor Sh50 million, which has remained unpaid to date.

The contractor has since gone to court and claimed the money plus interest and other costs.

A site visit of the project by auditors unveiled cracks in the columns and beams as well as chemical and physical damage.

“Completion of this stalled project would provide secure accommodation for students, who are currently seeking accommodation in surrounding areas,” reads the audit report.

Mr Ouko said that Multimedia University recorded a deficit from 2017, which stood at Sh742 million as at June 30,2018. “Further, the statement of financial position reflects current liabilities of Sh944 million against current assets of Sh237 million resulting into a negative working capital of Sh707 million.

“At the same time the university was unable to meet its financial obligations as and when they fell due,” reads the report.

Mr Ouko said the university was unable to remit pension and taxes amounting to Sh242 million and Sh331 million, respectively, to the beneficiaries, thereby risking fines and penalties.