Moi University is grappling with a severe financial crisis after an audit revealed that employee expenses consumed nearly 85% of its total income, leaving little room for development projects, debt repayment, or operational stability.
According to the Auditor General’s report for the financial year ending June 30, 2025, the university spent KSh 5.12 billion on staff costs against total revenue of KSh 5.99 billion. This far exceeds the legal threshold that caps personnel expenditure at 35% of revenue.
The report paints a troubling picture of an institution struggling to stay afloat. Among the most striking findings is that part-time lecturers are owed KSh 221.5 million in unpaid salaries, with management reportedly encouraging some of them to offset the arrears against tuition fees for their dependants due to cash shortages.
Deficit widens despite restructuring efforts
The university posted a deficit of KSh 597.5 million during the period under review, pushing its accumulated losses to KSh 3.52 billion.
In an effort to reduce staff costs, Moi University hired a consultant at a cost of KSh 9.47 million to conduct a workforce rationalisation exercise. Acting on the recommendations, the institution issued redundancy notices to more than 800 academic and non-academic employees in May 2025.
However, the Employment and Labour Relations Court later overturned the layoffs, ruling that the process failed to meet legal requirements due to inadequate consultation with labour unions.
Major projects stalled despite millions spent
The audit also highlighted significant delays and deterioration in several infrastructure projects.
A student hostel project launched in 2018 remains unfinished despite receiving KSh 60.3 million out of a KSh 65.2 million contract value. Auditors who inspected the site in November 2025 found signs of vandalism, stolen electrical fittings, leaking roofs and structural damage after the contractor abandoned the project in 2021.
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Similarly, a School of Science complex, originally initiated in 1989 and revived in the 2019/20 financial year with a KSh 4.2 billion budget, has shown no physical progress despite KSh 100 million already being disbursed. The contractor has since sued the university for KSh 472.5 million, further increasing financial pressure.
An amphitheatre project worth KSh 395 million has stalled at around 30% completion despite payments of KSh 177.8 million. The university resolved to terminate the contract in March 2025 after it expired.
Meanwhile, a Digital Innovation Centre remains incomplete even after KSh 32.3 million was paid under a KSh 228.8 million contract that missed its completion deadline in November 2024.
Collectively, the four projects have consumed more than KSh 270 million in public funds while remaining unfinished, unused or deteriorating.
Mounting debts and unremitted deductions
The institution’s financial obligations continue to grow, with outstanding payables standing at KSh 9.01 billion. Of this amount, KSh 7.65 billion has remained unpaid for more than a year, while KSh 6.04 billion has been overdue for over three years.
Some creditors have resorted to legal action, including obtaining garnishee orders that resulted in the freezing of university bank accounts.
The audit further revealed that Moi University had failed to remit KSh 1.28 billion in statutory deductions already recovered from employees’ salaries. The unremitted funds include KSh 1.01 billion in PAYE, KSh 104 million owed to NHIF, KSh 91.4 million to NSSF, and KSh 67.9 million under the Housing Levy.
Financial position deteriorates
The university’s net assets fell sharply from KSh 1.48 billion to KSh 878 million during the review period, while its accumulated deficit continued to expand.
Compounding the situation, government funding declined from KSh 3.43 billion to KSh 2.9 billion, placing additional strain on an institution already battling cash flow problems, stalled projects and growing debt obligations.
The audit findings underscore persistent governance and financial management challenges within Kenya’s public university sector, where declining state support and operational inefficiencies continue to threaten institutional sustainability.
