The University of Nairobi (UoN) has been given two weeks to provide documentary evidence explaining billions of shillings in unpaid pension contributions and tax obligations.
The directive was issued on Wednesday, October 28, by National Assembly Public Investments Committee on Governance and Education Chairperson Dick Maungu during a review of Auditor-General’s reports covering the 2020/2021 to 2024/2025 financial years.
UoN Vice-Chancellor Prof. Eng. Ayub Njoroge Gitau and other university officials appeared before the committee to address concerns over unremitted pension deductions, Pay As You Earn (PAYE) taxes and plans to settle the institution’s growing financial liabilities.
However, lawmakers expressed dissatisfaction with the explanations provided by the university’s management, insisting that the claims be backed by verifiable records.
Maungu challenged the officials to produce documents showing the measures taken to clear the outstanding obligations, maintaining that verbal assurances were insufficient.
“There’s nothing to support the good stories,” Maungu told the university representatives, demanding evidence of progress in addressing the arrears.
MPs Question Accumulation of Pension and Tax Arrears
The committee’s inquiry followed findings by the Office of the Auditor-General indicating that UoN had failed to remit approximately KSh4 billion in pension contributions and KSh50 million in PAYE taxes during the 2021/2022 financial year alone.
Lawmakers also examined arrears accumulated over previous financial years, questioning why deductions taken from employees’ salaries had not been transferred to the relevant pension schemes and tax authorities.
Kasipul MP Boyd Were warned that penalties and interest could further increase the university’s outstanding tax liabilities if the amounts remained unpaid.
Lungalunga MP Chiforomodo Mangale also demanded an explanation for the accumulation of pension and tax debts, questioning how the liabilities had reached billions of shillings.
Mangale cautioned that the committee would not accept explanations unsupported by evidence, saying lawmakers needed to establish the circumstances behind the institution’s financial difficulties.
“We are not here to sanitise issues. We need to get to the root of what happened,” he said.
Central Imenti MP Moses Kirima called for a thorough investigation into the university’s finances, drawing comparisons with concerns previously raised over financial management at Moi University.
Kirima urged the committee to establish whether weaknesses in financial controls and management had contributed to the growing liabilities.
UoN Considers Selling Assets to Clear Pension Debt
Responding to the concerns, Vice-Chancellor Gitau said the university had started paying pension benefits to retiring employees and had resumed remitting pension deductions in recent months.
He nevertheless acknowledged that the institution continued to face a substantial pension deficit and was working with trustees of the relevant pension schemes to develop a strategy for clearing the arrears.
Gitau disclosed that the deficit had grown from approximately KSh5 billion to more than KSh10 billion.
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To raise funds, the university was considering commercialising some of its land and other assets to help settle its pension obligations.
The vice-chancellor also revealed that the government owed UoN slightly more than KSh3 billion in outstanding funding and payments linked to the Higher Education Loans Board (HELB).
According to the university management, the amount owed by the government had fallen from nearly KSh5 billion to just over KSh3 billion. However, the outstanding payments continued to place pressure on the institution’s finances.
University Engages RBA and KRA Over Outstanding Payments
Deputy Vice-Chancellor for Finance, Planning and Development Prof. Josiah Omollo Aduda told the committee that UoN had submitted a remedial payment plan to the Retirement Benefits Authority (RBA) to address the pension arrears.
Aduda added that the university was engaging the Kenya Revenue Authority (KRA) over the unpaid taxes and had held discussions with the relevant agencies to establish how it could meet its statutory obligations.
The committee’s directive places the university under pressure to provide documentary evidence of its proposed recovery measures and account for the accumulation of the outstanding liabilities.
The development comes amid wider financial challenges facing public universities, including mounting obligations to employees, pension schemes and government agencies.
