The Technical University of Kenya (TUK) is unable to pay staff salaries in full, becoming the latest public university to be hit by a cash crunch caused by delays in funding from the National Treasury.
An internal memo from Stephen Karanja, the university's deputy registrar for human resources and registry, shows that staff on grade V and above were paid 65 percent of their July salaries. Only those on Grade IV and below received their full salaries.
The institution joins Moi University in publicly acknowledging the renewed financial crisis, attributing it to reduced student fees, adding that it will clear the arrears as soon as funds are available.
Public universities have been grappling with delays in receiving funds from the National Treasury, despite adopting a needs-based funding model, which has hit them hard and exacerbated a financial crisis that has been building for years.
“The university has received a reduced capitation amount for July 2024, this reduction has unfortunately created a deficit in our ability to pay the full salary for our staff in the month of July 2024,” Mr Karanja says in the memo dated August 13, 2024.
“As a result of the challenges, the university has been unable to disburse the full salaries for July 2024 to all staff. The balance will be paid once funds are available.”
Public universities have been in a financial hole over the years, a problem caused by delayed student capitation payments from the National Treasury under the old funding model, and also by mismanagement at some institutions.
The shortfall in the public universities' student capitation reached Sh68 billion two years ago, prompting the government to push for a new funding model, but this has been hampered by cash flow constraints at the National Treasury.
Kenya introduced the needs-based funding model to replace the differentiated unit cost, with the government insisting that the new formula is more student-centred.
The current problems are the first challenge the new funding model has faced, apart from the outcry from affected students over wrong placements in terms of their financial needs.
Charles Ochola, the vice-chancellor of Tom Mboya University, says a number of institutions are deep in the red, largely due to the delayed payment of the government's capitation, but exacerbated by management problems.
“There are universities that are not paying salaries in full, others are paying the net instead of gross salaries. Then some cannot pay salaries unless they get capitation and as we all know, this has been delayed,” he told the Business Daily.
“But it is both a question of how we prudently manage the little resources we get. Universities must focus on priorities in order to come out of this hole.”
