Universities fail to declare billions of internal cash
Treasury secretary Henry Rotich. He says universities collections have been underperforming. PHOTO | FILE
What you need to know:
The Budget Policy statement covering the first half the financial year shows that internally generated funds, recorded an under-performance of Sh21.9 billion.
Treasury in November said public universities accounted for the largest share of the of the undeclared billions.
The law requires State agencies and ministries to first deposit their internal collections in the government’s main account before use.
Public universities and ministries failed to declare billions of shillings of internally generated cash in the six months to December.
The Budget Policy statement covering the first half the financial year shows that collections of ministerial Appropriations-in-Aid (AIA), or internally generated funds, recorded an under-performance of Sh21.9 billion.
Treasury in November said public universities accounted for the largest share of the of the undeclared billions.
“The AIA underperformance reflects a persistent problem, especially in universities collections, which is not adequately captured in the ministry’s expenditure return,” Treasury secretary Henry Rotich told Parliament in November.
The AIA, which stood at Sh25.8 billion against a target of Sh47.1 billion, is built from funds raised from the fuel levy and revenues generated by public universities.
The law requires State agencies and ministries to first deposit their internal collections in the government’s main account before use.
Universities have been collecting billions of shillings from increased student intake, aided by a rising number of self-sponsored students.
The number of students enrolled in universities grew 34 per cent last year, buoyed by the approval of new degree courses and the setting up of new universities.
Official data shows that the population of students in public universities has doubled over the past four years to 276,349 learners last year, from 139,740 in 2010.
The government is mulling increasing university fees to offer the institutions additional cash. Students currently pay Sh26,000 per year, a figure that has remained little changed since 1995.
Controller of Budget Agnes Odhiambo has already raised the alarm over failure by several ministries and agencies to account for their collections. Non-remittance of funds could open loopholes through which billions of taxpayers’ funds are lost or mismanaged.
This comes at a time when the Kenya Revenue Authority missed tax revenue collection targets by Sh23.5 billion, negatively impacting on the national budget.
The Treasury is projecting a full year revenue shortfall of Sh17.8 billion as it faces additional expenditures amounting to Sh61.7 billion, noted the budget policy document.
Already, Treasury has suspended a number of projects, such as implementation of the new Civil Servants Pension Scheme, and cut down on wasteful spending, especially on foreign travel and hospitality.
In the six months to December, KRA’s collection of income tax was Sh12.2 billion short of the Sh251.4 billion target.
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Note: The results are not exact but very close to the actual.
