Parliament has rejected a Sh250 million proposal for additional funding to a private university to plug its capitation deficit hole, saying the request is unjustified.
The Treasury had proposed to increase the allocation to Church-owned Uzima University to cater for outstanding capitation for government-sponsored students in the 2022/2023 supplementary budget.
MPs, however, questioned the rationale for increasing the budget to cater for the students, who had already completed their studies at the institution.
“This allocation to only one university is unjustified given the other universities also have the pending bills,” said the National Assembly Committee on Education in its report.
The Ministry of Education in its presentation to Parliament noted the Kisumu-based university had requested additional funding of Sh607.8 million but Treasury only approved Sh250 million in the year to June.
State funding to universities is based on the differentiated unit cost (DUC) model under which institutions get allocations based on the number of undergraduate students registered on the regular programme and the kinds of courses they take.
Private universities currently have a total of 78,650 government-sponsored students with a DUC requirement of Sh12.28 billion against a budget allocation of Sh3.37 billion (21 percent of the DUC).
In December, private universities threatened to stop admitting GSSs in the wake of under-funding from the Treasury that has deepened cash flow hitches in the institutions.
The Vice-chancellors at the institutions noted that the current funding formula has unfairly cut the amount of money they received per GSS, forcing them to incur extra costs compared to their public counterparts.
The funding gap for GSS students in private universities stood at Sh24.38 billion in the year to June 2021 and is expected to widen as new students enrol.
Private Universities started admitting GSS in 2017 in a move by the government to address congestion in public institutions of higher learning.
This has however come to haunt the private universities who just like their public counterparts, are now grappling with cash-flow woes.
Pending bills by public universities nearly doubled in a span of one year to Sh56.1 billion in the year to June 2022 amid a falling student population and declining government capitation, worsening their financial crisis.
In the recently released 2022 KCSE results, the number of candidates that scored C+ and above rose 19 percent to 173,345, compared to 145,776 recorded in 2021, 143,140 in 2020 and 125,746 recorded in 2019.
These candidates qualify for government sponsorship which is allocated through the Universities Fund (UF) after placement by the Kenya Universities and Colleges Central Placement Service (KUCCPS).
The lawmakers have questioned the rationale for the government’s policy of funding operations in private universities at a time public universities are grappling with a cash crunch.
