Economy

Yatani gives varsities, parastatals days to clear pending bills

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Treasury Secretary Ukur Yatani: Time is up. FILE PHOTO | NMG

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Summary

  • Minister orders State agencies to remit deductions not later than June 30.

The Treasury has directed public universities to clear statutory deductions by Tuesday next week or risk sanctions that include withholding cash disbursements.

Treasury Secretary Ukur Yatani said State corporations and semi-autonomous agencies (Sagas) that include public universities have failed to give priority to paying pending bills, prompting the latest directive.

Mr Yatani said the directive also covers deductions to all sacco and staff loan deductions made by the various State entities in the latest bid to enforce compliance in payment of pending bills.

The directive is set to hit hard the cash-strapped public varsities whose pending bills that include pay-as-you-earn (PAYE) National Social Security Fund (NSSF), National Hospital Insurance Fund (NHIF), Higher Education Loans Board (Helb), pension and sacco deductions have accumulated to Sh19 billion.

“Accumulation of liabilities (pending bills) not sanctioned by law is expressly prohibited and may invite punitive actions against those responsible…”

“State corporations are required to settle by June 30, 2020, all unremitted sacco staff and loan deductions, all statutory deductions (PAYE, NSSF, NHIF and pension arrears),” Mr Yatani said in the circular to all accounting officers of State corporations and semi-autonomous agencies.

Mr Yatani warned that failure to pay up will be a breach of law and attract penalties in line with provisions of the Public Officer Ethics Act of 2003 and the public service code.

This means that public universities have barely a week to to implement the order with the University of Nairobi topping the list with Sh5.5 billion, followed by Jomo Kenyatta University of Agriculture Technology and the Technical University of Kenya at Sh3.5 billion each.

Egerton University has not remitted Sh2 billion while Moi University has Sh1.3 billion in the pending bills.

The directive comes a year after the Retirement Benefits Authority warned six public universities they risked seizure of assets after failing to remit deductions then estimated at Sh5 billion to build workers’ retirement funds.

The RBA said the universities could lose assets such as land and homes to pension schemes on failure to clear the arrears that should not exceed six years.

Universities are in a cash crunch after student population dropped, adversely affecting the lucrative parallel degree courses in which students paid fees based on market rates.