Tough choices for new Egerton VC as university in the red

However, lately, the once stellar institution of higher learning has been in the news for the wrong reasons. Its corporate image has been seriously dented locally and abroad.

The university management board has been at loggerheads with the restless unions, as the industrial unrest intensified, with workers demanding better pay, while students push for a good learning environment.

The Universities Academic Staff Union (Uasu), Kenya Universities Staff Union (Kusu) Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers (Kudheiha) have clashed with the university management board and paralysed learning, leading to the closure of the university.

The university is in the red and is surviving on a shoestring budget, as funding from the government falls by the day, forcing the institution to incur massive debts running into billions of shillings.

Last year, an audit report on the university exposed an organisation that routinely flouts regulations, resulting in the deep financial crisis arising from fraud and mismanagement that has seen the institution struggle to meet its obligations. However, the management previously blamed the situation on insufficient resources from the government.

Ms Theodora Gichana, the inspector-general (Corporations) in her damning report, painted a picture of a chaotic institution that loses millions of shillings to fraud and incompetence.

According to the auditor’s report, the university may have lost up to Sh7.2 million for allowing an irregular change of mode of study of some students — from self-sponsored to regular programme.

Interestingly, the self-sponsored students, who have been the cash cow of the university, are fast exiting the university and the last batch will graduate next month, plunging the institution into a deeper financial crisis.

When the government increased the number of regular students joining the university, it dealt a major financial blow to the university from which it has never recovered.

The university, according to the report, has in the past flouted procurement procedures by irregularly renewing and signing flawed and forged performance bond contracts of companies without competitive bidding.

The university has also been on the spot for buying ICT equipment without adequate budgetary provision to meet the obligations of the resultant contract, contrary to the law.

The newly appointed vice-chancellor, Prof Isaac Ongubo Kibwage, 67, said the university was suffering from a historical financial problem that needs to be arrested to save the institution from collapse.

"What is ailing the university is the declining revenue stream, which is almost coming to zero, after the university stopped admitting self-sponsored students in 2017," said Prof Kibwage, who was appointed on October 5 as the sixth VC, ending months of anxiety at the institution.

The VC said the capitation from the government has been reduced by 30 percent.

"This is another major concern of our financial woes and we hope the government will listen to our proposals, which we have tabled to the relevant government offices, and increase the capitation," added Prof Kibwage.

Prof Kibwage further said that in the 2018-2019 academic year, the university was not funded for 3,822 students because of miscommunication between the university and the Kenya Universities and Colleges Central Placement Service (KUCCPS), which provides career guidance and selects students for admission to public universities.

"The university is owed close to Sh1 billion for non-funding of these students. This money, we believe is ours, and we need it for the university to meet its financial obligations. If this money comes, it will give us breathing space although it will not sort all our financial problems," added Prof Kibwage.

Prof Kibwage noted that with the increasing standards of living and nearly 2,000 workers getting their annual salary increment and Collective Bargaining Agreement (CBA) of 2017-2021 remaining a thorny issue, this was putting the university into an awkward financial position.

"We are addressing this by terminating contracts, which we do not need, as we do not have many student numbers. The university is likely to fall into deeper crisis if the government does not intervene," he said.

He continued: "The staff should understand we get 60 per cent from government and we supplement with 40 per cent to pay them full salaries. They should appreciate we are talking to the government to give us more funds. We need to work in harmony with a common purpose so that the university continues to move forward. If there is disruption, there will be a financial repercussion, which will affect them."

The university has not remitted non-statutory deductions amounting to Sh6 billion and many stakeholders, including pensioners, are up in arms as the university financial crisis deepens.

However, Prof Kibwage said the university management board has started negotiations with relevant government agencies such as the Kenya Revenue Authority (KRA) and Retirement Benefits Authority, Egerton University Sacco, among others, on the best way to clear the arrears.

"The challenge is that this debt of Sh6 billion keeps increasing every month due to interest. Some statutory deductions have an interest that escalates faster. It is beyond what an institution like Egerton University can do in the shortest term to generate money to make a difference. We have made a presentation to the government about the matter and we look forward to intervention," said Prof Kibwage.

The university has witnessed a major meltdown on several fronts due to poor remuneration of staff and lack of promotions.

Some unions like Uasu have gone to court to challenge the increased workload.

However, Prof Kibwage said: "Promotions are awarded to staff on merit and not targeted as claimed by the unions. Let the unions prove me wrong by giving a list of staff who are due for promotions and were not promoted because of bias. The unions should stop whipping up emotions to please their members."

The new VC has a load of shovelling to do to bring back some sanity at this institution. The friction and distrust between the VC and the unions are some of the sticky issues that Prof Kibwage must address.

“He must come up with other ways to clear the pending 2017-2021 Collective Bargaining Agreements (CBA), as well as pending salary arrears running into billions of shillings by looking into other avenues of generating income instead of waiting for capitation from the government,” said a lecturer.

"We have large idle land in Coast and Njoro campus and I have formed a committee to find the best way to use the resources to increase our revenue streams, besides looking into ways to attract more research funds to sustain the university," said Prof Kibwage.

After serving in an acting capacity, Prof Kibwage knows what "prescriptions" he can give for an ailing institution that is in red and will be required to bite the bullet and make hard choices to put the institutional on the path to financial integrity.

The runaway wage bill of more than Sh200 million a month for the nearly 2,000 employees, is one of the things he will look at.

"Seventy per cent of the university staff should be academic and 30 per cent non-academic. The university is addressing this and one of the solutions is non-renewal of contracts for non-academic staff whose services are no longer required," said Prof Kibwage.

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