The University of Nairobi (UoN) and Kenyatta University have a combined Sh4.3 billion financial deficit, Treasury revealed to Parliament last week.
UoN had a deficit of Sh2.17 billion in the year to June, up from Sh1.62 billion the previous year.
In the year ended June, KU’s deficit hit Sh2.13 billion up from Sh1.3 billion the year earlier.
In September, KU had its accounts frozen by Kenya Revenue Authority (KRA) over non-remittance of statutory deductions amounting to billions of shillings.
The institution of higher learning was then struggling with a debt of over Sh5.6 billion.
The university was said to have been collecting statutory deductions such as pension, salary taxes and health insurance contributions from its employees, without remitting them.
In a recent report, auditor-general Nancy Gathungu said that the university has been relying on short-term loans to stay afloat, which are extremely costly.
In the year to June 2019, KU’s deficit stood at Sh677 million, reducing accumulated surplus from Sh5.84 billion in 2019 to Sh4.5 billion.
Also, the University’s liabilities stood at Sh6.38 billion as of June 2020, putting it on the red against an asset base of Sh1.58 billion.
As for UoN, a report revealed that it owed Sh7.2 billion to KRA and Sh4 billion in staff pension arrears.
In a bid to cut cost, UoN has scrapped eight colleges and collapsed faculty functions from 35 to 11.
The institution has also doubled fees for postgraduate courses and parallel degrees. Accomodation fees has also gone up seven times.