Maseno University Faces Governance and Financial Challenges Amidst Lack of Permanent Chancellor

Maseno University is grappling with significant governance and financial issues as the institution has been without a permanent chancellor for the past five years. The term of the former chancellor, Michael Joseph, who was also the former Safaricom CEO and chairman, concluded on January 6, 2019. Despite recommendations from the university senate, no new chancellor has been appointed.

This leadership void has raised concerns about the validity of degrees and diplomas awarded by the university. A recent audit by Auditor General Nancy Gathungu highlighted the delay in appointing a permanent chancellor, implicating the State Department for University Education and Research in perpetuating the anomaly.

The audit report reveals that a special senate meeting on March 23, 2022, selected five nominees for the chancellor position. However, as of the time of the audit in February 2024, no action had been taken by the Principal Secretary for the State Department of University Education.

The lack of a chancellor is not the only issue plaguing Maseno University. The institution is facing severe financial difficulties, with a budget deficit of KSh560 million that was not reported in the financial statements. The audit indicates that the university reported a shortfall of KSh204 million for the fiscal year in question, resulting in liabilities amounting to Ksh569 million, which surpass the current assets of Ksh436 million. This has led to a negative working capital of Ksh133 million.

Auditor General Gathungu noted that the university’s senior management failed to disclose the material fact that the institution is technically insolvent and may face challenges in settling liabilities as they fall due. The cash shortage has become severe, with the university unable to pay off debts totaling Ksh104 million, some of which have remained unpaid for over 60 days.

The audit also uncovered issues related to statutory deductions, with Pay As You Earn (PAYE) totaling Ksh123 million for October 2022, February, and March 2023, being remitted after the due dates. Additionally, the university owes KRA a withholding tax amounting to Ksh3.8 million, with no explanation provided for the delay in remittance.

Further complicating the financial situation, the university has Ksh1.3 million spread across six dormant accounts, leading to ongoing bank charges and prompting an audit query. The university’s wage bill also exceeded legal limits, with Ksh2.4 billion disbursed in wages despite only garnering Ksh3.1 billion in revenue. According to the Public Finance Management (National Government) Regulations of 2015, spending on wages must not exceed 35 percent of revenue.

Maseno University has also faced criticism for failing to adhere to legal requirements regarding ethnic diversity. As of June 30, 2023, the university employed 1,143 individuals, with 741 belonging to the predominant Luo community. The NCIC Act of 2008 mandates that no more than one-third of the staff in public institutions can originate from any single ethnic community.

The ongoing challenges at Maseno University highlight the urgent need for effective governance and financial management to ensure the institution’s sustainability and credibility in conferring degrees and granting diplomas. The delay in appointing a permanent chancellor and addressing financial insolvency raises significant concerns about the university’s future.