KRA Freezes KU Bank Accounts Due to Insolvency

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According to Sunday Nation September 12, Kenya Revenue Authority KRA has for sometime been involved in a protracted court battle with the university and now had resorted to take this step after the institution completely failed to act.

In a detailed expose by the publication, it was established that the sh 2 billion is part of the sh 5.6 billion which the school owes so many entities and individuals.

Last month, according to the publication, workers at the school were paid by bouncing cheques causing a huge uproar within the institution.

Currently, the auditor general, confirmed that the institution is depending on short term loans to finance its activities in bits.

AG Nancy Gathungu, in her report, added that this situation is going to escalate even further if some rescue mission is not done now.

“The university is, therefore, technically insolvent and if no urgent positive measures are taken to improve the financial position, it may not be able to meet its mandate in future,” she said.

Gathungu revealed that the deficit which KU recorded in the year under review reduced its accumulated surplus from sh 5.84 billion in 2019 to 4.5 billion in 2020.

“Further, the current liabilities of Ksh6.38 billion as of June 30, 2020, exceeded the current assets of Ksh1.58 billion resulting in a negative working capital of Ksh4.8 billion,” Gathungu tabled a report in Parliament last August.

Though its not quite clear what could be affecting the many institutions around the country, its being claimed that low absorption rates, misappropriation and low funding are the contributing factors to this challenge.

For instance in July, Nairobi University UoN announced new fees structures to deal with the sh 7.2 billion debt it owed the taxman. This however saw students leadership take to the streets in protest.