Kirinyaga University operated seven bank accounts without approval from Treasury, according to an audit report.
A report by the Office of Auditor General (OAG) for the period 2019-2020 found that the university had balances of Sh94,714,985 in cash and bank deposits by the close of financial year in June 2020.
Auditor General Nancy Gathungu said the amount comprised of Sh21,998 and Sh94,692,987 in respect to cash balances and bank balances in seven commercial bank accounts.
"However, authority from The National Treasury to operate the seven commercial bank accounts was not provided for audit review contrary to Section 28(1) of the Public Finance Management Act, 2012 which states that The National Treasury shall authorise the opening, operating and closing of bank accounts and sub-accounts for all National Government entities. Under the circumstances, the University was in breach of the law," Gathungu reported in November last year report.
However, Kirinyaga University though marked as having an unbalanced budget could by then have been among the few public universities not suffering cash flow problems according to the report.
Gathungu reported that statement of comparison of budget and actual amounts reflected an approved revenue budget of Sh580.8 million and actual revenue of Sh604.4 million resulting to a revenue surplus of Sh23.6 million.
"Similarly, the statement reflects an expenditure budget of Sh614,127,000 and an actual expenditure of Sh603,068,236 resulting to an under expenditure of Sh11,058,764."
"The University's budget was unbalanced contrary to Regulation 33(c) of the Public Finance Management (National Government) Regulations, 2015 which states that the budget shall be balanced."
The approved revenue budget of Sh580,819,417 comprised of Sh368,321,037 in transfers from government and Sh212,498,380 in Appropriations-In-Aid (AIA).
Appropriation-in-Aid means is any revenue which a State government entity receives and is approved by Legislature by that entity to finance its activities.
"However, the approved budget reflected an amount of Sh154,148,475 in respect to AIA resulting to a variance of Sh58,349,905. The variance was attributed to increased student enrollment resulting to more fees."
However, the auditor noted that this was not approved by The National Treasury for spending in 2019/2020 financial year, meaning the institution was in breach of the 2018 directive that State corporations financed from the National Exchequer should consult their line ministries and ensure that the budget proposals are within the line Ministry ceilings.
The auditor also flagged two delayed construction projects at the university-based at Kutus township.
The university had a Sh309.9 million tuition complex project covering a contract period of 78 weeks commencing March 14, 2017, with an expected completion date of September 28, 2019. The expected completion period had been revised four times and was clocking 145 weeks by the time of the audit.
Another project was for the construction of a lecture theatre at Sh149.2 million over a period of 52 weeks commencing on May 29, 2017, with an expected completion date of May 28 2018. This was later revised to Sh178.9 million and the expected completion period revised five times to 202 weeks.
"The university risks incurring additional costs due to inflation and may not get value for money on the two projects as the facilities have not been put in use as planned."
She also flagged an expenditure of Sh4,631,687 under remuneration of the University Council which included an amount of Sh1.6 million in respect to sitting allowances.
The Auditor General also flagged lack of regional balancing in the staffing with 181 (77 per cent) of the 235 employees of the University found to be from the dominant local community.
