Rongo University workers face the grim reality of retiring without their pension savings due to the institution’s failure to remit monthly contributions to pension schemes.
According to the latest audit conducted by Auditor General Nancy Gathungu, the university has an outstanding balance of KSh 231 million, which includes payroll creditors of KSh 179 million.
The report, covering up to June 30, 2023, highlights an unremitted amount of KSh 163 million owed to the pension fund.
“As of the time of audit in January 2024, the management had settled KSh 38 million, leaving an outstanding balance of KSh 125 million,” the report states.
Ms. Gathungu cautioned that the university risks incurring avoidable costs in the form of penalties and compounded interest due to this delay.
Citing Section 53A (1) of the Retirement Benefits Act, she pointed out that it is an offence for an employer to fail to remit deductions from an employee’s salary to a retirement benefits scheme within 15 days of the deduction.
“The scheme may institute proceedings for recovery of the deduction after giving the employer at least seven days’ notice,” she added.
The disclosure of these unremitted contributions highlights a growing crisis in the pension industry, where deductions are made but not paid.
Delayed Projects and Financial Mismanagement
In addition to the pension crisis, Rongo University has been flagged for the slow implementation of critical projects.
A local contractor awarded a KSh 1.3 billion contract in 2019 to construct facilities over two years has yet to complete the project.
A physical verification in December 2023 revealed that the project remains unfinished, with the contract period extended to a new completion date of February 5, 2025.
Also affected is a KSh 4.5 million fish pond project, with only 45% of the work certified as of June 30, 2023.
“At the time of audit verification, the contractor was not on site, indicating that the project may have stalled,” noted Ms.
Gathungu, raising concerns that these delays have severely impacted service delivery to the university community.
Breaches in Financial Management Policies
The audit report also accused Rongo University of breaching its Financial Management Policy, with overdue student debtors totaling KSh 62 million.
A review of records showed that student debts amounting to KSh 26 million had been outstanding for more than 30 days as of the February 2024 audit.
The university has also been criticized for an unsustainable wage bill, contravening Public Financial Management regulations by spending 74% of its expenditure on wages and remuneration allowances, instead of the recommended 35%.
Furthermore, the audit revealed that the university breached laws regarding ethnic diversity by employing 72% of its staff from the dominant ethnic community in Migori County, thereby failing to comply with statutory requirements on ethnic composition.
Management Unresponsive to Queries
Attempts to obtain a response from the university’s management were unsuccessful, as they did not answer calls or respond to text messages.
The University now faces a challenging period ahead, as lack of accountability, policy compliance, and improved project management continues to grow deep.
About the Author
