The Auditor-General’s performance audit report on the management of unclaimed financial assets paints a disturbing picture of non-compliance and neglect. Five leading public universities, including the University of Nairobi, Moi, Egerton, Maseno and Kenyatta, have collectively failed to remit Ksh 2.6 billion in unclaimed financial assets to the Unclaimed Financial Assets Authority (UFAA)
By TWV Team
A damning audit report has unearthed a financial scandal running deep within Kenya’s public universities , billions of shillings in unclaimed student funds lying idle for years, with some institutions quietly using the money to prop up their cash-strapped operations.
The Auditor-General’s performance audit report on the management of unclaimed financial assets paints a disturbing picture of non-compliance and neglect. Five leading public universities, including the University of Nairobi, Moi, Egerton, Maseno and Kenyatta, have collectively failed to remit Ksh 2.6 billion in unclaimed financial assets to the Unclaimed Financial Assets Authority (UFAA).
The funds, largely made up of caution money and overpaid fees, should, by law, be remitted to UFAA if unclaimed for more than two years after graduation or clearance. Instead, auditors found that five of the eight universities sampled had neither traced nor notified former students entitled to refunds.
“The review revealed that public universities held unclaimed financial assets worth Ksh 2.6 billion due for remittance to the Authority,” the report states, noting that some institutions were unable to explain the whereabouts of these funds.
The University of Nairobi topped the list, holding unclaimed funds amounting to Ksh 2.3 billion, while Moi University retained Ksh 171.4 million. Egerton, Maseno, and Kenyatta universities each held tens of millions in unremitted deposits, all of them in breach of statutory obligations.
To compound matters, the universities have been slapped with penalties totalling Ksh 411.7 million for non-compliance. In some cases, the fines imposed by the Authority were higher than the unclaimed amounts themselves, a staggering revelation that exposes the depth of institutional indifference.
For instance, Maseno University was fined Ksh 74.6 million, 183 per cent higher than its unclaimed Ksh 40.6 million. Egerton University faced penalties amounting to Ksh 39.1 million against assets worth Ksh 30.3 million, while Moi University’s Ksh 171.4 million in unclaimed funds attracted a fine of Ksh 211.4 million.
“The hefty penalties resulted in non-closure of the assets, with holders failing to surrender the identified funds or provide evidence that they were not unclaimed,” the audit observed. Even more alarming, auditors discovered that some universities facing financial distress had diverted refundable deposits for operational activities, effectively spending money that did not belong to them. “This resulted in the accumulation of refundable deposits that had not been remitted to the Authority,” the report added.
The Auditor-General, Nancy Gathungu, faulted both university managements and the UFAA for lax oversight, warning that such practices erode public trust and deny rightful owners access to their money.
The revelations come at a time when the higher education sector is reeling under financial strain and labour unrest. As the report was tabled, university lecturers and staff entered their fourth week of strike, accusing the government of failing to honour Collective Bargaining Agreements (CBAs).
Education Cabinet Secretary Julius Ogamba told Parliament that the strike was “unprotected and unjustified”, citing a court order halting the industrial action. He maintained that the government had already disbursed Ksh 9.76 billion towards the 2021–2025 CBAs and accused unions of “misleading their members for political mileage.”
Still, for students and parents, the question remains: how could billions of shillings, meant for refund, vanish into university coffers without accountability? The audit trail suggests a systemic rot that may take more than fines to clean up.
