Public universities are increasingly digging into their savings to keep their doors open, with a seven-year review showing that none of the 22 institutions analysed managed to earn enough to meet its expenses in any year between 2018 and 2024.
The review of audited financial statements paints a worrying picture of institutions that have remained operational partly by using cash accumulated over time to meet the shortfall between their income and spending.
Moses Odero, who carried out the analysis with Dr Cliff Oirere and Dr Joseph Ndururi of the Catholic University of Eastern Africa, said the trend cannot continue if the universities are to remain financially stable.
The researchers called for the institutions to find ways of raising more regular income instead of depending on reserves to finance their operations.
“Without this transition, the continued erosion of reserves and efficiency will eventually lead to financial distress, despite current appearances of stability,” they said.
Egerton University was singled out as being in the most urgent position after its available cash was found to be insufficient to meet its operating expenses.
The researchers placed the university in a critical position because of its negative mean primary reserve ratio, which shows that its expendable net assets could not cover its operating costs.
“The case of Egerton University was particularly critical, with a negative mean primary reserve ratio, indicating that expendable net assets are insufficient to cover operating expenses. “Such a condition signals severe financial distress and raises concerns about institutional solvency and sustainability,” the authors said.
The review also showed that Multimedia University, Technical University of Kenya, Jomo Kenyatta University of Agriculture and Technology and the University of Eldoret were among institutions whose cash holdings were falling at a fast rate.
Moi University, meanwhile, was classified under the “moderate liquidity” group. The researchers said this placed it at greater risk if it faced unexpected financial shocks, although its situation was not as serious as that of Egerton, Eldoret, Technical University of Kenya, Jomo Kenyatta University of Agriculture and Technology and Multimedia University.
The findings suggest that the financial pressure facing public universities has persisted for years, with institutions repeatedly spending above their income and making up the difference from their reserves.
The researchers warned that using savings to sustain normal operations is not a lasting solution and urged universities to improve their regular income streams.
The latest findings add to concerns already raised over the financial health of public universities. In May last year, Head of Public Service Felix Koskei directed university managers to revive their institutions after investigations found that 23 public universities were technically insolvent.
“With 23 public universities technically insolvent, financial sustainability is an imperative