Universities Fund faces Sh9.6 billion deficit as pending bills soar to Sh72.2 billion

The Universities Fund (UF) has admitted facing a Sh9.6 billion funding deficit, despite receiving Sh16.5 billion for student scholarships in the current financial year.

In a session on Tuesday with the National Assembly Committee on Education, the Fund told legislators the financial gap has strained its ability to clear pending bills now standing at Sh72.2 billion.

Appearing before the committee during an oversight visit to the agency’s headquarters in Nairobi, UF acting CEO Edwin Wanyonyi revealed that the agency received Sh16.5 billion for scholarships and Sh342 million for operational expenses. However, the deficit of Sh9.6 billion has hindered the settlement of outstanding payments owed to universities.

“Universities Fund received Sh16.5 billion for student scholarships and Sh342 million for operational expenses. With a deficit of over Sh9.6 billion,” Wanyonyi said.

The committee expressed concern after learning that private universities are reportedly owed nearly the same amount as their public counterparts, despite having far fewer students.

“Are you sure about your figures? How can the amount owed to private universities be almost equal to what is owed to public ones when the student numbers don’t match? Even the Auditor-General’s special audit report flagged overpayments to private universities,” committee chairperson Nabii Nabwera said.

Legislators instructed Wanyonyi to explain the discrepancies and submit a detailed institution-by-institution report on pending bills.

Moiben Constituency MP Phyllis Bartoo questioned the overlapping mandates between UF and the Higher Education Loans Board (HELB), saying: “From your submissions, this feels like a duplication of HELB’s work.”

In response, Wanyonyi clarified that UF handles scholarships and capitation to institutions under the New Funding Model (NFM), while HELB focuses solely on student loans.

According to the Fund, the NFM, introduced in 2023, bases allocations on students’ financial need and academic programmes. In the 2024/25 financial year, the Fund disbursed Sh40.5 billion to support 559,636 students, with Sh16.9 billion released through NFM and Sh23.6 billion under the Differentiated Unit Cost (DUC) model to 40 public universities.

Wanyonyi also highlighted the Fund’s digital transformation, including a new data management system and secure institutional portal aimed at improving transparency and disbursement efficiency.

However, MPs criticised the portal’s accessibility, noting students are facing delays in accessing services.

“What are you doing to improve the interface with students? Our children struggle to access the system, it sometimes takes over a week,” Teso South MP Mary Emaase said.

The committee further demanded clarity on how the Fund applies equity and marginalisation metrics in funding allocations, and its collaboration mechanisms with HELB, the Kenya Universities and Colleges Central Placement Service (KUCCPS) and other agencies.

While acknowledging UF’s strides in rolling out the student-centred model and expanding access to higher education, the committee cited unresolved financial gaps and inadequate staffing as critical setbacks.

Wanyonyi admitted that UF operates at 60 per cent of its approved staffing levels and is awaiting approval for revised salary structures.

The Committee on Education directed UF to submit a detailed breakdown of pending bills and reconcile its data with the Auditor General’s findings, pledging to escalate the matter to the Ministry of Education and the National Treasury for intervention.