The review shows a cash-strapped institution weighed down by billions in debt, stalled projects, irregular transfers of public funds and idle investments that have drained hundreds of millions of shillings.
Auditor General Nancy Gathungu says the university is struggling to stay afloat, with liabilities far exceeding assets and core systems crippled by weak controls and years of mismanagement.
In her review for the year ended June 30, 2025, Gathungu raised a dozen major concerns that collectively point to a serious crisis at the institution.
According to the audit, the university’s current liabilities stand at Sh11.4 billion against current assets of Sh4.27 billion, leaving a negative working capital position of more than Sh7.1 billion.
“The university is technically insolvent and may not be able to meet its current obligations as and when they fall due,” Gathungu said.
The university posted a deficit of Sh401 million during the financial year under review, pushing its accumulated deficit to Sh4.46 billion.
The audit further revealed that huge investments financed through public funds have remained idle for years, with no indication that they will generate any value.
Among the assets flagged is the university’s former Kigali campus in Rwanda, which was closed in December 2017, and the Westlands campus in Nairobi, shut a year later.
Despite the closures, JKUAT still holds assets valued at about Sh440 million linked to the campuses, including land worth Sh400 million and a building valued at Sh40 million.
The report noted there was no evidence of plans to utilise or dispose of the properties economically.
Two parcels of land in Rwanda’s Karembure area, acquired at a cost of Sh8.6 million and Sh11.2 million, respectively, were also found lying idle years after purchase.
The audit also questioned the university’s controversial investment in JKUAT Noodles Limited, also known as Nissin Holdings, a wholly-owned subsidiary into which the institution injected Sh358 million.
Gathungu found that the company had completely ceased operations, and all equipment remained unused at the time of the audit.
“The company discontinued operations, there was no production ongoing and the assets were not in use as at the time of the audit,” the report reads.
The auditor general warned the university “may not obtain value for money invested in the subsidiary company”.
Major infrastructure projects initiated by the institution were also found to have stalled or suffered extraordinary delays despite millions already being spent.
A boundary wall project awarded in 2013 stalled in 2015 after consuming Sh50.7 million, with no further construction undertaken since then.
The extension of the university administration block remained under implementation for eight years before the contract was eventually terminated.
The audit flagged an unexplained overpayment of Sh37.5 million above the project’s final cost.
Similarly, the College of Engineering and Technology lecture building, which commenced in May 2019 and was expected to take 18 months, was still incomplete by September 2025, with only 89 per cent of the work certified.
The report also exposed questionable movement of university funds across accounts without documentation or approval.
Gathungu identified irregular transfers amounting to Sh125 million from various campus fee collection accounts into a research grant project account, despite the project having already received donor funding.
“No documentary evidence or approval was provided to justify the transfer or any accountability for the utilisation of the funds after the transfer,” she said.
An additional Sh100 million in rental income from JKUAT’s Nairobi CBD campus was also irregularly transferred to a project account intended exclusively for grant funds.
The reliability of the university’s own revenue records also came into question.
Review of the Unisol ABN fee collection system revealed 337 missing invoices, raising concerns over the integrity of the institution’s Sh5.13 billion revenue records.
Although the system vendor attributed the gaps to cancelled invoices and network failures, the auditor general said she could not confirm “the accuracy, completeness and validity” of the revenue figures.
In another puzzling finding, the university spent Sh53.2 million on “rent and rates” for the Nairobi CBD campus despite owning the building outright.
“It was not established what the expense related to considering the building is owned by the university,” the report noted.
JKUAT was also faulted for failing to remit billions in statutory deductions.
Outstanding pension contributions for employees and the employer amount to Sh3.73 billion and have remained unpaid for more than seven years since October 2015.
PAYE arrears stood at Sh4.12 billion, including Sh870 million accumulated during the year under review.
Gathungu warned that continued non-remittance could expose the institution to heavy penalties and interest charges while placing management in breach of the law.
The audit further revealed the university’s wage bill had gone far beyond the legal threshold.
Staff costs consume about 72 per cent of total revenue, more than double the legally prescribed ceiling of 35 per cent.
According to the report, compliance with the legal limit would have reduced expenditure by about Sh2.8 billion.
The university was also cited for breaching national cohesion laws.
Out of 2,357 employees, 1,049 come from the same ethnic community, being about 45 per cent of the workforce and exceeding the one-third limit provided under the National Cohesion and Integration Act.
Only 57 staff members, roughly two per cent of the workforce, are persons with disabilities, far below the mandatory five per cent threshold.
Further concerns were raised over weak governance structures and poor internal controls.
The university was found to be operating at least seven standalone systems, including payroll, hostel management, student management and hospital management platforms, none of which are integrated.
Gathungu warned the fragmented systems have resulted in inefficiencies and operational weaknesses.
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