Catholic University in financial crisis after loss of Sh400 million
Poor management decisions and leakage of funds amounting to at least Sh400 million by former officials of the Catholic University of Eastern Africa (CUEA) have left the 32-year-old institution in a precarious financial position, the Sunday Nation can reveal.
From outside, the university, owned by the Catholic Church which sits on over 100 acres in the plush Karen neighbourhood in Nairobi, looks impressive with an estimated 10,000 students going about their business.
But for the last few months the university has been struggling to pay its bills as its new administration, barely six months on the job, struggles to climb the institution out of a financial hell hole.
And with hundreds of millions owed to workers, suppliers and creditors, insiders at CUEA are worried about the fate of the institution that has long been admired for its quality of education and for moulding its students along religious lines.
Currently, at least 100 part-time lecturers at the main campus are on a go-slow as the university has failed to honour an agreement it made with them in May to pay them Sh30,000 every fortnight until all their arrears are cleared.
The situation has made it challenging for the university to administer the ongoing end of semester exams as some have refused to invigilate until all their monies are paid. This is the second time they have protested the delayed payments this semester.
Part-time lecturers are paid Sh1,500 per hour to teach undergraduate students and Sh2,000 per hour to teach those studying for masters and doctorate degrees. The university has about 50 permanent lecturers at the main campus.
The current Vice-Chancellor, Prof Justus Mbae, took over from Monsignor Dr Pius Rutechura, a Catholic priest from Tanzania, who left before the end of his contract in May.
HONOURED BY POPE
A Monsignor is a priest who has distinguished himself and has been honoured by the Pope for his service to the church.
At that time official communication from the university was that Dr Rutechura had abruptly been recalled to his Diocese in Bukoba, Tanzania.
This was reported to have prompted the Association of Member Episcopal Conferences in East Africa, a caucus of bishops from eight countries in the region that does developmental projects on behalf of the Vatican, to hire the university’s first non-priest VC, surprising many.
The bishop’s plenary assembly takes place once in five years to assess the developments of the projects the church is running. It is during this time that appointments to key management positions are made.
However, investigations by the Sunday Nation show that Dr Rutechura, the Deputy Vice- Chancellor in charge of finance and the Chief Financial Officer were facing audit questions over the possible loss of millions of shillings.
During the audits done by Deloitte and Touche and Adept Systems, it was discovered that the university was losing close to Sh50 million per semester.
With at least 10,000 in three campuses who pay an average of Sh70,000 per semester. It means the university was losing most of the money collected in fees.
LEAKAGE FOR YEARS
It was a leakage that continued for years, with our sources raising questions on why it was allowed to continue for long. Our sources put the total figure of money suspected to have been lost in the last three years at Sh400 million.
“Due to this professional misconduct, the university was either making payments or owed lecturers money that is not genuine,” reads part of the audit.
Sources within the university, who spoke in confidence, said the over-reliance on priests over the years for most top management and administrative roles even when their capacity was in doubt could be responsible for some of the problems.
“Even if a priest has a few challenges with money he is not reprimanded or fired but subjected to internal disciplinary systems which often do not yield any results,” said our source.
He gave the example of the DVC (Finance), a Catholic Church brother, who was supposed to manage spending but did not perform as expected with several systemic failures identified.
DECLINED TO COMMENT
The university’s head of communications, Dr John Nyambega, declined to comment on the matter.
“Let us talk on Monday. I am away from the office,” he said through a text message on Saturday afternoon.
Nevertheless, the Sunday Nation has established that the decision to remove the three senior officials was made by the University Council which was headed by Bishop Maurice Muhatia of the Nakuru diocese after they realised that the institution was making too many payments to part-time lecturers.