Hardly a fortnight passes in Kenya without some allegation of financial impropriety emerging from its public universities.
For instance, Kenyatta University was slammed in March 2016 for offering its retiring vice-chancellor a package worth the equivalent of US$1 million. The institution said it wanted to reward Professor Olive Mugenda for excellent work during a decade at the helm. Mugenda declined the money. As her appointment was ratified by the government, she considered herself a public servant who was merely doing her job.
This controversy provided a rare peek into a public university’s financial affairs. Kenyan universities’ budgets have remained a fairly closed book since independence in 1963. The lack of transparency causes deep tensions. It’s time for Kenya’s universities to embrace a more democratic approach to their budgets.
The university landscape
The Kenyan government plays a role in managing public universities. It appoints university councils, which then make policy decisions and oversee institutional management. These councils also hire vice-chancellors and deputy vice-chancellors. The appointments are ratified by the government.
There has unfortunately never been an open, transparent approach to budgeting at public universities. Budgetary processes involve only university managers and Kenya’s national treasury. Lecturers, support staff and students are excluded. In this closed culture, universities have never developed internal policies that allow for financial transparency and accountability.
At independence Kenya had four public universities. But the higher education system has grown rapidly, particularly since the mid-1990s. There are now 33. These institutions are state owned but largely privately funded. This is necessary because of the growing gap between universities’ operating budgets and government financing, particularly as enrolments rise.
But the mix of state funding and market-generated revenues has thrown up a host of complex issues around budget making and the allocation of revenue. These issues are exacerbated by policy weaknesses at both government and institutional level.
Neither the government nor individual universities have specific policy guidelines to steer democratic budget making. The state has issued only general policy pronouncements. It doesn’t offer institutions any guidance on how to access private-sector funds. Nor does it empower university communities to understand investment strategies or revenue sharing. Budget making and revenue allocation remain the prerogative of university administrators.
Tension builds
This environment stands in sharp contrast with, for instance, universities in the US, where democratic principles are enshrined through a transparent budget office. Departments and units are required to make appropriate financial disclosures and they have budget-making tools. There are staff dedicated to helping with budget making. Planning and institutional research offices work with units and the budget office to set short- and long-term financial priorities.
There are consequences to Kenya’s lack of policy guidance and transparency. Universities are routinely disrupted because of financial misappropriation. The government is openly critical of universities’ investment priorities. For example, several institutions have established branch campuses in other countries without proper authorisation. They incur huge bank debts in the process by taking out development loans from commercial banks. But they use government guarantees as collateral, making the state liable if they default.
Salaries are another major bone of contention. In 2014 Kenyan vice-chancellors diverted money meant to cover salary raises across the board. They channelled these funds into non-priority projects and awarded themselves the equivalent of $5.04 million in salary increases. This was done at the expense of other university staff.
For the most part university administrators’ salaries remain top secret. Academics aren’t even privy to their bosses’ terms and conditions of service, let alone information about performance targets, bonuses or retirement benefits. This all leads to conflict and mistrust within university communities.
Democratising the budget process
Kenya’s universities can deal with this tension by adopting democratic principles when building and allocating budgets. Administrators, academics and students must all be involved in universities’ spending plans. Administrators must disclose their salary information to ensure that transparency and accountability start from the top. Their salaries and other terms of service should be disclosed publicly as soon as they’re hired.
This openness must extend beyond universities. Budgets and audited accounts should be made available to all Kenyans, preferably online where they are easy to access. This is a tradition in operation in many American universities.
Finally, every year vice-chancellors should deliver a public “state of the university” address. During these speeches they must be encouraged to speak openly about their institutions’ financial health.