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NUL too broke to pay tax

Caswell Tlali

MASERU — The National University of Lesotho (NUL)’s financial crisis has deepened amid revelations this week that the institution owes the Lesotho Revenue Authority (LRA) more than M10 million in tax arrears.

The Sunday Express can reveal that NUL accumulated the arrears because it has not been paying tax on fringe benefits on medical aid, housing and other allowances for its staff.

The university pays two-thirds of monthly medical premiums for each of the more than 1 000 workers in its employ.

It also generously subsidises their housing.

Workers who stay in its 65 houses at the campus in Roma and Maseru pay less than M1 500 per month while those who do not have institutional accommodation receive housing allowances.

Yet for the past five years the university has not remitted tax on those benefits to the LRA.

And now the bill has ballooned to more than M10 million.

The LRA is now demanding that tax with interest but the university cannot pay because it is broke.

The other problem is that over the years the university has allowed staff to accumulate leave days that now run into hundreds.

The workers are now demanding that they be paid in cash for those leave days.

However, because that cost was never budgeted for in subvention received from the government last year, the university is unable to pay.

The Sunday Express can also reveal that the financial problems have been worsened by the fact that almost everyone at the university including unskilled workers receives 10 percent of their salaries as a skills retention allowance.

The senate and council are worried that should the allowances continue to be paid to everyone, including unskilled workers, the university’s wage bill will continue to skyrocket.

At the moment 85 percent of subvention fund the university gets from the treasury goes towards salaries and other staff emoluments.

The senate and council have said the budget must be re-jigged so more funds can be channeled towards capital expenditure to improve the university’s dilapidated infrastructure that has been strained because the college keeps taking more students than it can accommodate in hostels and classrooms.

There is a critical shortage of resources like chairs, books and other tools of learning.

But the call to realign the budget has courted vehement opposition from the Lesotho University Teachers and Researchers Union (Lutaru), a union that represents the academic staff at the university.

There is another headache for the university.

Under a 2005 agreement the management and the labour union agreed that there was need to close the salary gap between senior lecturers and associate professors.

That agreement was never implemented and the university now owes nearly M200 million in back-pays to senior lecturers.

Also, last year workers blocked an initiative by management to increase the staff house rental by 100 percent.

This has left the university in a fix because while the rentals remain low the cost of maintaining the houses has skyrocketed.

The houses are dilapidated and the workers say some of them are now inhabitable.

The money to repair those houses will have to come from the university coffers which are already almost empty.

The government’s decision to cut the number of students it sponsors has only worsened the university’s financial problems.

The problem is that while the number of students will be reduced that of workers at the university will remain as is and continue to gobble 85 percent of the already reduced subvention fund.

Yet that is not all.

Over the years staff salaries have increased annually based on either inflation or salary promotions.

The council is worried that there are employees being promoted to positions like senior secretary that do not exist within the university structures.

Also workers that improve their academic qualifications have been promoted to non-existent positions.

The result, the council worries, is that there are people who now earn salaries that are far over their positions and roles at the university.

So serious is the financial crisis that last year the university had to fund salaries from a bank overdraft, a sign that the college was not running its finances diligently and prudently.

The government is understood to have ordered the university to keep its financial books in order and live within its means if it wants to continue receiving subvention funds.

For the past six years the college failed to produce clean audited accounts.

The President for the Non-Academic Workers Union, Ntho ’Mota, has confirmed that the university owes the staff leave days.

’Mota said some workers are owed over a hundred days.

“For example, one of the workers in my office has accumulated 83 leave days,” ’Mota said.

“There are some who take up to four to six months on leave because the university has not given them off days for a long time,” he said.

’Mota however said he could not quantify the leave days in cash but “all I can confirm is that if they were to be paid the university will pay millions (of maloti).”

He said workers have been ordered to take leave en masse in an effort to deal with the problem.

NAWU will meet on Tuesday to discuss the matter further, he said.

A NUL council member, Mohau Ntlama, also confirmed that workers at the university have accumulated many leave days that if converted into cash run into millions.

He however said he was not aware of the debt the university has with the LRA.

“This has never been discussed in the council,” Ntlama said.

“Perhaps it is yet to be discussed,” he said.

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