Revealed: Kenya Institute of Management in financial crisis

Students of Kenya Institute of Management (KIM)during a graduation ceremony.

By John Mbaria & Muchemi Wachira
newsdesk@dailyreporter.co.ke
Kenya Institute of Management’s (KIM) the country’s flagship management training institution is in a financial crisis, the Daily Reporter, can reveal today.
According to investigations and multiple interviews, the institution is facing what insiders say is massive indebtedness and gross mismanagement by top leadership.
However, KIM’s Chief Executive Officer, Mr David Muturi, has denied the allegations.
Mr Muturi attributed the organisation’s financial crunch to ordinary shocks and pressures that occasionally grip companies and organisations.
According to documents seen by these writers and interviews with different stakeholders KIM is facing difficulties in meeting some of its statutory obligations that include paying suppliers, rent for its various premises, and staff salaries.
These bills are estimated to have accumulated to more than Sh 400 million.
Documents show that at some point, KIM was taken to the Commissioner of Cooperatives for failing to remit staff SACCO deductions amounting to about Sh30 million .
In an attempt to address this, the Commissioner ordered KIM’s bankers to transfer the money to an account belonging to KIMSAVE, the staff’s SACCO.
And according to minutes of a meeting held at KIM in Nairobi on May 26, the Institute’s debts had accumulated to Sh421 million by end of April.
Its financial standing has also been on a steady decline since January 2014 with collections declining from Sh365
The money, as the following data below shows, is owed to statutory bodies that include Kenya Revenue Authority (KRA) and the workers pension scheme, suppliers, lecturers and other staff and to landlords who have leased their properties to KIM.
KIM’s outstanding obligations as at 30th April 2016

Creditor/Expense Outstanding Obligation Incremental Monthly expense
1 Kenya Revenue Authority 134m 8m
2 Pension 55m 3m
3 Kimsave 29m 2m
4 Rent 83m Accrue quarterly
5 Other Suppliers 90m
6 Lecturers 13m
7 Staff 17m
  Total 421m  

 
The minutes also show that KIM has not been able to pay rent accrued to landlords in Thika, Mombasa, Uniafric in Nairobi and in Narok.
But when contacted, Mr Muturi denied that the organisation is in a financial crisis saying that the cash flow difficulties are not as serious as claimed.
“The financial health of the institute is stable, despite sometimes-sluggish cash flows,” Mr Muturi said.
He attributed cash flow difficulties to what he termed “normal shocks and pressures” that businesses and organisations usually go through.
However, Mr Muturi refused to confirm that KIM is unable to meet its financial obligations to different entities or that the Institute’s debts had accumulated to Sh421 million by end of last year.
KIM1
Students of Kenya Institute of Management (KIM)Nyahuru branch pose outside Thomson Falls Lodge during a study tour.
 
He disowned the minutes saying; “I cannot ascertain the authenticity of the document.”
Further, he said that KIM has since settled its financial obligations to the staff Sacco.
With offices and campuses in different parts of Kenya and elsewhere in the Region, KIM is a non-profit organisation with corporate and individual membership.
Started in 1954, KIM draws finances from a number of sources including membership fees; student’s as well as from management training it conducts for governments, NGOs, private companies and individuals.
Over the years, the Institute had achieved enviable status for been a leader in management training and following what observers believed was sound management at the top. But it appears that things are not going well at the Institute.
For one, there have been claims that that top lecturers and staff have been running away from the institution following non-payment of their dues. Much of the information is contained in a damaging blog and, to a certain extent, authenticated by documents in our possession.
“Some of the information is exaggerated,” said Mr Muturi who nevertheless acknowledged that there have been delays in paying lecturers’ claims and that some 22 members of staff have left the Institute.
“This year, eleven people have left us voluntarily. Another eleven have been separated through other means and that is “normal” for an organisation with hundreds of staff members,” he added.
A notable aspect of the issues at KIM is that documents show that at some point in July last year, the staff SACCO, (Kimsave) had taken the matter of non-remittance of staff contributions before the Commissioner of Cooperatives.
This was on July 31, 2015 when the Commissioner of Cooperatives, ordered KIM to remit all outstanding arrears amounting to over Ksh28 million in eight installments.
The Institute was also asked to “ensure (that) payments of Sacco monthly payroll deductions (were done) before 5th of the succeeding month.”
Before the issue of financial difficulties it is facing became public, KIM had remained one of the most reputable and reliable institutions in the country as it offer quality management training programmes.
It is considered to have played a role in the growth and expansion of organizations, several corporations and even regional governments who prefer their staff to take up management programmes at the institute, which is a professional membership-based, not-for-profit organisation for managers.
The Institute’s programmes cut across diverse areas of specialization in management, public relations management, purchasing and supplies and project management.
KIM is credited with initiating the company of the year Awards (COYA) in 2000 that is one of the coveted accolades that companies in Kenya compete for.
The award celebrates and recognizes companies that have excelled in management and is based on what is termed organizational performance index, a tool that assesses performance excellence and competitiveness of the participating companies.
In addition, KIM came up with SME of the Year Awards that are presented each year.
Reputable companies including the Nation Media Group have been partnering with KIM in organizing COYA awards. Others include Crown Paints and Total Quality Management Leadership Ltd (TQML), the publishers of Miti magazine.
To raise its income, the Institute operates training programmes that have more than 5,000 individuals undergoing various training centres located in different parts of the country.
They include corporate managers and their staff. It also has a population of 19,000 regular students undertaking different courses ranging from certificate to diploma. All these learners pay fee to the institution.
To boost its kitty further, the Institution raises money from corporate and individual membership with corporate paying annual subscription of between Sh12, 000 and Sh20, 000 in addition to entrance fee. Individual members pay lesser subscription fees of between Sh3, 000 to Sh10, 000 depending on type of membership.
In addition, the Institute organises various training programmes for managers each year. During this year, for instance, it organized the 5th annual managers’ conference, which started in February and will end in September. KIM members attending this conference are required to pay Sh75, 000 while non-members are charged Sh87, 000.
KIM was initially a local chapter of the British Institute of Management currently the Chartered Institute of Management of London and Wales.
It is after independence that it converted to the Kenya Institute of Management. Since inception, the institute had maintained its status as a professional membership organization whose mandate is to promote excellence and integrity in the practice of management and the protection of management profession.
The institution has expanded over the years after coming up with ambitious programmes that have provided business solutions in Kenya and elsewhere in East Africa. It has established countrywide networks in 22 different counties from where they are able to work with SME’s.
Its SME Solution Centre was established to promote professional management practices in the SME (Small Business Enterprise) sector.
The centre offers training, research and consultancy services to SME. The institute convenes Africa Governance, Leadership and Management Convention that brings together the Private and Public Sectors in Africa, to reflect on matters of mutual interest.
KIM is also the sponsor of the Management University of Africa (MUA), a private university in Kenya

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