LASU speaks on alleged non-remittance of staff salary deductions

LASU gate

Lagos State University (LASU) has made its position known in reaction to the controversy trailing the financial situation of the university vis-a-vis COVID-19, subvention from the government, LASU’s IGR, and unfailing salary payment.

Below is the full explanation as put across by the institution’s Coordinator, Centre for Information, Press and Public Relations Ademola Adekoya:

I have been inundated with calls from our media friends seeking to get the position of the University on the non remittance of staff salary deductions to cooperative societies in the University, a matter, built on the understanding and agreement of concerned stakeholders, but which has unfortunately, found its way as an issue, in the media space.

I will, therefore, use this medium to provide an unambiguous and definite response to all enquiries on the matter.

Prior to the nationwide lockdown in March this year occasioned by the coronavirus pandemic, the Lagos State University under the current administration had never defaulted in the monthly remittance of staff salary deductions to the cooperatives, ditto every other financial obligation to all its subsidiaries.

The university management also pays salaries the latest on the 25th day of every month; that has never failed, to date.

The remittance of staff salary deductions to cooperatives, however, became a challenge starting from April this year as a result of the significant drop in the university’s income caused by theCOVID-19 lockdown.

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The finances of the universiy, like that of many other institutions, states and nations, was severely hit when all income-generating activities stopped due to the lockdown; we were in a situation where income (subvention from state government and IGR), became low, notwithstanding that all statutory obligations must be met, the most important of all being staff salaries.

The university receives about Four Hundred and Fifty Million naira (#450,000,000.00) monthly as subvention from the Lagos State Government qhile it (LASU) pays in the range of Five Hundred and Fifty Million Naira (#550,000,000.00) as salaries to its staff every month.

This leaves the university with a deficit of about One Hundred million naira (N100,000,000,00) every month, which it augments from its Internally Generated Revenue (IGR) to meet up with the regular payment of salaries.

In April this year, the monthly subvention from the state government was cut from Four Hundred and Fifty Million Naira (N450,000,000,00) to Two Hundred and Ninety Two Million, Five Hundred Thousand Naira (#292,500,000.00) leading to a shortfall of One Fifty Seven Million, Five Hundred Thousand Naira (#157,500,000.00) coupled with the regular augmentation of One Hundred Million Naira (#100,000,000.00) which the university must cough out from its IGR monthly to pay salaries.

The IGR was, however, by this time, not available anymore owing to the total shut down of the university.

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By implication, in spite of this financial challenge, the university had to look for Two Hundred and Fifty-Seven Million, Five Hundred Thousand Naira (#257,500,000.00) to meet up with the payment of staff salaries in April 2020.

Recall that the State Government during the lockdown, had promised to pay all workers in Lagos State their salaries despite the global economic downturn, and so even when it was almost financially impossible for the university to pay the full component of its staff salaries like their counterparts in the state.

Part of the very limited options available to the university, however, was to pay the component of staff salaries to banks while the staff salary deductions to the cooperatives were to be remitted when the university’s finances (IGR) fully improve.

It is pertinent at this juncture, to mention that the university management invited all the Cooperative Societies with Staff Unions to explain in detail and share with them the situation of the University’s finances and how the Management intends to meet the challenge.

The majority of the stakeholders showed understanding with the Management on the position that the situation was not peculiar to LASU and as such, should be handled and resolved as proposed by the management. It is with this understanding that the management continues to augment monthly staff salaries pending when the situation normalises.

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However, some mischief makers have been quick to escalate the issue in order to discredit the University Management for their selfish motives.

Let me state categorically that despite the dip in the Internally Generated Revenue (IGR) of the University occasioned by the suspension of most of our academic programmes, the main source of the IGR, the University has continued to meet up with the performance of its financial obligations: staff salaries are paid latest 25th of every month, promotions of deserving staff are carried out despite it’s financial implications, and other ancillary expenses are also carried out by the University in spite of its lean resources.

The University Management is also fully committed to the understanding reached with the cooperatives to fully remit every money of staff deducted as soon as the IGR improves through the full restoration of academic activities in the university while appealing for patience from affected stakeholders.

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