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The Unclaimed Financial Assets Authority (UFAA) has collected Sh36 billion in unclaimed assets that had remained uncollected by Kenyans over the last five years. This money has been deposited into the Unclaimed Assets Trust Fund Account at the Central Bank of Kenya.
UFAA acting CEO Caroline Chirchir revealed this while appearing before the Senate Finance and Budget Committee, which took her to task over discrepancies in which Sh10 billion in unclaimed assets cannot be accounted for.
The committee stated that only Sh1.5 billion out of Sh11.5 billion as of June 2023 could be accounted for and sought to know what measures the agency had to identify the assets.
“The Authority has conducted five phases of audits, using different auditors for each phase. By the end of June 2023, the authority identified unclaimed assets worth Sh11.5 billion. However, the authority has received remittances of Sh1.5 billion from the identified figure, leaving an outstanding balance of Sh10 billion,” said Chirchir.
She told the Senate committee, chaired by Mandera Senator Ali Roba, that during the process of recovering identified assets, the authority discovered that some owners had been reunited with their assets at source before they were remitted.
Chirchir explained that the policy guidelines on the conditions for assets to be considered reunified at source include payment to asset owners, activation of accounts, ongoing court cases, and others, in line with Section 19 of the UFAA Act.
She further revealed that Sh8.8 billion is still in the process of recovery and that the authority had faced several challenges. These include some institutions going to court, which made the recovery process difficult.
“Provision of voluminous evidence by holders, which requires extensive review, and the retrospective nature of unclaimed financial assets, makes the closure of audits lengthy. Additionally, the authority has inadequate staff capacity, and some institutions are not responsive to demand notices,” she said.
Chirchir acknowledged that the unclaimed assets regime is a new concept in Kenya and Africa, meaning auditors are still going through a learning curve.
She noted, however, that even in more established jurisdictions, the audits of unclaimed assets take between 10 to 15 years to complete.
Nominated Senator Gloria Orwoba questioned why UFAA incurred expenses of more than Sh500 million for audit services and the procedure used to procure the services of the audit firms.
She responded by stating that since its inception, the agency has conducted 134 audits across five phases, and Sh416 million has been paid to outsourced auditors.
Chirchir explained that the UFAA Act provides for the examination of books of records, and since there are only three staff members in the compliance section, the Authority outsourced the inspection of books to qualified and registered auditors through national open tenders, in line with the Public Procurement and Assets Disposal Act.
Senator Roba also questioned the authority’s spending, particularly the justification for spending Sh3.4 million on auditing unclaimed assets worth Sh5.8 million, asking the authority to provide a justification for this expenditure, as it seemed imprudent. UFAA Board Chairman Francis Njenga denied any manipulation, insisting that all figures were accurate and compliant with legal requirements.
“The Senate Finance and Budget Committee is not satisfied with the responses given by the Unclaimed Financial Assets Authority on various matters raised. We will schedule another meeting for the lingering concerns to be addressed,” said Roba.
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