Owners of unclaimed financial assets worth over Sh8.8 billion held by various institutions will have to wait longer to access them.
This is after the Unclaimed Financial Assets Authority (Ufaa) disclosed that some of the institutions holding the assets are not in a position to remit the same.
Appearing before the Senate’s Finance and Budget committee, Ufaa Acting CEO Caroline Chirchir said the institutions have either refused or are unable to submit the unclaimed assets due to financial challenges.
She told the committee chaired by Mandera Senator Ali Roba that out of the billions held by some 16 public institutions audited by the authority, only Sh63.3 million has been remitted to Ufaa.
Ms Chirchir noted that an audit carried out by the authority identified unclaimed financial assets amounting to Sh11.5 billion as at June 30, 2023 held by both public and private institutions in Kenya.
However, only Sh1.5 billion has been remitted while Sh1.09 billion worth of assets were handed to the owners at source.
She further told senators that 116 private institutions audited so far hold Sh6.79 billion but have remitted about Sh2.5 billion—Sh1.46 billion to the authority and Sh1.09 billion to holders at source—leaving a balance of Sh4.24 billion.
Ms Chirchir told the committee that they are trying to recover the unremitted assets but face a myriad of challenges, including some institutions going to court.
She added that some holders dispute the audit findings, some are not responsive to demand notices while others just flatly refuse to remit.
Mr Roba questioned the authority’s spending, particularly the expenditure of Sh3.4 million on auditing an unclaimed asset worth Sh5.8 million.
However, Ufaa Board chairperson Dr Francis Kigo denied any manipulation. Ms Chirchir said the authority engages external audit firms due to inadequate staff capacity with the cost of the audits determined through open national tenders.
The Ufaa boss explained that the unclaimed assets regime is a new concept in Kenya and Africa and that the authority, auditors and holders are on a learning curve.
However, even in more established jurisdictions, she said, audits of unclaimed assets take between 10 and 15 years or more to be completed.
“Engagements are ongoing for the recovery of the outstanding identified assets and the audit fees. Compliance is our core mandate, and it is only through compliance audits that the authority can enforce penalties,” said Ms Chirchir.
She said the authority has received unclaimed financial assets in cash in the Unclaimed Assets Trust Fund amounting to Sh36 billion from various holders in the last five years.
On strategies employed by the authority to ensure compliance, she said it has anchored in law waiver of penalties to encourage holders to comply without fear of harsh penalties. Further, it also has pre-qualified lawyers to institute legal proceedings against non-complying holders to recover any identified assets.
“We also conduct continuous awareness forums to sensitise holders on compliance,” said Ms Chirchir.
Some senators accused Ufaa of possible collusion with institutions to manipulate figures.
“There seems to be collaboration between Ufaa officers and certain institutions to alter figures,” Senator Gloria Orwoba said, claiming that the data appeared inconsistent and manipulated.
Mr Roba questioned the authority’s spending, particularly the expenditure of Sh3.4 million on auditing an unclaimed asset worth Sh5.8 million.
However, Ufaa Board chairperson Dr Francis Kigo denied any manipulation. Ms Chirchir said the authority engages external audit firms due to inadequate staff capacity with the cost of the audits determined through open national tenders.
