The state has recovered Sh36 billion in unclaimed Assets Deposits Fund and has taken it to the central bank.
The Unclaimed Financial Assets Authority (UFAA) has come under different criticisms with regard to unclaimed funds that have been recovered but the Authority has continued to rise to the occasion of enhancing the recovery of unclaimed assets.
More Than Sh36 Billion Was Collected: Several Issues Remain
In the last five years, the UFAA has retained Sh36 billions of unclaimed financial assets and transferred it to the Unclaimed Assets Trust Fund Account at the CBK.
However, during a Senate Finance and Budget Committee session, the outgoing acting chief executive officer Caroline Chirchir was put to task on the failure to balance accounts on Sh10 billion assets. From funds estimated to reach Sh11.5 billion by June 2023, only Sh1.5 billion has been eyed, a reality that has seen lawmakers demand explanation.
Explaining the Gaps
Chirchir said that Sh10 billion was unaccounted for mainly due to reunification at source where some people claimed their items directly before they were remitted to UFAA.
“Other unified assets are payments to owners, used accounts, and accounts seized by the court, according to Section 19 of the UFAA Act,” she said.
There is still Sh8.8 billion yet to be collected owing to issue like; noncooperation from institutions, cases in courts, and the fact that audit is normally done with retrospective effect. Chirchir told me that audits of unclaimed assets, no matter how conventional the location might be, normally take approximately 10-15 years.
There has been a lot of criticism regarding the Costs of Audit and procurement.
The committee also noted that it had quarrels with the kind of audit expenditures done by UFAA; it suggested that it was wrong for Sh500 million to be used to pay for audit services. Nominated Senator Gloria Orwoha pointed out for instance, Sh3.4 million spent on auditing unclaimed asset of only Sh5.8 million as ‘imprudent’.
Chirchir defended the agency’s action by stating that due to inadequate human resource capacity in the compliance section, the agency outsourced the auditors through the national open tender through Public Procurement and Assets Disposal Act. UFAA has conducted 134 audits in five phases at a cost of Sh416 million after its inception.
Senate ‘demands for More accountability’
Samuel Leshomo, the Chair of the Senate Finance and Budget Committee, Mandera Senator, Ali Roba, described some of the answers by UFAA as sad and demanded for further probe.
“The Senate Finance and Budget Committee is unhappy with the replies provided by the Unclaimed Financial Assets Authority to several issues raised. For the other issues to be dealt with, we will arrange another meeting,” said Roba.
A New Era for Financial Transparency?
Achieving a UFAA status for the recovery of Sh36 billion is encouraging but this has come coupled with increased public pressure on the organization to enhance transparency, efficiency and effectiveness on their operations. Since audits and recovery processes are still nascent in Kenya, public confidence depends on the agency’s capacity to address those issues and foster accountability.
As it stands, investors and customers are left with questions that may eat up all the goodwill that UFAA has built over time and some additional ones: Will UFAA rise to this occasion and put up the best examples of how to be as transparent financially as possible? It remains to be seen how this proceeds.