Senators are investigating why the Unclaimed Financial Assets Authority is holding onto Sh8.8 billion in assets whose owners have been identified.

The probe started after nominated Senator Gloria Orwoba sought to know from the Finance and Budget Committee the whereabouts of the billions yet to be given to their rightful owners.

Speaking on the floor of the House, Orwoba alleged that more than Sh10 billion in assets had been misappropriated by the agency.

Cost of audit

She also sought an explanation on Sh500 million spent on audit by the agency.

She said: “Investigate discrepancies regarding unclaimed funds amounting to Sh10 billion that cannot be accounted for, given that only Sh1.5 billion out of Sh11.5 billion has been accounted for, and state any measures the board has taken against the management in the supervision of the audit.”

Richard Onyonka (Kisii) also sought to know why it had taken the agency so long to identify the owners of the assets.

He said: “Please tell us the criteria that you use to identify the owners. Also tell us in your own estimation the total unclaimed assets in Kenya.”

Outstanding balance

The comments came after the agency acknowledged that though the unclaimed assets amounted to Sh11.5 billion – from 134 private and public institutions – only Sh1.53 billion had been accounted for, while Sh1.09 billion was handed over to the owners.

Caroline Chirchir, the acting CEO of the agency, cited an outstanding balance of Sh8.8 billion but was quick to point out that officials were talking to the institutions holding the money to see how it could be surrendered.

Assuring lawmakers that the unclaimed assets were intact, Chirchir said her agency was working to enhance transparency, including carrying out quarterly internal audits, external audits by the auditor general, and regular asset recovery reports to its board of directors.

“We have identified Sh11 billion, and only Sh1 billion has been remitted, and another Sh1 billion was basically reunified at source – given back to the owners who were wrongfully identified as having abandoned [the assets]. So, there is an outstanding Sh8.8 billion,” she said.

Compliance audits

She added that the agency started conducting compliance audits in the 2017/2018 financial year and had audited 134 public and private

Chirchir, who said that the total unclaimed assets per the 2017 baseline report was estimated at Sh241 billion. She lamented that her agency was understaffed and had not been able to push institutions to remit unclaimed assets.

Some of the institutions, she claimed, had not responded to the agency’s notices demanding that any unclaimed assets be surrendered, though Section 31 of the 2021 Unclaimed Financial Assets Act gives the agency the power to inspect holder’s records to determine compliance levels.

She said: “The challenges we face in recovering assets include provision of voluminous evidence by holders which require extensive review and the retrospective nature of the unclaimed financial assets, which makes the closure of the audits too long while the authority has inadequate staff capacity.

“Some institutions are not responsive to demand notices.”

She added that the agency has only “three people who are handling matters of compliance at the moment.