Five hundred thousand financial institutions in Kenya are holding more than Ksh241 billion in unclaimed assets, according to recent reports by Unclaimed Financial Assets Authority (UFAA).
And now, the Unclaimed Financial Assets Authority (UFAA) is now hoping that Auditor General Nancy Gathungu will help it deliver on its mandate by calling out government entities that fail to remit unclaimed assets.
The entities also include banks, listed firms and insurers holding onto cash in dormant accounts, unclaimed dividends, safe boxes, unit trusts and insurance policies whose owners cannot be traced.
“We have partnered with the Office of the Auditor-General to facilitate the audit of public sector agencies on compliance with unclaimed financial assets reporting and surrender,” said UFAA chairperson Richard Kiplagat.
According to the authority, the banking sector contributes the bulk of unclaimed assets at 60 percent followed by listed companies and telecommunication companies.
The authority has so far received Ksh.50 billion worth of unclaimed assets.
“The Auditor-General has scoped compliance with unclaimed financial assets law as an audit issue in the ongoing statutory audit across agencies of government at national and county levels,” he added.
Deputy Director at the Office of the Auditor-General John Karingithi said all government agencies would be required to report on their compliance with the Unclaimed Financial Assets Act, 2011, which requires public and private sector entities to surrender unclaimed financial assets with the authority.
Also Read:
- Kenya Power surrenders Ksh.100 million unclaimed assets
- Auditor General to scrutinize public agencies on unclaimed financial assets
- UFAA says institutions are holding billions in unclaimed assets
“There are already procedures on the process of surrendering unclaimed financial assets. Soon, this will become a routine… all Ministries, Departments and Agencies will be required to stick to it,” he said. The Auditor-General has started flagging non-compliance with the unclaimed assets law among government entities.
Kenya Power is among government entities that has so far surrendered unclaimed assets amounting to Ksh.100 million.
An audit from the Office of the Auditor General report had shown Kenya Power was among State Corporations holding on to the unclaimed funds illegally.
According to UFAA, the company has already repatriated millions of unclaimed assets to their legal beneficiaries following the audit.
“When they received the report, Kenya Power began the reconciliation process and they came to our offices for a meeting and we held discussions,” said UFAA Acting Manager for Unclaimed Asset Line Beatrice Chelagat.
The public sector entities are, however, not the only ones flouting the law. Numerous private sector firms have also been sitting on financial wealth whose owners cannot be traced, adding to the over Sh241 billion being held by about 490,000 institutions.
As of last year, UFAA said it had received about Ksh.50 billion worth of unclaimed assets. This included Ksh.20 billion in cash, shares worth an estimated Ksh.28.75 billion (901 million units of shares) and units trusts of an estimated Ksh.55.66 million.
Both private entities and State agencies are required to surrender unclaimed assets to the UFAA by November 1 every year.
The holders of the unclaimed assets are presently working to reunite the assets to beneficiaries after which remnant sums will be surrendered to the UFAA by the end of this month.
Failure to surrender the assets attracts fines including 25 percent of the value of the unclaimed assets and specific daily penalties to company managers.
