•The authority started receiving unclaimed financial assets from holders in 2014 and reuniting the assets with beneficiaries in 2016.
•Gathungu said management attributed the slow pace of reunification to the non-differentiated process prescribed in the law.
Image: EZEKIEL AMING'A
The Unclaimed Financial Assets Authority is hardly delivering on its mandate of tracing unclaimed assets and reunifying them with beneficiaries, a report by Auditor General Nancy Gathungu shows.
In her report for the year ending June 30 2021, Gathungu said the reunification rate of assets with beneficiaries is still very low since UFAA commenced the process in 2016.
“Although there has been an improvement in the reunification rate of the assets with the beneficiaries, from a low of less than one per cent in 2017, the rate stood at four per cent,” the Auditor General said.
The authority started receiving unclaimed financial assets from holders in 2014 and reuniting the assets with beneficiaries in 2016.
Gathungu said management attributed the slow pace of reunification to the non-differentiated process prescribed in the law which discourages low-value claims due to cost implications.
The management also blamed the regulatory regime that prescribes forms that favour the physical delivery of documents by claimants and manual processing.
She said UFAA attributed the low rate to the nature of unclaimed assets, where tracing and location of rightful owners take time and low capacity staff.
“As of June 30 2021, the authority had 32 staff to handle operations countrywide. Low awareness levels of beneficiaries and many receipts of very small amounts without any provision or mechanism to donate among other factors was also named,” she said.
Gathungu said the authority spent Sh506,511,000 against an approved budget of Sh1,011,080,000 resulting in an under-expenditure of Sh540,569,000 or 50 per cent of the budget.
“The underperformance affected the planned activities and may have impacted negatively on service delivery to the public,” she said.
The auditor general said expenditures amounting to Sh143,615,000 were incurred on consultancy services representing 50 per cent of the total administrative expenditure during the year under review.
Gathungu said consultancies were incurred in holder audits, contracted technical services, systems and software support and contracted professional services.
“This is indicative of inadequacy of the existing capacity to deliver on the authority’s mandate which may negatively impact the effective delivery of services,” she said.
UFAA was created to administer unclaimed financial assets. Its primary mandate is to receive unclaimed financial assets from the holders of such assets and safeguard and re-unite the assets with their rightful owners.
In February, data from UFAA showed unclaimed assets had hit Sh54.8 billion. The assets are in cash, shares and dividends
The money is largely held by insurance companies, banks, pension schemes, law firms, mobile phone money wallets and Saccos, among others.
The majority of the funds are held in stocks of a billion shares worth Sh30 billion and 9.8 million unit trust portfolios worth Sh55 million.
The authority is also holding Sh23.1 billion in cash and Sh120 million in foreign currency.
Unclaimed assets include money in bank accounts that have been dormant for more than five years, bankers' cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.
Most of the unclaimed assets are attributed to the failure of the deceased to inform the beneficiaries of the assets besides the absence of a Will.
Wealthy Kenyans are said to shy away from claiming money in idle assets surrendered to the state.
Edited by Kiilu Damaris