Stealing from the dead and next of kin? UFAA marred in Sh10.5billion financial discrepancy, alleged multi-million tender flaws

A whiff of scandal that has morphed into a possible clandestine fraud syndicate targeting to steal from the dead is brewing at the Unclaimed Financial Assets Authority (UFAA) involving unaccounted for assets and money belonging to the departed ones and their surviving next of kin coupled by questionable payments to suppliers amounting to billions of shillings.

Investigations by The Informer Media Group have established that factional camps within the board and the top management are divided right down the middle as the spotlight shines on the agency tasked with the primary mandate of safeguarding and re-uniting the unclaimed assets with their rightful owners.

So far, a petition has been filed before the Senate for a financial forensic audit at UFAA amid fears that the senior officials at authority could be culpable through acts of commission or omission.

Among the key issues the board and management of UFAA is grappling with include discrepancies of the unaccounted Sh10.5billion out of the Sh11.5billion audited in the last five years, Sh418million controversial payout to external auditors and another Sh159million payment to alleged suppliers.

Further, our impeccable sources intimated that there are unexplained delays for the transfer of Sh1.2billion units at the Nairobi Stock Exchange (NSE) and Sh466million units to UFAA.

When contacted for comment by our team through official UFAA mailbox and short text messages, both UFAA board chairman Francis Kigo Njenga and UFAA Chief Executive Officer (CEO) and Board of Trustees John K. Mwangi acknowledged receipt of the queries but declined to respond to them.

“Whose number is this?” Kigo responded after receiving the questionnaire.

On his part, the CEO, Mwangi said that: “Thanks for your message. Please favour us with your written and officially signed request on your office letter head to the office and we shall be glad to respond.”.

However, by the time of going to broadcast, no response has been forthcoming even from the official mail address of the Unclaimed Financial Assets Authority (UFAA).

Recently, a petitioned was filed before the Senate demanding for a thorough forensic probe at UFAA over questionable expenditures amounting to hundreds of millions, possible theft of unclaimed assets and unexplained delays in the process of reuniting the unclaimed assets with the rightful owners.

Recently, nominated Senator Gloria Orwoba has petitioned both the Senate and the National Assembly to expeditiously launch an investigation into billions of shillings’ worth of unclaimed assets following years of rising concerns over the reunification of the assets with their rightful beneficiaries.

While making her submissions on the floor of the Senate, Orwoba noted that about Sh10billion worth of unclaimed assets belonging to the dead and their next of kin are misappropriated every year including Sh500million in auditing fees which cannot be accounted for.

“The sad thing about this is that this is money that has been left by those who have passed on. It is literally dancing on the graves of dead people.” Orwoba submitted.

Official records at UFAA show that by last year, 2023, the now embattled authority was holding over Sh60billion of unclaimed assets.

This comprise Sh33billion in cash and cash equivalents, and Sh1.7billion shares amounting to Sh30 billion.

“When we have a state agency that is operating in the sums of billions that cannot account for this money, money that is potentially being looted. The same agency cannot account for ksh500 million that they claim they have spent on auditing services. Unclaimed Financial Assets Authority have discrepancies of up to Sh10billion per year.” Orwoba added.

The authority which started operations in 2014 is mandated to receive unclaimed assets from the holders of such assets and safeguard and reunite the assets with rightful owners.

In what is akin to stealing from the dead while confined to their graves, the Senator called for an expeditious comprehensive probe.

“If we are going to be prudent in terms of austerity measures, it is proper as we are looking at our expenditure in terms of money spend even here in the senate we should also ensure these state agencies, one of them being unclaimed financial assets authority be really audited to the point we are able to look at the extra resources this country has and how we can diversify or use those resources to help us in running the economy of this country.” Orwoba noted.

The parliamentarians’ concerns over the operations of UFAA comes as the Auditor General Nancy Gathungu raised a red flag over the security of unclaimed assets.

While the authority started receiving unclaimed assets from holders in 2014, reunification of the assets with the beneficiaries started in 2016.

As at June 2022, receipts from holders was Sh22,614,997,000 while claims paid totaled to Sh604,961,000 representing a reunification rate of three percent of total assets remitted by holders, according to a report by the auditor general for the financial year ended June 30 2022.

According to the Auditor General the authority is not meeting its mandate of tracing unclaimed assets and reunifying them with the beneficiaries in an efficient and effective manner.

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.

Both Kigo and CEO Mwangi not confirm whether or not the authority has either initiated any internal audit over the issues or invited the Directorate of Criminal Investigations’ (DCI) Anti-Banking Fraud Investigations Unit (BFIU) sleuths or the Financial Reporting Center (FRC) to investigate the matter.