UoN tops list as new audit exposes unclaimed billions in universities

Kenyan Currency in notes.[FILE,Standard] An audit of eight sampled learning institutions has revealed that they are holding unclaimed financial assets in the form of caution money and overpaid fees. According to the Auditor General's performance audit report on management of unclaimed financial assets by the Unclaimed Financial Assets Authority (UFAA), institutions are required to remit any caution money and overpaid fees that remain unclaimed for more than two years after a student's completion of studies, graduation or clearance. "Interviews with eight sampled institutions revealed that they held unclaimed financial assets in the form of caution money and overpaid fees. Further, five of the eight universities said they had not located or notified students whose refunds were due," reads the report dated August 2025. The audit further revealed that the sampled learning institutions did not proactively reunite unclaimed financial assets with their owners and, in some cases, used refundable deposits to cover operational expenses due to financial constraints. According to the Auditor General, this led to an accumulation of refundable deposits that had not been remitted to the UFAA. A review of compliance audit reports also showed that public universities were holding unclaimed financial assets worth Sh2.6 billion, which should have been remitted to the Authority. "Due to non-compliance by the learning institutions, penalties imposed on three of the five institutions exceeded the principal amount of unclaimed financial assets identified," the report states. "The hefty penalties imposed on the institutions led to the non-closure of unclaimed assets, meaning holders either failed to surrender the identified assets to the Authority or did not provide evidence showing the assets did not qualify as unclaimed," the report adds. "This resulted in the non-recovery of the identified assets." The University of Nairobi recorded the highest amount of unclaimed financial assets at Sh2.3 billion, followed by Moi University with Sh171.4 million, Maseno University with Sh40.6 million, Egerton University with Sh30.2 million and Kenyatta University with Sh20.7 million. To safeguard such funds, the auditor noted that Section 44(2)(a) of the Unclaimed Financial Assets Act, 2011 requires holders of unclaimed cash assets to deposit them into the Trust Fund Account at the Central Bank of Kenya. The Trust Fund is responsible for protecting unclaimed financial assets, while Regulation 15 of the Unclaimed Financial Assets Regulations, 2016, provides that investments should be made only from monies in the Fund that are not immediately required for its operations. "The Authority invests these assets in government securities and uses a portion of the income to fund its operations, both subject to approval by the Cabinet Secretary for the National Treasury," the Auditor General said adding; "This investment decision was made because government securities offer higher yields." A review of the Authority's Investment Policy Statement (IPS) showed that it allocates 50 per cent of available cash to Treasury Bonds, 45 per cent to Treasury Bills, and retains 5 per cent as cash reserves to pay out claims. According to the Auditor General, UFAA invested Sh22.3 billion and generated Sh13.1 billion in income between the 2018/19 and 2023/24 financial years. "This demonstrates that the Authority successfully safeguarded unclaimed financial assets received from holders while earning returns on investment. Part of these returns was used to finance the Authority's operations," the report noted.

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UoN tops list as new audit exposes unclaimed billions in universities

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