COMPLIANCE CONCERNS
After a closer review of the unclaimed and abandoned property situation, most states have recognized
the following facts:
- Many businesses that are required by law to file and report unclaimed funds were unaware of the
existing unclaimed and abandoned property reporting laws and consequently were either not filing reports
or filing reports improperly.
- Many businesses that are filing reports are in many cases under-reporting. For example, banks could
be overlooking cash accounts, cashier checks, IRA's and CD's. Corporations could be overlooking pension/retirement
plans, dividend reinvestment plans, and equity and debt of the company. Insurance companies could be overlooking
the necessity of reporting drafts, annuities or matured policies. All types of abandoned property are often
written off to income or to surplus accounts.
- Due to the huge volume and size of the reporting holder community, total reporting compliance can not
be attained by most State Unclaimed Property Offices. States have begun to increase the size of their
compliance staff and use external auditing companies in an attempt to bring holders of unclaimed
and abandoned property into compliance.
Our auditing experience has shown that less than one percent of holders of uncliamed and abandoned
property are truly in compliance with the law.
Vast changes and new business developments have created new types of reportable unclaimed and
abandoned property.
The current trend of decentralization of accounting records for corporate subsidiaries and divisions have
imposed new problems for the unclaimed and abandoned property auditor.
Large amounts of unclaimed and abandoned property are being written off and not just into standard
General Ledger miscellaneous income accounts. These amounts are being buried into multi-leveled
accounting structures and may only be recovered from the knowledge of prior company controllers on
specific and related industries.
An increasing number of holders located outside your State will not accurately report and remit
unclaimed and abandoned property until they are audited.
