Develop Procedures

Establish Unclaimed Property Procedures to ensure that the audit runs smoothly and protects your company with the following auditing defense:

  • Consider hiring outside consultants that can manage the audit, especially if your staff has been recently downsized or if your company does not have the expertise to properly and efficiently handle the audit
  • Prepare for the worst-case: develop a strategy that the audit may be litigated (by either the state to collect its established liability or by your company to defend against an unwarranted claim)
  • Document communications, conflicts, discrepancies, inconsistencies and missed deadlines made by the auditors; they are doing the same about you
  • Establish a centralized team to manage the audit. This will provide consistency, especially if the audit covers multiple subsidiaries or divisions
  • Negotiate audit requests made by the auditor. This will help focus staff time to timely complete vital requests while potentially eliminating or reducing those that are not as important
  • Use a qualifying statement to all audit responses to signify that your cooperation does not mean that your company agrees with the auditor’s liability calculation, audit methodology, etc

 

At a bare minimum, develop the following Unclaimed Property Procedures to ensure proper Unclaimed Property reporting and remittance in the future:

  • Determine states where you need to report and remit Unclaimed Property
  • Establish states which require annual Unclaimed Property reporting, whether there is Unclaimed Property to report or not (called negative reports or zero reports)
  • Investigate applicable state reporting requirements
  • Consider a membership in NAUPA’s “QRP States Unclaimed Property Monitoring Service” for $159/year that keeps you informed about changes in state laws that affect annual reporting requirements – http://www.unclaimed.org/reporting/qrp/what-is-qrp
  • Document procedure narratives, internal controls and checklists with applicable signatures for review to NOT ONLY ensure compliance with Sarbanes-Oxley Act of 2002 (if applicable), but to ensure you are properly remitting Unclaimed Property.  This will help in your Unclaimed Property Audit defense (if you are ever audited again)