Unclaimed Property Advisors Share Best Practices – Panel Recap from IOFM AP & P2P Spring Conference
Christina Casey and I recently exhibited at the 2019 IOFM AP & P2P Spring Conference & Expo in Orlando, FL, at Disney’s Yacht & Beach Club Resort. APP2P connects accounts payable executives, leadership members and their teams, to focus on issues impacting their departments including A/P disbursements, procurement, payment automation, fraud, tax, and unclaimed property related audit risk and compliance issues. True Partners was excited to connect with many accounts payable professionals via our exhibit booth and as a result of my participation on a panel discussion titled: Unclaimed Property Advisors Share Best Practices.
Key Takeaways from the Best Practices panel discussion were:
- Owner outreach efforts are of great importance to a company’s compliance process. Whether it be the adherence to statutory due diligence requirements (which are not uniform), early efforts to contact payees who are very recently unresponsive to disbursement mailings, or the usage of more modern techniques to locate and verify the authenticity of property owners, this Q&A underscored the very spirit of the unclaimed property compliance process: the return of property to its rightful owner.
- Voided accounts payable checks as well as outstanding checks can factor into a company’s compliance obligations, and often represent unseen reporting and audit risk.
- Record retention policies that are established in accordance with generally accepted industry practices and other regulatory requirements may not be sufficient to best aid a company in defending itself during an unclaimed property examination. While it may not be practical for a company to radically change its retention practices going forward, the ramifications and unique audits risks of not maintaining sufficient records was emphasized.
We received quite a few questions from conference attendees and we wanted to share some of those with you, in case you might have the same questions:
Q: Should companies maintain records that always support why disbursement checks have been voided in the normal course or business?
A: YES!! It is a best practice to maintain support that can confirm why checks are voided, whether as a result of the re-issuance of a stale-dated check, the subsequent sending of funds electronically, reporting the funds to a state on an unclaimed property report, or for any other reason that would support the final disposition of the obligation.
This question was featured as one of the 14 Trivia questions that were included in a conference-wide raffle/contest, and the lucky recipient of True Partners Consulting’s prize, Beats Solo3 Wireless Headphones – Mickey’s 90th Anniversary Edition, was Alan Paley, CFO of Overseas Cargo, Inc.!
Q: What parameters are auditors utilizing to schedule accounts payable transactions as unclaimed property?
A: Generally, all outstanding checks may be deemed unclaimed after reaching a certain age (typically 3 or 5 years after the issuance date). In additional, auditors will likely schedule all checks that were voided more than 30 days from the original issuance date. While this is an aggressive tactic, without proper supporting documentation, the initial presumption is that these transactions represent unclaimed property. Less stringent parameters are often available when settling past due obligations under various states’ voluntary disclosure agreement (VDA) programs.
Q: How long should a company maintain supporting documentation, in case a company is ever audited for unclaimed property?
A: Ideally, a general rule of thumb is to maintain accounting, treasury, due diligence and unclaimed property reporting documentation for fifteen (15) years to cover a reporting period of ten (10) years for jurisdictions with a five (5) year dormancy period. This meets the provisions of both Delaware and the guidelines in the Revised Uniform Unclaimed Property Act (RUUPA) of 2016.
See True Partners at other future AP & P2P events, including the Fall 2019 Conference & Expo at The Westin Kierland Resort in Scottsdale, AZ, on October 15-17, 2019. We highly recommend this event to financial professionals who are interested in learning more about operations, automation, fraud, risk and compliance issues impacting the accounts payable functions. For more information please visit https://events.iofm.com/conference-fall/.
We had a great time at AP & P2P Spring 2019 and want to thank the IOFM team for putting on another great conference. If you have any questions, please feel free to send me an email at email@example.com.