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More and more states are increasing their scrutiny of holders’ adherence to their compliance laws. Individual audits are on the rise. The following are actions your company can take to ensure that you are prepared in the event of an audit.

Make sure that you are aware of current regulations for each state since they can change on an annual basis. Recent changes have included types of remittance, the report formats to be filed, the media that the reports are delivered, dormancy periods, due diligence requirements and excluded property to name a few.

Your escheatment process should be well documented to ensure people in your organization know their roles and responsibilities. This will be required to present to state auditors should they request it. This would include your processes for due diligence, annual reporting, remittance, record retention of required supporting documentation and accounting process for booking stale dated items. Be sure to include a review of transactions from businesses you recently acquired or merged with. The successor company is responsible for predecessor liabilities.

Ensure that your company conducts frequent quality control routines to avoid costly errors such as: failure to record voided checks, duplicate payments, or checks which were subsequently offset by a credit. This root cause analysis provides savings for your company in many ways, such as eliminating necessary remittance of monies to the state, by improving internal processes in reducing the number of records to be analyzed in future periods. Make sure you retain adequate documentation to support those journal entries made to reverse items from your unclaimed liability account as well as the reconciliation of the unclaimed account itself.

ECFS, LLC would welcome the opportunity to provide any consulting to your organization in response to any state audit inquiries or to proactively assist your team in eliminating any future risk. Please contact any member of our staff for further questions.