When planning to ensure adequate recordkeeping and reporting cycles for unclaimed property compliance, one item often gets overlooked: staffing. This blog will help you maximize labor resources and avoid staffing issues that can lead to higher liability.
First, determine who is responsible for unclaimed property
In many companies, unclaimed property responsibility falls to a general finance department, such as tax, treasury or accounting. Some companies assign unclaimed property to dedicated compliance departments or industry specific departments, such as Deposit Operations in a bank or the Land/Division Order Department in oil and gas. In a way, it doesn’t matter who does it. The number-one criteria is simply the ability to keep up with the process and report effectively on behalf of the entire organization.
Because unclaimed property originates in different departments throughout an organization, it often is best to assign early process steps to those who best understand where the property comes from. Payroll, for example, best understands outstanding paychecks. After each individual department completes due diligence, remaining outstanding properties are turned over to an assigned department for collected recordkeeping and reporting. An outside advisory company can manage this part of the process, but a company liaison should be provided to gather records from all departments.
Employee roles involved in unclaimed property management include personnel at many levels, from a company officer who signs reports to analysts who reconcile bank accounts and IT staff who run queries and gather data for analysis.
During an audit, a holder should lean on regular unclaimed property reporting teams to complete the steps. However, additional personnel can help ensure maximum results: attorneys, independent unclaimed property experts such as those at MarketSphere, key decision-makers, and IT data retrieval experts.
Staffing issues related to unclaimed property
Because unclaimed property is complex and often doesn’t receive priority attention, specific unclaimed property personnel issues are not always discussed. However, staffing-related issues such as those listed below can keep unclaimed property from being reported successfully and cause unnecessary liabilities.
Unclaimed property staffing issue #1: Responsibility
To solve confusion about who’s responsible, establish an unclaimed property task force to analyze your company’s potential liabilities and locations of unclaimed property within your organization. The task force should assign duties across the organization to align with level and type of liability.
Unclaimed property staffing issue #2: Spiking Demand
Unexpected spikes in employee hours may be needed to prepare for cyclical reports or deal with audits. Cross train staff to step in at strategic times. Temporary staff can be hired to complete detailed legwork (with good training and clear instruction).
Unclaimed property staffing issue #3: Upstream Disorganization
Disorganization of unclaimed property resources and tools at any stage can result in excessive staff hours to research and sort property records. This is especially problematic early on when identifying stale-dated items, transferring unresolved items, identifying property owner details, and remediating outstanding items. It’s much better to identify and manage abandoned items six months after they become stale, rather than waiting years. Gathering robust payee information when a property is initiated also solves many downstream problems, including potentially higher assessments.
Unclaimed property staffing philosophy
As you can see, a number of factors dictate each company’s unique unclaimed property staffing philosophy. Location of property, transaction volume, and seriousness of liabilities are just a few of those factors. A company being audited will feel more urgency to properly allocate staff than a company with a “wait-and-see” approach.
To determine an appropriate level and structure of unclaimed property staffing, ask questions like these:
- Are you handling property in-house or outsourcing to an advisor or third-party administrator? If in-house, you’ll need a much more formal staffing structure.
- Will you need additional staff for an audit?
- Is your volume of potential unclaimed property high or low?
- Do you receive many or few claimant calls after due diligence efforts? Do you have a call center, or will you need assistance?
- How many unclaimed property types must you manage and where are they produced?
- What processes are in place to reduce unclaimed property (e.g., automatic letters or calls to records more than 90/120/180 days old)? Are processes automated or manual?
There is no standard method of allocating staff to unclaimed property. We know companies that get by with one person for the entire function, as well as companies with many transactions and employees solely focused on unclaimed property. For best results, match staffing to your company’s unique unclaimed property structure.