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12/31/15 3:35 PM

Keeping Management Informed of the Abandoned and Unclaimed Property Process

by Greg VerMulm

hierarchy-of-information.pngWhen abandoned and unclaimed property management is going well, few people care about it. This is because unclaimed property, when it’s being reported as required, impacts few other aspects of a business.

When unclaimed property is NOT going well and difficulties are encountered, such as an audit or a long period of non-reporting, unclaimed property has the potential to do real damage across an organization through past due payments, penalties, interest — even possible damage to a company’s reputation.

For those reasons, it’s important to keep leaders up-to-date with potential risks of exposure and liability. It’s not just a matter of c.y.a. for unclaimed property staff. Communicating with your organization’s leaders about unclaimed property could be a matter of material importance.

Don’t tell leaders everything: appropriately limit unclaimed property information

Company leaders’ plates are full, whether they are middle managers, VPs or CEOs. They must limit their involvement to priority issues. Use this knowledge to help determine which leaders need to know about unclaimed property activities in your organization — and what they need to know.

Two types of unclaimed property information should be shared with leaders:

Information materially impacting each leader’s scope of responsibility Before sharing unclaimed-property-related information with department or company leaders, think about how it will impact their specific needs. This requires thinking ahead to the potential results of unclaimed property activities and which leaders might need to be involved.

Information leaders can use to anticipate material risks As an unclaimed property professional “in the trenches,” you won’t know everything your company leaders know about upcoming products, mergers and acquisitions, and other important changes within your organization that could affect or be affected by unclaimed property. You can, however, educate leaders about potential risks and provide a list of things to watch for that could materially impact the company.

In both cases, it’s important to limit your communication about unclaimed property to only those details leaders need to protect the company. If in doubt, discuss it with your unclaimed property team and come to an agreement about what should be shared.

Hierarchy of unclaimed property leadership information

When we look at the types of unclaimed property information typically needed by different leaders in a company, it makes sense that there is a need for more details at the bottom and fewer details as you move “up the ladder.” Information with the potentially most damaging impact is what’s needed at the top.

CEO/President

  • Issues that might materially impact the company
  • Red flags to watch for within the widest scope of responsibility

Examples: audits, material issues, statutory requirements with highest potential for damage

Sr. Vice President

  • Issues that might materially impact the company with a need for upward communication
  • Issues needing budget approval or high resource use
  • Red flags to watch for within a wide scope of responsibility

Examples: audits, material issues, statutory requirements, conditions that could impact company health, contracts with outsourced providers

Department Manager (HR/payroll, tax, finance, IT, etc.)

  • Policies and processes specifically related to department responsibility
  • Unusual issues, conditions and events impacting area of responsibility

Examples: types of property related to department, statutes affecting department-related properties

Unclaimed Property Director/Committee

  • All company unclaimed property policies and processes
  • All unclaimed property schedules/deadlines, resources, requirements and contracts
  • Red flags to watch for, both narrow and broad, to communicate both up and down the ladder

Examples: all unclaimed property related statutes, issues, events, activities and conditions

Unclaimed Property Staff

  • Policies and processes related to the specific job being completed
  • Detailed instructions for specific statutory tasks
  • Red flags to watch for within task-related scope of responsibility

Examples: specific procedures to follow, due diligence requirements, records management steps, property identification tasks

The type of information also will determine who receives it. An audit notice, for example should trigger communication to both department managers and company leaders, because there is high risk and a need for strategy. Leaders don’t need to know about statutory changes unless there is material impact. On the other hand, unclaimed property managers must be confident in their knowledge of statutes or work with professional advisors who can take on this responsibility.

Most unclaimed property issues should be communicated through email to provide documentation and easy processing. Unusual issues with potential material impact should first be communicated through email, then followed by meetings to ensure proper handling.

The most important thing to remember about communicating unclaimed property information is simply to make sure it happens.

Topics: Risk