On October 1, the Delaware Department of Finance (DOF) published the final version of its Reporting and Examination Manual regulation addressing audit procedures and method of estimation. See previous blog: DE Secretary of State to Begin Issuing Notices to Non-Compliant Holders in Mid-October. The final regulation is substantially similar to the August 1, 2017 draft. For more information, see our blog post from Aug. 7, 2017.
Per the final Manual:
THEREFORE IT IS ORDERED that the following Regulation 104, Department of Finance Abandoned or Unclaimed Property Reporting and Examination Manual is adopted and shall be final effective October 11, 2017 and shall apply to all reporting and examinations not complete as of that date.
With an adoption date of October 11, 2017, holders currently under a Delaware audit authorized by the State Escheator on or before July 22, 2015, will have until December 10, 2017 (60 days from October 11) to convert to the SOS VDA Program.
Unsurprisingly, the final DOF regulations do not substantially change the basic estimation and extrapolation techniques that a federal judge in last year’s Temple Inland litigation stated results in “significantly misleading results”. A number of other troubling provisions were retained in the final DOF regulations, such as the inclusion of non-Delaware domiciled subsidiaries and affiliates within the scope of an examination and a requirement that these entities provide any and all records.