Compliance Is Our Goal

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• Compliance Is Our Goal

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Compliance Is Our Goal

• Measure level of compliance
• Identify Reasons for Non-Compliance
• Identify Potential Holders
• Implement Compliance Program

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Measure Industry Compliance
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Measure Industry Compliance
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Measure Industry ComplianceArizona

• From a 2002 joint study by the Dept. of Commerce
  and ASU, there were 664,454 businesses operating
  in Arizona. 162,255 of those were either
  corporations or LLCs.
• In 2002, Arizona received a total of 16,071
  reports equating to about 134,000 new properties
  and over 48M, but 5,049 of those reports were
  negative.
• As every business has the potential to generate
  Unclaimed Property, the basic compliance rate
  could be as low as 2.

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Reasons for Non-Compliance

• Lack of knowledge

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Holder Education and Awareness

• Presentations to professional organizations
• Self reporting guides which include common
  industry and property information
• On-site holder consultation visits
• Holder education workshops

FOR MORE INFO...
See the Holder Reporting Booklet 601 or Brochure
201 in the forms section at AZDOR.gov
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Reasons for Non-Compliance

• Staff turnover
• Poor accounting systems
• Economic Political factors

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Reasons for Non-Compliance

• Business decision to risk the cost of non
  compliance
• No perceived threat for non compliance
• Unclaimed Property law is not a priority

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Identify Potential Holders

• Unclaimed Property Database
• State Regulatory agencies
• Business Association publications
• Hoovers

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Identify Potential Holders

• Manufacturers www.thomasregister.com
• Public traded www.sec.gov/edgar
• Financial institutions www.ffiec.gov
• Company websites

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ImplementCompliance Program
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Desk audits Self-guided / Managed audits

• Strengths
• Most business people will comply when they are
  made aware of the requirement.
• Allows businesses to do the work at a more
  reasonable pace than under formal audit.
• Penalties and interest are waived for voluntary
  compliance.

FOR MORE INFO...
Contact the Holder Compliance Unit Auditing
Unclaimed Property _at_AZDOR.gov
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Desk audits Self-guided / Managed audits

• Weaknesses
• Difficult to detect intentional non disclosures
• Not an alternative to field audit program
• Requires holder acceptance and a commitment equal
  to that of being under formal audit.

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Researching Holder

• Analysis Worksheet
• Number of employees
• Total assets
• Type of business
• Type of equity structure
• State Date of Incorporation
• Mergers Acquisitions

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Researching Holder

• Financial Institutions
• Total deposits/shares
• Total members (credit unions)
• Trust Assets (if bank has fiduciary powers)
• Hospitals and Nursing Homes
• Number of beds
• Occupancy rate
• Private pay

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Researching Holder

• Oil Gas companies
• Number of wells
• Production data
• Utilities
• Number of customers
• Types of services

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Researching Holder

• Insurance
• Type of products
• Total Premiums written

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Analyzing Reporting History

• Analysis worksheet
• Did the holder file a report each year?
• How much? Property types? Dates?
• Did the holder report property types common for
  its industry type?
• Do the dormancy dates appear to be consistent
  with legal requirements?

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Researching Holder

• History of Holder Operations

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Unclaimed Property Questionnaires

• Wake-up call

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Questionnaires

• Financial Institutions
• Demand and Time accounts
• What updates the Date of Last Activity
• Commercial bank checks
• Open and closed accounts
• Trust department
• Securities
• Safe deposit boxes, safekeeping, collateral

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Questionnaires

• Retailers
• Does the company issue
• Gift certificates? Merchandise certificates?
  Credit slips?
• How are they aged?
• Are there expiration dates?
• Who is purchaser?
• Accounts receivable credit balances
• Layaways

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Questionnaires

• Utilities
• Deposit refunds
• Credit balances
• Nursing homes
• Personal fund accounts

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Questionnaires

• Insurance
• Types of policies written
• Number of policies written for each type with WV
  address

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Questionnaires

• Questions common to most types of business
• Payroll
• Disbursement checks
• Account Receivable credit balances
• Small credit balance write offs
• Defined benefit plans (non ERISA)
• Securities Dividends
• Compliance contact information

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Unclaimed Property Questionnaires

• Send audit letter and questionnaire
• Identify potential weakness in their accounting
  procedures
• Identify control weaknesses
• Assists in defining scope of review

FOR MORE INFO...CONTACT CAROLYN 304-340-1593
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Desk audits Self-guided / Managed audits

• Analyze Questionnaire
• Identify weaknesses
• Identify areas of review

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Desk audits Self-guided / Managed audits

• Respond to Company
• Standard responses
• Define time period of review
• Set time for completion

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Desk audits Self-guided / Managed audits

• Evaluate Report filed

or
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Desk audits Self-guided / Managed audits

• Verify report by reviewing holders work papers

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• THE END