Posted on Tuesday, 29th September 2009 by Keane Unclaimed Property Team

I recently learned about some interesting statistics regarding Delaware’s abandoned property law that helps illustrate what unclaimed property means to state budgets. It also shows why companies are facing an increased risk of unclaimed or abandoned property audit.

This is an issue I have discussed in the past - as the states face tighter budgets and decreasing revenue, they have looked to other sources, like unclaimed property reporting and audit proceeds, to help make up the difference. It is a risk that can have a material impact on your company’s cash flow and financial well-being.

My colleague at Keane Unclaimed Property, Laura Lane, shared with me the information that was recently disclosed by the Delaware Economic and Financial Advisory Council (DEFAC). DEFAC meets six times a year to set forecasts for the State’s finances and shares the minutes of those meetings online.

The minutes of the the June 15, 2009 meeting were recently posted and contain some interesting insights into how the abandoned property law impacts the state budget. For example, for the fiscal year ended June 30, 2010, the forecast for “Abandoned Property” increased from $330 million to $350 million. Additionally, the minutes indicate that the $20 million increase is attributable to the settlement of ONE large case. Large indeed!

This makes unclaimed property or abandoned property the third largest source of revenue for the State of Delaware. It is not just a large contributor to the state’s revenue – its one of THE largest and most significant.

It’s a harsh reality for companies that are incorporated in Delaware – the ones that are most at risk. It’s not clear exactly where the state thinks the money will come from, but it is difficult to imagine that they could maintain and grow the amount of money collected year-over-year without continuing to aggressively enforce their statutes through audits (and assessing fines and penalties). This is a clear illustration of why companies must be well prepared by reporting properly on an annual basis and ensuring that they have identified and corrected any accounting practices that would raise the eyebrows of the auditors.

While you may not be aware of your vulnerabilities, the states are. They’re so confident that it’s in the budget.

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Posted on Thursday, 17th September 2009 by Keane Unclaimed Property Team

On October 14th, 2009 a seminar exploring the impact of state escheatment laws will be held by accounting firm Cherry, Bekaert, and Holland (Greater Washington D.C. office) in partnership with the unclaimed property experts at Keane Unclaimed Property.

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Posted on Tuesday, 15th September 2009 by Keane Unclaimed Property Team

This post by Gail Warner, President of Keane Unclaimed Property, appeared on Keane Unclaimed Property’s corporate blog, “KeaneObservations” written by Peter Teuten, Keane Unclaimed Property’s risk management expert.

I’m picking up where Peter left off last week regarding the topic of unclaimed property audit and how it relates to risk management and compliance.

The words audit and risk go hand in hand. The word “audit” alone makes anyone in a corporate finance or risk management department cringe and begin vigorous preparations (and palpitations!). But in the case of an unclaimed property audit, that natural reaction tends to be a mix of confusion and uncertainty. It’s much more important now that companies understand the drivers of unclaimed property risk because audits are on the rise. Depending on state laws (and the extent of some state’s budget woes), unclaimed property offers states an attractive source of alternate capital (you see, much of the money states collect from companies is often used on state programs that would otherwise not happen or would require the use of additional tax dollars).

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Posted on Friday, 11th September 2009 by Keane Unclaimed Property Team

By Peter Teuten, President of Keane Unclaimed Property’s Business Risk Management Solutions

Ignorance is bliss – right? I think we have all come to view that cliché with disdain during the economic crisis. The known risk is often the most easy to manage. The hidden risk is obviously less easy to measure, manage and monitor. This was/is true of the highly leveraged mortgage and lending industries, the Wall St. investment banks, and even government.

An example of this kind of hidden risk that I see a great deal of is in the area of unclaimed property and reporting.

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