309.1 - Procedure for Reconciling, Reporting, and Escheating Abandoned Property

Title

University of North Carolina at Chapel Hill Finance Procedure 309.1 - Procedure for Reconciling, Reporting, and Escheating Abandoned Property

Introduction

Purpose

To maintain appropriate fiscal reporting and ensure internal controls are met to prevent fraud, all unclaimed property, primarily in the form of uncashed checks issued from university checking accounts to include payroll checks, accounts payable checks, and departmental imprest checking account checks, must reconcile their accounts and report outstanding uncashed checks from the previous fiscal year at the conclusion of the current fiscal year to Cash Management. All unclaimed property escheats to the state of residence of the property holder. States have different time frames to escheat unclaimed property and the minimum threshold amount that requires a due diligence letter. North Carolina Escheat Statute (Chapter 116B) requires a one (1) year holding period before unclaimed property can escheat to the State.

Scope of Applicability

All imprest checking accounts, payroll account, and accounts payable account of the University of North Carolina at Chapel Hill.  Additionally, all other unclaimed property reported by departments of the university to include student account credit balances by the Cashier's Office and supplier credit balances by Accounts Payable.

Definitions

Escheat - the succession of abandoned property to the State. It results from the failure of a person legally entitled to the property to make a valid claim against the holder of the property within a prescribed period.

Owner - a person who has a legal or equitable interest in property subject to this Chapter or the person's legal representative. The term includes a depositor in the case of a deposit, a beneficiary in the case of a trust other than a deposit in trust, and a creditor, claimant, or payee in the case of other property.

Person - means an individual, business association, financial organization, estate, trust, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

Property - means

1. Money or tangible personal property held by a holder that is physically located in a safe deposit box or other safekeeping depository held by a financial institution within this State or
2. A fixed and certain interest in intangible property or money that is held, issued, or owed in the course of a holder's business, or by a government, governmental subdivision, agency, or instrumentality, and all income or increments therefrom.

The term includes property that is referred to as or evidenced by:

1. Money, a check, draft, deposit, interest, or dividend;
2. Credit balance, customer's overpayment, gift certificate, security deposit, refund, credit memorandum, unpaid wage, unused ticket, mineral proceeds, or unidentified remittance;
3. Security or other evidence of ownership of an interest in a business association;
4. A bond, debenture, note, or other evidence of indebtedness;
5. Money deposited to redeem stocks, bonds, coupons, or other securities, or to make distributions;
6. An amount due and payable under the terms of an annuity or insurance policy, including policies providing life insurance, property and casualty insurance, workers' compensation insurance, or health and disability insurance; and
7. An amount distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profit sharing, employee savings, supplemental unemployment insurance, or similar benefits.

Procedure

Accounting Services, Payroll Services, the Office of Sponsored Research, and Departmental petty cash and imprest checking account custodians will review outstanding checks periodically and report those that are outstanding for more than 360 days to the Cash Management Unit of Accounting Services. Please see the Sample of Time Table to Escheat Unclaimed Property for guidance on reportable dates.

Between 60 and 120 days prior to the check being outstanding for one-year, imprest checking account custodians will make a final attempt to contact the payee of the outstanding check. If attempts to contact the payee are successful, the custodian shall void and reissue the check. If attempts to contact the payee are unsuccessful, then the check shall be escheated. All efforts in this process will be documented.

Exceptions

None.

Forms

• Finance Related Data 309.1.1rd - Uniform Escheatable Property Report

Related Requirements

External Regulations and Consequences

• North Carolina Escheat Statute (Chapter 116B), Escheats and Abandoned Property (G.S. § 116B-1 through § 116B-80)

University Policies, Standards, and Procedures

• Finance Policy 309 - Policy on Escheats
• Finance Policy 304 - Policy on Petty Cash Funds
• Finance Policy 306 - Policy on Imprest Checking (Bank) Accounts
• Finance Policy 704 - Policy on Distribution of Checks for Goods and Services
• Finance Procedure 704.1 - Procedure for Distributing Checks

Contacts

Policy Contact

Cash Management Unit of Accounting Services
Email: Cash_Management@unc.edu
Telephone: (919) 962-0036