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Uncashed State Checks

Uncashed State Checks. Kelly Kuracina, Jennifer Brown – OSC Office of Unclaimed Funds Peter Clark, Michael Wukitsch – OSC Bureau of State Accounting Operations. Agenda. Introductions Unclaimed Funds 101 Office of Unclaimed Funds Abandoned Property Law

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Uncashed State Checks

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  1. Uncashed State Checks Kelly Kuracina, Jennifer Brown – OSC Office of Unclaimed Funds Peter Clark, Michael Wukitsch – OSC Bureau of State Accounting Operations

  2. Agenda • Introductions • Unclaimed Funds 101 • Office of Unclaimed Funds • Abandoned Property Law • Section 1315 – Uncashed State Checks • Section 1422 - Due Diligence Requirements • Reporting Timeline • Outreach & Reporting • Prior Practice - Outreach • New Process - Outreach • Process Improvements • Phases

  3. Introductions • Office of Unclaimed Funds: • Kelly Kuracina, Assistant Bureau Director • Jennifer Brown, Manager of Holder Education & Research • Bureau of State Accounting Operations: • Peter Clark, Accounting Manager • Michael Wukitsch, Accountant, Comptroller’s Refund & Project Mgmt.

  4. Unclaimed Funds 101 • What are “unclaimed funds”? • Funds (cash and equities) that have been dormant for a set period of time. • How much is unclaimed? • $12.5 Billion! • Where do the funds come from? • Banks, Corporations, Brokers, Insurance Companies, Courts, State Agencies & Institutions, and more. • Last year - received $825 million from holders ($37m from state checks). • Where does the money go? • State’s General Fund until the rightful owner claims it. • Last year - returned $347 million to owners and transferred $715 million to the General Fund.

  5. Office of Unclaimed Funds • Core Functions: • Pay claims. • Process reports from holders. • Audit holders to ensure compliance with the law. • Key Services: • Raise public awareness about unclaimed funds. • Seek out and return unclaimed funds to rightful owners. • Provide guidance and expertise to holders and filing options that facilitate the reporting process. • Create, maintain and publish a database of owners. • www.osc.state.ny.us/ouf/index

  6. Abandoned Property Law (APL) • Enacted in 1943, defines abandoned property and holders. • Establishes the Comptroller as “custodian” of unclaimed funds. • Serves to safeguard lost or forgotten assets belonging to NYS residents. • Directs holders in the proper disbursement of property deemed as abandoned or unclaimed. • Produces revenue stream for the State.

  7. APL – Section 1315 • Any amount representing an unpaid check or draft issued by the State of New York, or a debit card issued on behalf of the State of New York for the purpose of paying a tax refund, which shall have remained unpaid after 1 year from the date of issuance in accordance with Section 102 of the State Finance Law shall be deemed abandoned property and shall be paid to the State Comptroller.

  8. APL – Section 1422 • At least 90 days prior to the final report, a first class mailing must be made to each person whose name is expected to appear on the report unless the address is unknown or the holder can demonstrate that the address it has for the owner is not the owner’s current address. • In addition, at least 60 days prior to the final report, a certified mailing, return receipt requested, must be made to each person whose name is expected to appear on the report whose abandoned property is valued in excess of $1,000.00 unless a claim has been initiated since the first class mailing was sent, or the first class mailing was returned as undeliverable.

  9. Reporting Timeline • December 10 • First class mailing completed • December 31 • Cut-off Date • January 10 • Certified mailing completed • March 10 • Final Report and Remittance Due

  10. Prior Practice - Outreach • General Checking – Joint Custody Account (“A” Checks) • DTF Treasury conducted outreach, received and tracked responses to outreach letters and reported outstanding checks to OUF. • Comptroller’s Refund Account – OSC Sole Custody Account (“P” Checks) • OSC conducted outreach, received and tracked responses to outreach letters and reported outstanding checks to OUF.

  11. New Process - Outreach • OSC and DTF Treasury will conduct outreach for Joint Custody and Sole Custody Accounts (“A” and “P” checks) • Outreach letters for uncashed checks issued in 2012 will be mailed in November 2013. • Originating agencies will be the point of contact for the payee to request reissuance. • OSC and DTF Treasury will report uncashed checks to OUF • Checks issued in 2012 will be escheated to OUF on or before March 10, 2014.

  12. New Process DTF/OSC Escheats Outstanding Uncashed Checks to OUF

  13. New Process - Outreach • “A” Checks - Outreach Letter Check ReplacementThe process for replacing checks via outreach letter requests will be consistent with the current SFS check replacement procedures. Signed outreach letters that are returned will serve as authorization for reissuance of a check to the vendor. Please return completed letters to Treasury at: NYS Division of the Treasury PO Box 22119 Albany, NY 12201-2119 or fax to 518-435-8625. • If a vendor returns a form indicating an address change, the address must be updated in SFS prior to submitting the outreach letter to Treasury. • All forms must be returned to Treasury.

  14. New Process - Outreach • “P” Checks - Outreach Letter Check Replacement • The process for replacing checks via outreach letter requests will be consistent with the current SFS check replacement procedures. Signed outreach letters that are returned should be treated as a written request for reissuance of a refund check that agencies would see in the normal course of business. • To replace checks based on outreach letters, the agency will need to send the Bureau of State Accounting Operations Refund Unit an e-mail request at revtax@osc.state.ny.us. The e-mail request should identify the account name, check number, date, amount, and payee.

  15. New Process - Outreach • “P” Checks continued • The OSC refund unit will check with the bank to verify that the check has not been cashed after the outreach letter was returned to the agency, and then process the agency’s cancellation request. • There is also a SFS query run daily to confirm cancellations, if you would like to receive a copy of this instead of transmittal letters please send a request to the revtax mailbox. A more comprehensive overview of the refund process is available in the Guide to Financial Operations, Section XII.9.G.

  16. Process improvements • Consistent outreach process and letter format to vendors, state citizens and others for all warrant types. • Streamlined business process – leverages existing agency business processes for check replacement and closing the voucher. • Bank account used for issuing original check will be used for replacement checks with an audit trail. • Replacement checks will be issued with a different check number. • Check Clearing Data – available in SFS, extract available.

  17. Phases • Phase 1: Generate outreach letters for all warrants and mail letters to payees. • November 2013 • Phase 2: Cancellation requests sent to OSC. • By December 31, 2013 or turned over to OUF. • Phase 3: Generate escheatment file to OUF. • March 2014

  18. Phases • Phase 4: Future Enhancements: • OSC and DTF Treasury will develop procedures to do monthly outreach instead of annual. • Work with SFS to develop enhancement to capture outreach details. • Work with Agencies to provide payee data in consistent format.

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