Top 5 reasons to accept a Delaware unclaimed property VDA invitation

5 reasons to enroll in the Delaware unclaimed property VDA program

1. Waiver of interest and penalty: Delaware’s unclaimed property audit program enforces interest of up to 50%, whereas the VDA program waives the penalty.

2. Shortened duration: The self-audit via the VDA program must be completed in 18-24 months, in contrast to the Delaware’s state-administered audit program which has no time limit and often lasts 5 years or longer.

3. Preferable voided check aging criteria: The VDA program vastly reduces potential liability through 90-day aging criteria for researching voided checks in unclaimed property populations, versus the audit program, which requires 30-day aging criteria.

4. Ability to deal with Delaware only: The DE SOF employs third-party, contingently paid, audit firms who represent all states. As a general practice, these audit firms immediately shop the unclaimed property audit assignment to their multiple state clients ensuring that the Delaware state audit becomes a multi-state audit.

5. The VDA is corporate-friendly: The DE SOS exists to serve as a corporate connection to Delaware’s business friendly government, while the DE SOF’s purpose is to collect revenue. Though the VDA program has significant requirements and is a serious undertaking, it is vastly more advantageous to corporations compared to the audit program, which is run by contingent fee firms who are incentivized to maximize collections.

Since corporations who receive an invitation to the Delaware Unclaimed Property VDA program will, by statute, be in either the VDA or audit program, choosing the VDA program is a no-brainer based upon the above comparison.

6 best practices to implement before enrolling in Delaware’s unclaimed property VDA program

1. Determine if your company has previously enrolled in the VDA or audit program:

   Delaware’s unclaimed property VDA and audit programs have existed in various formats for many years. If your company has completed a Delaware VDA or audit, and the scope has expired or the terms were not met, then it may be advantageous to enroll in the latest version of the Delaware VDA program to avoid the risk of audit.

2. Review merger & acquisition activity: For merged or acquired entities incorporated in Delaware that are non-compliant, the Delaware VDA program is a great option to comply with your unclaimed property obligations and eliminate interest and penalties.

3. Record retention: Determine your company’s sources of unclaimed property, and the availability of researchable records.

4. Response team: The Delaware VDA program is a verified, self-audit with specific rules that require input and data from many departments. Consider assembling a multi-discipline response team to include participants from accounting, finance, treasury, human resources/benefits and legal. It is advisable (and recommended by the DE SOS) to retain external advisors/advocates who are familiar with navigating the requirements of the Delaware VDA program.

5. Policies and procedures: Gather and review your company’s existing policies and procedures (if any) for the treatment of aged liabilities and obligations.

6. Historical filings: If possible, gather all of your company’s prior escheat filings for the last 10 years or as far back as available.

How to get expert help with the Delaware unclaimed property VDA program

The Delaware VDA program is better than an audit, but you will not want to face it alone.

The program is disruptive to even the most prepared firm, and it is why our consulting team is focused on making the self-audit process easier while delivering exceptional results to our clients.

Knowing when and how to approach the state proactively, anticipating requests for information and knowing what to look for in historical records, are just a few of the valuable insights our clients benefit from.

As your consulting partner, we are committed to giving you the knowledge and comfort you need to be confident in the handling of your Delaware unclaimed property VDA. We act as the liaison between you and the state, delivering steady communication and reporting through the process.

Successfully complete Delaware’s VDA program with the help of our team

Our unclaimed property advisory team are ready to discuss the Delaware VDA program with you and share how they can ease your company through the process by:

• Ensuring Delaware’s record requests are reasonable and within scope

• Quantifying the Company’s unclaimed property by entity and property type

• Testing and remediation to ensure that only property that is truly reportable is identified

• Selecting favorable and proper strata for potential estimation periods

• Continually moving the Delaware VDA process forward at a reasonable pace to ensure program deadlines are met

• Negotiating final resolution of the Delaware VDA