Unclaimed property holders have been facing significant challenges in meeting state reporting and due diligence deadlines, with COVID-19 restrictions beginning during the spring reporting season. Further, the National Association of Unclaimed Property Administrators (NAUPA) has produced a new electronic filing format that has not been uniformly adopted by the states.
States continue to pursue businesses for the failure to report or for underreporting unclaimed property. This includes utilizing both in-house auditors and third-party audit firms. The number of third-party audit firms is growing, and they are expanding the scope of their audit review.
A comprehensive review of compliance processes and, if necessary, addressing areas of noncompliance are essential to preserving cash flow and mitigating potential unclaimed property exposure. Now is a good time to examine unclaimed property compliance, with the fall reporting season generally beginning at the end of June.