19.1 Unclaimed Property
The laws of the State of Georgia regarding unclaimed property are contained in the Official Code of Georgia Annotated (O.C.G.A.) Sections 44-12-190 through 44-12-235. For legal determinations, institutions are encouraged to review the O.C.G.A. to see the exact wording of the law. Refer to the cited code sections for more details using the following URL: http://www.lexis-nexis.com/hottopics/gacode/
Listed below is a highly summarized overview of the requirements of the law as it affects institutions of the University System of Georgia (USG).
Note: This overview does not cover all possible circumstances described in the O.C.G.A. It is intended to provide the institution with an overview of the common circumstances regarding unclaimed property that may be encountered at an institution.
Basically, any property that has remained unclaimed by the owner for more than one (1) year for payroll checks or five (5) years for other checks is presumed abandoned. For a USG institution, abandoned property may include, but is not limited to:
- Outstanding payroll checks
- Outstanding accounts payable checks
- Unclaimed deposits
- Unclaimed student refunds
- Unclaimed credit balances on accounts receivable
Refer to the Georgia Department of Revenue web site at https://etax.dor.ga.gov/ptd/ucp/index.aspx for more information. This information includes detail on the Unclaimed Property Act, types of property remitted to the State, when property is considered abandoned and remitted to the State, and more.
“Unpaid wages,” including “unpresented payroll checks,” are presumed abandoned after they are at least one (1) year old as of the last day of the fiscal year, June 30th. Outstanding accounts payable checks are considered abandoned when they are at least five (5) years old as of the last day of the fiscal year, June 30th.
After a property becomes “abandoned,” it must be reported and remitted to the state of Georgia Commissioner of Revenue.
Note: The institution must exercise due diligence in trying to contact the owner of the unclaimed property before it becomes eligible for reporting to the Commissioner of Revenue. Documentation of due diligence efforts must be maintained on file.
19.1.2 Contacting the Owner
Between sixty (60) and one hundred twenty (120) days prior to filing the report to the Commissioner of Revenue, the institution should make a final attempt to contact the owner. The law states:
If the holder of property presumed abandoned under this article knows the whereabouts of the owner, the holder shall, before filing the annual report, communicate with the owner and take necessary steps to prevent abandonment from being presumed. All holders shall exercise due diligence, as defined in Code Section 44-12-192, at least 60 days but no more than 120 days prior to the submission of the report to ascertain the whereabouts of the owner if the holder has in its records an address for the apparent owner which the holder’s records do not disclose to be inaccurate and the property has a value of $50.00 or more.
19.1.3 Reporting to the Commissioner of Revenue
The report and remittance to the Commissioner of Revenue must be filed before November 1st of each year. The report and remittance is filed as of the preceding June 30th.
The report must include:
The name and Social Security or federal identification number, if known, and last known address, including ZIP Code, if any, of each person appearing from the records of the holder to be the owner of any property of the value of $50.00 or more presumed abandoned under this article.
The nature and identifying number, if any, or description of the property and the amount appearing from the records to be due.
Note: Items of value under $50.00 each may be reported in aggregate.
The date when the property became payable, demandable, or returnable, and the date of the last transaction with the owner with respect to the property.
Other information that the Commissioner of Revenue prescribes by rule as necessary for the administration of this article.
Note: If the institution has changed its name while holding the property, the institution shall file with its report all prior names (and addresses).
The institution’s chief fiscal officer must verify the report. Each institution shall:
“…retain all books, records, and documents necessary to establish the accuracy and compliance of such report for ten years after the property becomes reportable, except to the extent that shorter time is provided in accordance with Article 5 of Chapter 18 of Title 50, the ‘Georgia Records Act,’ or in subsection (b) of this Code section or by rule of the commissioner. As to any property for which it has obtained the last known address of the owner, the holder shall maintain a record of the name and last known address of the owner for the same ten-year period.”
19.1.4 Institutional Responsibilities
Recommended institutional procedures to assist in complying with the Unclaimed Property law are listed below.
Establish the appropriate liability as an agency account, using Fund 60000 and Account 241100 to track unclaimed property. It is suggested that separate unclaimed property departments be established in Fund 60000 for payroll checks and accounts payable checks, such as a department named “Unclaimed Property-Payroll Checks” and another department named “Unclaimed Property-Accounts Payable Checks.” Other departments may be established in Fund 60000 as needed to track other unclaimed properties. The detail support for the journal entries must be maintained. This includes: check number, check date, payee name, and dollar amount. Sufficient information should be on file to support any future payee claims.
Review the old outstanding checks during every bank reconciliation. After one hundred eighty (180) days have passed from the check issue date, the item should be removed from outstanding checks with the amount of the check being moved into the appropriate liability department and account. If the institution does not have physical custody of the check, then the bank should be notified to place a “stop payment” on the check. The method of removing the check from the list of outstanding checks with the balance going to unclaimed property will vary depending upon financial system software design. *
* Note: Institutions using the GeorgiaFIRST model of the PeopleSoft Financials software should follow these directions:
- Mark the check as escheated per PSFIN Business Process AP.020.550 – Processing Escheated Payments. The Escheatment process will mark the payment as canceled and reconcile.
- Prepare a journal entry to move the liability from account 241500 and the original payment Chartfields to the appropriate liability department and account.
At the time of moving the outstanding check to the liability account, update the listing of unclaimed property that is maintained as required by the Unclaimed Property law. Institutions should insure adequate procedures are in place to aid in finding the “unclaimed property” since it will be removed from the list of outstanding checks.
Initiate action to try to contact the payee of the check if this has not previously been accomplished. If the payee can be located, a replacement check can be issued charging the appropriate liability department and account in Fund 60000.
At least annually, review all other accounts that have the potential to become unclaimed property. This should include all agency accounts, all deposits, all accounts receivable credit balances, etc. When any of these are determined to be unclaimed property, create a journal entry moving the balance to the appropriate liability department and account in Fund 60000. Also initiate action to try to contact the owner of the property. At the time of the journal entry, add the appropriate entry to the listing of unclaimed property.
Whenever an item of unclaimed property becomes reportable:
- Include it on the report to the Commissioner of Revenue;
- Annotate the listing of unclaimed property that this item has been remitted to the Commissioner; and,
- Include the value in the remission to the Commissioner by debiting the appropriate unclaimed property liability account when issuing the check.