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Abandoned or Unclaimed Property
VDA Program



Converting an Audit to a VDA FAQs


Pursuant to 12 Del. C. § 1172(b), any Holder currently under audit that received a notice of examination from the State Escheator on or before July 22, 2015, except any securities examinations in which estimation is not required, may convert the pending examination into a review under the SOS VDA Program under 12 Del. C. § 1173.

Holders under audits which were initiated on or before July 22, 2015 may choose, within 60 days following the adoption of regulations regarding estimation that are to be promulgated by the Department of Finance (expected to be adopted on or before December 1, 2017) to (i) have that audit converted to a VDA or (ii) to have the audit fast-tracked to a two-year, expedited process.

Eligible Holders must file an executed copy of a Notice of Intent to Convert (“NOI”) within 60 days of the adoption of regulations pursuant to 12 Del. C. § 1176(b). The regulations are expected to be adopted on or before December 1, 2017. NOI must be signed by a duly authorized officer of the Company seeking to convert. NOI may be submitted electronically or by mail as detailed below.

Secretary of State, State of Delaware
ATTN:  SOS VDA Program
Townsend Building
401 Federal Street, Suite 3
Dover, DE 19901
 sos.vda@state.de.us
302-577-8959

Holder’s audit work papers will not be transferred to the Department of State. There will be no coordination or consultation with the Department of Finance or any third-party audit firm regarding the Holder’s audit and the Department of State.

However, it is expected that for many Holders the scope of the audit has been determined based upon property types and/or included entities. Since most of the analysis and review performed to date by the Holder will be based on the property types / entities scoped in by the auditors, in the interest of efficiency, Holders are expected to, at a minimum, utilize the same audit scope in the VDA.

For Holders converting to a SOS VDA, the Department of Finance will provide a memorandum outlining the previously agreed-upon scope of the audit. This is a potential starting point. In those instances when the same scope is utilized additional information related to the scope of the VDA may not be required.

Holders may expand the scope to receive the benefit of the release of liability and indemnification provided by Delaware law for the reporting of unclaimed property in good faith.

In the case of audits converting to a VDA, Holders will not be expected to start from the beginning of the VDA process. Instead, the expectation is that Holders will utilize the records reviewed and analysis performed to date in the audit, as well as perform any additional self-review required, in order to present the Holder’s findings of past due unclaimed property liability to the Secretary of State for validation, and ultimately settlement. The presentation of the Holder’s findings shall be in accordance with the Implementing Guidelines and SOS VDA Regulations. When the VDA deliverable and schedules are presented, the findings will be validated by the Department of State in accordance with the Implementing Guidelines and SOS VDA Regulations.

 


Legal Disclaimer: The materials contained herein are intended to provide information in regard to the subject matter covered. The Delaware Department of State is not engaged in rendering legal, accounting, or other professional services. If legal advice or other professional assistance is required, the services of a qualified professional should be sought.

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