The Find of a Lifetime
Rick Roybal, CISA
Internal Audit Manager
The Bass Companies
Fort Worth, Texas
Occasionally, internal auditors stumble upon a “find of the lifetime” when they discover that several employees in their company have been surreptitiously bilking the business for millions of dollars. These auditors are given a red carpet, a bigger office, and celebrity-like treatment; they might even find their names in a forensic accounting textbook one day. But let’s be honest, how many of you can put that on your resume?
Since you may not be included in that group of superstar fraud-finding auditors, you might spend the rest of your internal audit days performing revenue, accounts payable, treasury, and perhaps even an integrated audit where you get to combine your IT audit skills with a business-process cycle. But is there more to internal audit life than this? Yes! Are there days you just enjoy using your audit skills and IT-savvy to dig a bit deeper and make that big find? I had one of those days recently.
I had been told by a colleague that the state of Texas had a website where you could claim unclaimed property. Unclaimed property, according to the state of Texas, is “overpayments, co-op dividends, abandoned bank accounts, royalties, and the contents of safe-deposit boxes — that state law requires the Comptroller to hold for its rightful owners.” Intrigued, I read on and stumbled upon this gem of a statement: “One in four Texans has unclaimed property from forgotten bank accounts, uncashed checks, security deposits, and utility refunds. It’s your money, and we want you to get it back.”
Armed with that knowledge, I couldn’t wait to begin my search. I entered my last name in the search field and voila! Well, as unique as my last name is, I got some hits. I scrolled down and even further down the search results page: Not one thin dime was owed to me. (Guess I’m not going to take that vacation this year.) Still, undeterred and feeling generous towards friends and family, I searched their names. Aha! My dad was owed US $50 by a telephone company. Now this was getting exciting. I thought, how about I try my company’s name? Guess what I found? Money. It was at this point that my audit wheels got spinning.
I started asking myself: Does anyone monitor this? Who owns this process? What is the actual process? Who can claim the unclaimed property? How often is this performed? What type of documentation or identification is needed to make a claim? Are there fees involved with making a claim? If management decided not to pursue a claim, is there a risk of not making a claim? If a claim is collected, how are the funds allocated to the partners?
I met with my boss later that morning to discuss my findings. He recommended that I perform an audit over this area.
A month later, I had completed my fieldwork, performed some testing, and issued a number of recommendations within my audit report. The audit report was well-received and the recommendations were later adopted by the company. Who doesn’t love an auditor who makes process improvements and finds money?
Think I’ll find my name in a collegiate textbook because of this audit? My guess is “no.” And I probably won’t walk in my office one day to find that they have replaced the drab carpet with plush red. But with a monetary find like that, what a great addition to my resume!
If you decide to look at this area, may I suggest the following?
- Begin your search at www.unclaimed.org. From this site, you can navigate to all 50 states’ unclaimed property websites.
- Do not limit your search to your corporate office’s home state. Perhaps your organization has a collection center in another state; search that state, as well. Consider the states where the organization maintains lockboxes.
- Search variants of your organization’s name. For example, if you work for Wells Fargo, you may want to search “Wells Fargo,” but also “WellsFargo,” “WellFargo,” or even “Fargo Bank.” You may even want to try abbreviations and misspellings of your organization’s name.
- Some state unclaimed property websites provide instructions on how to best use their search engine. Take advantage of their instructions, as search engine rules may differ from state to state. For example, some states’ search engines allow the use of wildcards (e.g., “and” or “+”), while other states do not.
- Remember, these payments most likely have been escheated to the state because they didn’t make it to your organization’s lockbox or accounts receivables department. The question auditors have to ask is why. Perhaps your organization’s invoices are the source of confusion. Has your organization recently changed its remit address and not announced it to its customers?
- Look for patterns among the companies and reporting institutions that escheated the property. Is there a particular company that continually escheats? Should your accounts receivable department call them to ensure that they have the correct remittance address or the correct spelling of your organization’s name?
Posted on Apr 12, 2011 by Tim
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