Policy No. E.1.2
Initiated by: Financial Services
Approved by: Chief Academic and Scientific Officer
Date: November 15, 2006
Distribution: MBL Administrative Staff
1.0 Policy Statement:
The Commonwealth of Massachusetts has enacted legislation requiring business entities and others to review their records each year to determine whether they are in the possession of any unclaimed funds, securities or other property which is reportable under M.G.L. Chapter 200A and to make an annual report of their findings. The Massachusetts Department of the Treasury, Abandoned Property Division, (APD), oversees this process. Detailed requirements, instructions and forms can be found at http//www.findmassmoney.com.
Financial Services (FS) Office is responsible for the identification, due diligence, reporting, administration, and oversight of compliance for abandoned property, at the MBL. Typically, the predominant classification of abandoned property at the MBL has been unclaimed funds, or specifically “miscellaneous outstanding checks”. It also could include dormant credit balances in A/R accounts. Outstanding credit balances between vendors or commercial customers resulting from a transaction occurring in the normal and ordinary course of business is exempt.
2.0 Financial Services Responsibilities
2.1 Identification of Abandoned Property: Annually the FS Office will review the MBL books and records. Property that has been dormant for 3 years as of June 30th each year will be targeted for Due Diligence efforts. The Due Diligence is normally conducted from July through September. This Due Diligence is done in conjunction with the APD’s web site to determine whether the MBL is in possession of abandoned property for the applicable reporting year. A formal Report along with the remittance of abandoned property must be completed by November 1st each year.
2.2 Due Diligence: The FS Office will follow the APD’s requirements regarding due diligence procedures to locate the holders of identified abandoned property. This process includes the sending of due diligence notices by first class mail to the last known address of every owner of property valued at $100 or more. For holders
without known address information on file, FS will use whatever contact information available to attempt to locate the holder.
2.3 Remittance to Holders: In cases where holders are located, the MBL will return the abandoned property to the holder. This will typically be executed via check. In the event that the holder requests the property be forwarded elsewhere, the request must be evidenced in writing.
2.4 Report and remittance to the Commonwealth: The FS Office will comply with the reporting requirements and due dates set forth by the APD. Property belonging to holders who could not be located will be remitted to the Commonwealth of Massachusetts along with the annual reporting package by the MBL Controller. For each applicable reporting year, the MBL’s accounting records will be updated to reflect that the identified abandoned property has been returned in accordance with the holder’s request or forwarded to the Commonwealth. MBL shall maintain all owner records and other information submitted in the report for a period of six years following the remittance.
3.0 Violation of Abandoned Property Policy
The Commonwealth of Massachusetts has small penalties for not filing or for failing to perform due diligence, $500 and $1000 respectively, plus interest on the delay in the abandoned property that should have been remitted. The major concern is to file. For organizations that file, audits are limited to a six year window. For those who don’t file, the Commonwealth could look back well beyond six years.
Employees who violate this policy will be disciplined by the MBL. Such discipline may result in termination of employment.
Any member of the MBL Community having knowledge of violation of this policy should contact either the Chief Financial Officer or the Director & CEO.
4.0 Policy Clarification and Updates:
Policy clarification and updates are available from the Financial Services Office.