1. (a) The objective of Phase I of an unclaimed property examination is to determine the particular entities, business units, and third-party accounts to be examined. This phase commences with a telephone conference call or virtual meeting (the opening conference) between the third-party auditor and the holder, at which time the third-party auditor requests basic corporate and unclaimed property data and information. The third-party auditor may request that the data and information be produced electronically. The holder shall respond to the data and information requests either within 60 days or an agreed-upon time period.
2. (b) The third-party auditor shall inform the holder that if the holder has fully reliable records for the examination period, there is no need for estimation techniques. The holder shall also be informed through receipt of a copy of these regulations, that if it (i) wants to question the accuracy of its own records or (ii) does not have records for the entire period, then a sampling and extrapolation may be performed after approval from the State Controller's Office. The State Controller's Office shall weigh the information provided to it and allow or disallow sampling and extrapolation based on what method is most effective to adequately capture the unreported unclaimed property. The third-party auditor shall advise the holder of the parameters of the sampling technique and try to reach an agreement with the holder as to the integrity thereof. Failure to reach such an agreement, however, shall not halt the examination. If sampling techniques are used, the third-party auditor shall inform the holder that the liability determined by the third-party auditor shall represent a fair estimation only.

Note: Authority cited: Section 1571, Code of Civil Procedure. Reference: Section 1571, Code of Civil Procedure.

History

1. New section filed 4-22-2025; operative 7-1-2025 (Register 2025, No. 17).