- (a) The objective of Phase IV of an unclaimed property examination is to conduct testing, as necessary, to determine the overall escheatable property due and owing for the entire period under examination. As discussed in Phase I, sampling and extrapolation may be performed after approval from the State Controller's Office. If, due to record retention policy constraints, less than the entire examination period will be examined, the objective of this Phase is to determine the base period to be utilized, calculate total escheatable property generated during the base period (i.e., amounts escheated, plus amounts suspended, plus amounts written off), extrapolate total escheatable property results from base period to entire period, then credit amounts actually escheated.
- (b) This phase commences with discussions between the third-party auditor and the holder regarding the design of the Phase IV examination program. If the third-party auditor determines that a site visit or virtual visit is needed, the third-party auditor and the holder shall decide upon a mutually agreed-upon date for one or more site or virtual visits to perform testing procedures and select samples for testing. Alternatively, the third-party auditor may request that samples be produced electronically for testing. The holder shall produce documentation supporting its accounting for the items selected within 60 days or an otherwise agreed-upon time period. If the holder believes it has been responsive to the third-party auditor's requests, but the third-party auditor disagrees, the holder has an additional 30 days, or an otherwise agreed-upon time period, to provide additional documentation to the third-party auditor to support its position.
- (c) Because many holders have multiple divisions, subsidiaries, and affiliates, and generate various types of property that require examination, separate analyses and reports will be prepared, so that the State Controller's Office may receive property as amounts due are determined, and not wait for all areas to be completed.
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).