Corporate asset recovery – Practical considerations for ...
Transcript of Corporate asset recovery – Practical considerations for ...
Prepared for National Association of Division Order Analysts (NADOA) Annual ConferenceSeptember 8 - 10, 2021
Corporate Asset Recovery – Practical Considerations for Oil and Gas Companies
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KPMG disclaimer
The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.KPMG LLP does not provide legal services
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Contents
Unclaimed property – why are we here?— Asset Recovery
- Benefits- Potential cons
— Before pursuing claims- Internal compliance checks- Policies and procedures- Compliance gaps resolution- Reducing unclaimed assets, pre-escheat consideration
— Preparing claims, searches- How to gain efficiencies, when to search- Preparing claim documents- What administrators look out for
— The Claims submission process- Garnering trust- Responding to questions- Other considerations, fraud concerns, providers, benefits, cost
— Questions and contact info
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Benefits to asset recovery
Cash is king— Almost $50 billion in unclaimed funds
- Texas > $3 Billion- Florida > $2 Billion- California > $9 Billion
— Can add to department/company budgets
— Think about the direct, measurable value that you can add to your company's bottom line
— Re-occurring, unexpected income stream
— Wide range of claim values— Stimulus = incentive
Corporate asset recovery
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Before pursuing claims
— Ask the questions:- is my company filing?- What property types have we reported?- To which state?- For how long?- Are we covering all of our product types and
revenue streams?- Have we accounted for subsidiaries?
Acquisitions?
— As part of your compliance review, you may want to conduct a self-audit of policies and procedures:- Are they formal and written?- If so, are the P&P followed?- Have roles been assigned?- Definitions, timelines, and matrices
Internal compliance checks Policies and procedures
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Before pursuing claims
— Consider VDAs or First time filings— VDAs offer several benefits (compared
to audits)- Shortened look back period- Waiver of interest and/or penalties- Increased control over the process by
holders - Allows holders to determine “in-scope”
entities and property types- Allows holders time to reduce exposure prior
to remittance— Even holders that previously completed VDAs
with, or audits by, the states may allow companies to periodically complete VDA programs to cover subsequent acquisitions
— DE domiciled companies
— USE YOUR NETWORKS— A surprising amount of fortune 500 companies
report unclaimed assets of other fortune 500 companies
— Respond to letters— Send your own “outreach” letters:
- Working interests, JIB- Complex entity structure- Recent turnover, change of responsibilities
— What to include:- Provide a name, direct line, listing of entities- Don’t request or provide to much info- Remember purpose of outreach
Resolve compliance gaps Reduce unclaimed assets
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Establishing a compliance program
— Review Organizational history- Organization charts- Trial balances- Tax returns
— Systems evaluations- Disbursement
accounts- Processes and
procedures- Customer accounts- Product types
— Quantifies any risks identified during risk assessment phase- Insurance
premium refunds- Claims
disbursements- Offers to settle
— Involves a detailed analysis of accounting records- Check registers- General ledger
disposition accounts
- Remediation research and due diligence
— First time filings — VDAs (formal and
informal)— Penalty and interest
abatement— Cost-benefit
analysis and return on investment considerations
— Policy development- Role assignment- Templates- Definitions,
timelines, and matrices
Risk Assessment Exposurequantification
Resolution of compliance gaps
Policy and procedure development (ongoing)
Ready to start claiming assets?
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Claims process and submission overviewConducting searches, preparing claims
Claim monitoring and performance
reports
Phase 1 –Feasibility
review
Phase 2 –Property
identification
Phase 3 –Claims
submission
Phase 4 –Ongoing property
identification
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How to gain efficiencies, when to searchConducting searches, preparing claims
Phase 1:Gain efficiencies: — Use the aggregation websites to your advantage— Missingmoney.com – 42 states— Findmyfunds.com – 26 states (includes, WA, OR, WY, DE, CT, NJ)
- Total coverage of almost all 50 states— Consider searching remaining websites independently (e.g. CA)— Identify, save, expand, repeat
- Common nicknames, misspellings, abbreviations, subsidiaries - Identify office locations, PO Box locations, counties
— Delegate to a limited number of people
Phase 2:When to search:— State Databases are typically updated annually— Other’s may be more frequent. Take note of local jurisdictions policies, consider other sources— May also include pending claims— Come up with a frequency that works best for you, it may be staggered— Take note of each states reporting deadline— Slow times, off seasons
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Preparing claims packages
Phase 3:— Review and document individual state processes, each are different— Make sure to thoroughly review requirements, especially if you are preparing a large claim. — Example requirements:
- Driver's license- Delegation of authority- Address listings- Organization charts- Notary- Merger documents, PSAs- Yellow print cover pages- W-9
— It’s the little things…— Other things to consider
- Prioritizing claims— Some states don’t list dollar values or ranges upfront
- Is your company the rightful owner? Could there be co-owners?- Is there a reason that the funds haven’t been claimed?- Is your company currently undergoing an unclaimed property audit?
Conducting searches, preparing claims
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Garnering trust, responding to questionsThe claims submissions process
Phase 3:Confirm state submission requirements— Electronic vs. mail— Try to avoid omitting required documents— If PII is a concern, request an alternative upfrontGarnering trust:— Start with the easy ones first — Establish a relationship – delegate a point person for each state— Mind your Ps and Qs, be respectful of state delays— It is OK to make multiple submissions— Remember it is a Treasurer's job and duty to return these fundsResponding to questions:— Focus on education— Think about the why— Don’t forget to check the status online and follow upPhase 4:Repeat— Establish process as part of your go forward policies
and procedures
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Other considerations
— What about all of those letters I get?- Provider – Pros and Cons
— Be wary of fraud- Things to look out for
Closing Remarks
Corporate asset recovery
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
© 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. NDP212897-1A
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