OIO-OFT Audit of Internal Controls at the Unclaimed Property Unit (UP) of the Office of Finance and Treasury (OFT)
Office of the Chief Financial Officer
Executive Summary for In Progress Reports
As of January 4, 2013
Report No. 12-02-11 OFT: FINAL REPORT: Final Report on the Audit of Internal Controls at the Unclaimed Property Unit (UP) of the Office of Finance and Treasury (OFT), dated December 20, 2012
In Progress. Resource issues and dual controls will limit the ability to address timely inventory management; however, other steps have been taken to ensure safeguarding of assets.
Chief Risk Officer’s Risk Assessment
The OCFO recognizes risks associated with effective and efficient management of all unclaimed properties as well as regulatory risks associated with compliance to all applicable laws, the size of the Unclaimed Property portfolio causes the overall risk to be categorized as Medium. All OIO recommendations were considered. Management’s plans for remediation were regarded by OIO to either be responsive to or effectively address all recommendations.
Overview of Recommendations
OIO offered eight recommendations, and six have been fully implemented. Following are the recommendations that have been implemented to strengthen existing controls:
- Formal policies and procedures were documented for the security trading process. Though some flexibility will be required as to the timing to review market conditions. It includes, as it always has, a robust approval process that includes approvals from the Treasurer, Associate Treasurer and Legal helping to ensure that all transactions meet legal and regulatory requirements.
- A procedure was developed to have claims analyst sign only in the space called "For Official Use Only," though they had been signing in other areas of this newly-implemented form.
- OFT worked with the OCFO’s Office of the Chief Information Officer to route technology issues through its Help Desk. This will allow access to be on an as-needed basis.
- UP has better documented the waiver process in “Task 2 Processing Holder Reports.” It includes the common practice of waiving interest and penalties due to the difficulty of management and enforcement. 92% of states agree to waive interest and penalties if the holders voluntarily report past due unclaimed property. UP always requires written justification for waivers.
- OFT worked with the Budget and Accounting divisions to develop a new approach for revenue estimation. Policies and procedures were updated to reflect the new changes.
- OFT worked with Budget and Accounting divisions to establish an updated methodology for liability estimation.
Two recommendations are still In Progress.
- The recordation of inventory is very time-consuming, requiring two vault authorized employees for an extended period of time. However, the items are always safeguarded in a dual-secured vault location. UP is reviewing its process to reduce inventory recordation times going forward. In addition, staff is working to improve the recording process, including enhanced descriptions. UP has ordered and will implement using sealable clear plastic bags.
- OFT is pursuing a separate post office box for Unclaimed Property. An application has been filled out and OFT is waiting for the official opening.
To view the full report, click OIO-OFT Audit of Internal Controls at the Unclaimed Property Unit.