Written by: Sarah Stojkovic – Manager, Unclaimed Property
Receiving a Voluntary Disclosure Agreement (VDA) from Delaware regarding unclaimed property can be intimidating for any company. VDAs are not exclusive to non-compliant companies; even compliant entities may undergo this process. Understanding the significance of a VDA, and the potential consequences of neglecting it, is crucial to your company’s success.
Understanding a VDA vs. Audit
Companies receiving a Delaware unclaimed property VDA should recognize its significance compared to the alternative—being subjected to an audit. Opting for a VDA allows companies to maintain control over information, analytics, and presentation of liability to the state. In contrast, an audit may involve external auditors, their own interpretation of data, and assumed liability. It could even expand beyond Delaware’s borders, invoking outside state requirements and penalties.
These four steps are essential to the VDA process:
1. Legal Oversight for Scoping
The first step in the VDA process involves legal oversight. This step is critical for correctly scoping the VDA and determining which entities within the company will be part of the process. Variances in business models, accounting practices, and records retention play a significant role in the scoping process. Legal guidance ensures an accurate and compliant assessment.
2. Accounting and Estimations
The second step, analysis of books and records, involves looking into predetermined look-back periods and calculating past due liability, including any estimations for those periods that may be required. Accurate accounting is crucial for presenting a comprehensive and well-documented analysis. This step lays the foundation for the subsequent write-up and submission.
3. Formal written Summary, Submission, and Advocacy
The formal written summary consolidates the legal and accounting analysis into a comprehensive document submitted to the state. Having an approved advocate is critical at this stage, ensuring all necessary information is presented in a format that minimizes potential scrutiny. The advocate then steps in to support the analysis and secure the agreement during the state’s review.
4. Continuing COMPLIANCE and Analysis
The VDA process doesn’t end with submission. Companies should be prepared for ongoing reviews of their books and records, ultimately reporting annually in all states where required. This extended commitment ensures continued compliance and proactive management of unclaimed property obligations.
Choosing the Right Advocate and vda partner
Opting for a Delaware unclaimed property VDA is a wise choice for companies seeking control while maximizing the potential for a successful outcome of their mandatory review. However, going through these steps without professional assistance can create turbulence throughout the process. Choosing the right Delaware-approved advocate ensures that your organization receives proper guidance, support, and expertise to navigate the complexities of the VDA.
DMA’s team of unclaimed property experts will actively guide you through every step, ensuring accurate scoping, thorough analysis, and ongoing compliance. With DMA as your advocate, you can confidently navigate the entire VDA process, minimize stress, and achieve a favorable resolution.