Unclaimed
Property
Gary Joseph, DAS Partner
Cory Roberts, DAS Audit Manager
North Dakota: Voluntary Self-Disclosure Program
The North Dakota Department of Trust Lands – Unclaimed Property Division (“State”) has increased its efforts to encourage holder compliance with the North Dakota Revised Uniform Unclaimed Property Act (“RUUPA”) through its Voluntary Self-Disclosure program, otherwise referred to as Voluntary Disclosure Agreement (“VDA”) or Self-Audit. Holders with operations in North Dakota should be on the lookout for VDA invitations from the State notifying them of selection. The State requests a response to the invitation within 60-days, indicating failure to do so may subject holders to a formal examination by one of the State’s third- party auditors. Statutorily, the North Dakota Unclaimed Property Administrator (“Administrator”) evaluates holder compliance with its unclaimed property law for the past 10 reporting periods. The VDA period is no different, however there are several benefits to cooperating with the VDA that are not afforded holders in an involuntary audit: 1. The State provides a two-year window for completion of the VDA. 2. The holder is allowed to perform a self-review of its own records, rather than a formal examination driven by a third-party firm’s information and
documentation requests. 3. The holder may avoid the imposition of interest and/or penalties of which the Administrator is statutorily authorized to assess for unreported obligations and noncompliance. As you may be aware, the lookback period is heavily dependent on the dormancy periods for property types of exposure. The State provides a three-year dormancy period for most property types. Therefore, a holder may need to review 13 years of records or transaction history in its compliance endeavor. As aforementioned, the State provides a two-year window for completion of the VDA. The steps for completion follow: • Phase 1: Define Audit Scope (2 months) • Phase 2: Quantification of Past Due Unclaimed Property (18 months) • Phase 3: Review and Validation of Results (3 months) • Phase 4: Closing Process and Documentation (1 month)
Holders in the oil and gas industry, particularly
G rowth T hrough E ducat i on - O c tober / N ov ember / D e c ember 2022 11
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