Escheated Checks Overview-State of Michigan

Escheated Checks Overview-State of Michigan

Most businesses have unclaimed property resulting from normal operations. Any asset, tangible or intangible, belonging to a third party that remains unclaimed for a specified period of time is considered unclaimed property. For example, un-cashed payroll checks must be turned over to the State after one year; most other property types, such as vendor checks and accounts receivables credit balances, must be turned over after three years. Government entities must turn over all unclaimed property, regardless of property type, after one year.

Michigan's Uniform Unclaimed Property Act, Public Act 29 of 1995, as amended, requires businesses and government entities to report and remit to the Michigan Department of Treasury abandoned and unclaimed property belonging to owners whose last known address is in Michigan. In addition, every business or government entity that is incorporated in Michigan must report and remit abandoned property belonging to owners where there is no known address.

Escheating a Check Not Using the Check and Deposit Reconciliation Process

The best way to handle making a check escheated, if you do not use the Check and Deposit Reconciliation within BS&A General Ledger, is by using BS&A Accounts Payable.

Marking checks as escheated in the Accounts Payable program: - Go to Tables>Check Table. - Mark any checks that need to be Escheated (either through blocking or marking). - Select Tools>Set Fields. - For population, select Block/Marked Records. - Select Set the Check Status. - Select Escheated from the drop down menu.

Manual journal entry in the General Ledger program: - Go to the Manual Journal Entry screen. - Click Add to add a new manual journal entry. - Add a MJE for the reimbursement of the total of the checks that were marked as escheated in the AP program, debiting Cash and crediting a liability account.

Creating the check for the state in the Accounts Payable program: - Create a manual check in Accounts Payable. - The GL distribution on the check would be the same liability used in the manual journal entry created.

Escheating a Check Using the Check and Deposit Reconciliation Process

For this entire process we will be using BS&A's General Ledger program.

Marking checks as escheated in the General Ledger program:

- Open up GL and go to Tasks>Check and Deposit Reconciliation. - Enter the information needed to set up a new reconciliation or enter in the reconciliation record

I.D. number associated with a previous reconciliation.

If you want to use the export option to upload the file to the State's website:

- BS&A will generate a file for you to upload through state-recommended software called HRS (Holder Reporting System).

- With your bank reconciliation statement loaded, on the Check Reconciliation tab, mark any checks that need to be set to escheated as "Escheated" by selecting the check and using the E key on your keyboard for a short cut.

- Once all of the checks are marked as Stale Dated, click on the option that says "Export Stale Dated to HRS." Fill out all of the necessary information. The program will create a file for you. You will now need to upload the file to the State's website.

- Save and close the Check and Deposit Reconciliation screen.

If you do NOT want to use the export option to upload the file to the State's website:

- With your bank reconciliation statement loaded, on the Check Reconciliation tab, mark any checks that need to be set to escheated as "Escheated" by selecting the check and using the E key on your keyboard for a short cut.

- Save and close the Check and Deposit Reconciliation screen.

Manual Journal entry in the General Ledger program: - Go to the Manual Journal Entry screen. - Click Add to add a new manual journal entry. - Add a MJE for the reimbursement of the total of the checks that were marked as escheated in the AP program, debiting Cash and crediting a liability account.

Creating the check for the state in the Accounts Payable program:

- Create a manual check in Accounts Payable - The GL distribution on the check should be the same liability used in the manual journal entry

created.

Electronic Reporting with the State

Many states use electronic filing software in order to prepare an unclaimed property report in the required format. Many states recommend HRS Pro to meet the filing requirements.

HRS and HRS Pro can be downloaded from the State of Michigan website at:



What is HRS ?

HRS is a proven software package recommended by many states to prepare an unclaimed property report in the required format.

HRS is specifically designed for and accepted by states that utilize Wagers unclaimed property management systems (currently 41 unclaimed property programs).

HRS is available in two versions

..... Differences:

Single-user database access Limited to 1 Holder (or Company) Limited storage of data to local computer Limited export of data, only to Naupa format Expires every 6 months No fee Limited technical support, see "HRS Pro Support"

link left side of screen

Multi-user capability No limitation to Holders (or Companies) added Supports storage of data to centralized storage

location Supports ability to save data to CSV file $295 annual fee for initial 3 user license Direct technical phone support:

617-371-9900

Additional Information

For additional information please visit the State's website.

For Michigan:

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