We have discovered that some of our active Delaware voluntary disclosure agreement (VDA) clients have received audit notices from the state of Delaware. Generally, Delaware will not select a company for audit unless they have been first given the opportunity to join the VDA program; however, there is an exception that allows the state to join existing multi-state audits. In the past, Delaware has not initiated audits of securities when companies were actively participating in the VDA program, which typically includes both securities and general ledger properties.
In this case, the state appears to be viewing the audit as an existing multi-state audit of Computershare. This is incorrect on many levels; however, putting that aside, the state of Delaware has agreed to the following: companies that are actively participating in the Delaware VDA program have the option to either sign on to the audit or to include securities in the scope of the VDA.
We do not expect that all companies selected for audit by Delaware are actively enrolled in the VDA program. Many may already be under audit for general ledger property or may have excluded securities from an already completed VDA. It is critical that companies on the audit list understand that if they are actively participating in a Delaware VDA, they have two options: signing on to the audit, or including securities in the scope of the Delaware VDA.
For more information on how Georgeson can assist your organization with navigating the complexities of an unclaimed property audit or a VDA, please contact us.