Our third party administrator is responsible for process payments and account reconciliation. Under these arrangements, who is required to do the required escheatment reporting if the third party uses their FEIN but our money?


We spoke with Karen Anderson of Unclaimed Property Recovery and Reporting who confirmed the following:

States will still consider the school system the issuer, even though you work through a third party provider. Check your contract with your third party medical provider--the contract may assign compliance duties to them. However, if so, be sure there is accountability in place to ensure that the third party follows through (e.g. have them copy you on due diligence correspondence and unclaimed property reports, etc.). Should they fail to report, the state will look at the school system as the issuer and therefore still hold it as the responsible party.

The other question is whether in your state, public school systems must report unclaimed property to the state's unclaimed property division. In some states the money, which originated from the state, may instead go into a state warranty fund. Despite talking to two individuals in the unclaimed property division of the Department of Financial Services, we did not get a clear answer, though we believe that in Florida, the school system's unclaimed property is escheatable. The Florida Senate web site includes the following:

717.1035 Property originated or issued by this state, any political subdivision of this state, or any entity incorporated, organized, created, or otherwise located in the state.--

(1) All intangible property, including, but not limited to, any interest, dividend, or other earnings thereon, less any lawful charges, held by a business association, federal, state, or local government or governmental subdivision, agency, or entity, or any other person or entity, regardless of where the holder may be found, if the owner has not claimed or corresponded in writing concerning the property within 3 years after the date prescribed for payment or delivery, is presumed to be unclaimed property and subject to the custody of this state as such if:

(a) The last known address of the owner is unknown; and

(b) The person or entity originating or issuing the intangible property is this state or any political subdivision of this state, or the person or entity is incorporated, organized, created, or otherwise located in this state.

So it appears that the checks are reportable and that ultimately you are responsible, though you may contractually appoint the third party to report on your behalf. You are nevertheless, the responsible issuer.

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