Unclaimed Property Procedure

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Steward
Vice President of Finance and Facilities
Category
Finance
Effective date
December 22, 2022
Last content update
April 20, 2023

Purpose

To ensure unclaimed property review is completed on a timely basis as required by Minnesota Statute Chapter 345.

Definitions

MMB - Minnesota Management and Budget department.

ISRS - Integrated Student Record System used by Minnesota State Community and Technical College to record all student and financial transactions.

Business Office staff - Staff assigned to monitor and process unclaimed property.

CAR - Central Accounts Receivable office.

CAP - Central Accounts Payable office.

COD - Common Origination and Disbursement interface used by the U.S. Department of Education to record Federal Student Aid records.

CFA - Central Financial Aid processing center.

G5 - Federal awards website used to draw/refund federal funds for the College.

Unclaimed Property - Uncashed vendor checks that have been outstanding three years or more. Student payroll checks outstanding after one year or more.

FISAP - Fiscal Operations Report and Application to Participate for federal financial aid programs for the College.

Procedure

MMB Outstanding State Warrant Procedure
  1. MMB reviews outstanding warrants in the State Treasury Account and initiates an unclaimed property review on a quarterly basis. MMB sends an email to Minnesota State System Office staff, which is then forwarded to all colleges and universities. The email contains:
    1. Outstanding warrant instructions
    2. Spreadsheet with payment details by voucher (Agency Report.xlsx)
    3. Memo to Request a Stop Payment Form to CANCEL (DO NOT REISSUE)
    4. Pre-printed affidavits and cover letters (letters match up by page number and payee name)
  2. CAP staff complete the following steps by the MMB deadline:
    1. Review each stale-dated warrant on the Agency Report spreadsheet, marking a “Y” for each valid warrant or an “N” for each non-valid warrant.
    2. Complete the Memo to Request a Stop Payment Form for each warrant that is NOT a valid payment. Email completed forms to syscomp.mmb@state.mn.us.
      1. Invalid payments may consist of wrong vendor ID, wrong location, wrong amount, duplicate payment, or the vendor did not provide product or service promised.
      2. Upon receipt of the documentation, MMB processes the request cancelling the warrant.
      3. Once the warrant has been canceled, CAP staff will go into accounting and reverse the transaction and into Marketplace to cancel the invoice.
    3. Print the attached cover letters and affidavits for all valid payments and mail to the vendors by noted deadline.
    4. Return the completed Agency Report spreadsheet to MMB staff and copy the Minnesota State system office staff.
  3. Vendor is instructed in the letter and on the form to return the affidavit to MMB by a posted deadline for reissuing. If the vendor does not respond by the deadline, MMB will assist with the escheatment process for the Minnesota State system.
Vendor Outstanding Local Checks Procedure
  1. Business Office staff reviews the outstanding vendor checks (AC) in the local checking account monthly and initiates an unclaimed property review for any checks that remain outstanding 90 days after the check date.
    1. Spreadsheet is compiled of all checks that remain outstanding 90 days past the check date.
    2. Payee is contacted by e-mail, mail, or phone and the outreach efforts are documented on the spreadsheet.
    3. If payee states they have lost the check, an affidavit is sent to the payee at their current address. If their current address is different from the one on file in ISRS, the payee completes a W9 form and forwards to CAP to update vendor file.
    4. The completed affidavit is kept on file for audit purposes.
    5. Notify CAR to verify that check is outstanding. If outstanding, CAR will remove check from Bremer positive pay.
    6. Notify CAP to reissue a replacement check. CAP cancels the outstanding check and issues a replacement check following the ISRS documented procedure.
    7. All checks about which the payee was unable to be contacted are handled according to the Minnesota State Unclaimed Property procedure by Business Office staff.
    8. Accounts payable checks are held by the College for three years.
  2. By October 15 each year, outstanding checks that exceed the required holding period of three years are canceled using the following steps:
    1. Using the manual bank reconciliation screen AP0004UG, mark each check as a “U.” 
    2. Receipt the dollar amount of the checks in an LSO clearing account to revenue object code 9851. 
    3. Process a direct pay for the amount in the clearing account using object code 9851 and vendor number B130000000-001 and forward to the CAP office
    4. CAP processes a check and forwards it to Business Office staff.
    5. Business Office staff work with a cashier who creates a cash session in AR2207UG using cost center/object cod 172842 - 9851, applying the "N" flag. Cashier provides Business Office staff with a transaction number.
    6. Business Office staff will:
      1. Complete the Minnesota Department of Commerce’s “Report of Unclaimed Property Verification” (UP-H) form.
      2. Create the electronic NAUPA format file for the above checks, download file and upload file to Department of Commerce website.
      3. Send UP-H form and check to the Department of Commerce prior to the October 31 deadline.
Student Payroll Outstanding Local Checks Procedure
  1. If the payroll check includes Federal Work Study Funds, follow the instructions in the Student Federal Work Study Payroll Outstanding Checks Procedure section.
  2. Business Office staff review outstanding student payroll checks (PR) in the local checking account monthly and initiate an unclaimed property review for any checks that remain outstanding 90 days after the check date.
    1. Each month, compile a spreadsheet of all student payroll checks that are outstanding 90 days from the check date.
    2. Using the “ISRS Address to E-Mail Report,” email all students with outstanding checks that are 90 days past the check date.
    3. If unable to contact the student by email, attempt to contact them by mail after 120 days of the check date and follow up with a phone call.
  3. If payee claims they have lost the check, an affidavit is sent to the payee at their current address. If their current address is different from the one on file in ISRS, then update ISRS with the new payee address.
    1. Notify CAR to verify the check is outstanding and remove check from Bremer positive pay.
    2. Affidavit is processed by Business Office staff to cancel the old check and issue a replacement payroll check following the ISRS documented procedure.
    3. Completed affidavit is kept on file for audit purposes.
  4. All checks about which the payee was unable to be contacted are handled according to Minnesota State’s Unclaimed Property procedures by Business Office staff. 
    1. Student payroll checks are held for one year by the College.
    2. By October 15 of each year, outstanding checks that exceed the required holding period of one year are canceled using the following steps:
      1. Using the manual bank reconciliation screen AP0004UG, mark the check as a “U.” 
      2. Receipt the dollar amount of the checks in an LSO clearing account to revenue object code 9851.
      3. Process a direct pay for the amount in the clearing account using object code 9851 and vendor number B130000000-001.
      4. CAP processes check and forwards check to Business Office staff.
      5. Business Office staff work with a cashier who creates a cash session in AR2207UG using cost center/object code 172842 – 9851, applying the "N" flag.  Cashier provides Business Office staff with a transaction number.
    3. Business Office staff will:
      1. Complete Minnesota Department of Commerce’s “Report of Unclaimed Property Verification” (UP-H) form.
      2. Create the electronic NAUPA format file for the above checks, download file and upload file to Department of Commerce website.
      3. Send UP-H form and check to the Department of Commerce prior to the October 31 deadline.
Student Federal Work Study Payroll Outstanding Checks Procedure
  1. If FWS payroll checks remain uncashed, the Department of Education requires that every effort be made to contact the student prior to canceling the check, since the student earned those dollars.
  2. Prior to 240 days from disbursement, uncashed Student Payroll checks that include Federal Work Study (FWS) funds need to have those federal funds replaced with institutional funds so the federal funds can be returned to the Department of Education. CFA determines the amount of the FWS and follows the steps below to return the federal amount:
    1. Use the Transfer screen in ISRS to transfer the amount from the institutional fund cost center to the FWS cost center. Because FWS is a local account, and the institutional fund cost center is a treasury account, interfund accrual is needed to run the transfer.
    2. Contact CFA to reduce the FWS fund on the student’s account.
    3. Process a return from the FWS cost center to the Department of Education (either G5 or direct payment if check is for older and closed FY).  If the paycheck remains uncashed after a year, follow the Unclaimed Property procedures.
Financial Aid Outstanding Local Check Procedure
  1. Business Office staff reviews outstanding financial aid checks (AR) in the local checking account monthly and initiates an unclaimed property review for any checks that remain outstanding 90 days after the check date. 
    1. Each month, compile a spreadsheet of all financial aid checks that are outstanding 90 days from the check date.
    2. Using the “ISRS Address to E-Mail Report,” email all students with outstanding checks that are 90 days past the check date.
    3. If unable to contact student by email, attempt to contact student by mail after 120 days of check date using both the permanent and local addresses and follow-up phone call.
  2. If student states they have lost the check, an affidavit is sent to the student at their current address. If their current address is different from the one on file in ISRS, then update ISRS with the new student address.
    1. Notify CAR to verify check is outstanding and remove check from Bremer positive pay.
    2. Notify CAR to cancel outstanding check and issue new check to student.
    3. File returned competed affidavit for audit.
  3. CAR cancels outstanding check and issues replacement financial aid overage check following procedure.
  4. If there is a balance due from a semester in the current financial aid year, cancel the outstanding check, which will apply the check amount to the outstanding balance.
    1. If there is not a balance due, after approximately 180 days of check date send a spreadsheet listing the outstanding checks to CFA and CAR so that they can properly adjust the financial aid and return the funds to the appropriate financial aid programs.
    2. Federal funds must be returned to the federal government no more than 240 days after issuance of check.
  5. Within 30 days of receiving the outstanding check spreadsheet, CFA and CAR review the unclaimed financial aid checks and verify what types of financial aid the student has received.
    1. Return the funds to the appropriate program.
    2. Apply money from the outstanding check to the proper programs in the following order:
      1. Self-loans
      2. Parent Plus loans
      3. Stafford Unsubsidized loans
      4. Stafford Subsidized loans
      5. Private scholarships
      6. Minnesota State grants
      7. SEOG grants
      8.   PELL grants
    3. CAR contacts Business Office staff to use the manual bank reconciliation screen AP0004UG to mark the check as a “U” and notify CAR when completed.
    4. After notification from Business Office staff that checks are at “U” status in ISRS, CAR receipts the dollar amount of the checks in an LSO clearing account (CC 172842) to revenue object code 9851 to balance bank account amounts.
    5. CAR removes the check from Bremer positive pay.
    6. Process the funds return to the proper program. 
      1. Loans need to be adjusted in COD on each student account in the correct aid year. The funds are returned in G5 in total for the year by CAR at the net amount (rounded down) to match the COD amount.
      2. Pell grant funds are returned as above in COD and G5.
      3. State grant funds are returned by direct pay process with a manual check and completed State grant refund return form.
      4. Scholarship funds are returned to provider.
    7. CAR completes deposit transaction (negative amount) to record G5 returns in accounting system to LSO clearing account (CC 172842) and revenue object code 9851.
    8. CFA revises FISAP as needed to correct aid year to balance return amounts.
  6. All checks in which the payee was unable to be contacted are handled by Business Office staff according to guidance provided by MMB. 
    1. Financial aid checks are held for three years by the College.
    2. By October 15 of each year, outstanding checks that exceed the required holding period of one year are canceled using the following steps:
      1. Using the manual bank reconciliation screen AP0004UG, mark the check as a “U.” 
      2. Receipt the dollar amount of the checks in an LSO clearing account to revenue object code 9851.
      3. Process a direct pay for the amount in the clearing account using revenue object code 9851 and vendor number B130000000-001.
      4. CAP processes check and forwards check to Business Office staff.
      5. Business Office staff work with a cashier who creates a cash session in AR2207UG using cost center/object code 172842 – 9851, applying the "N" flag. Cashier provides Business Office staff with a transaction number.
      6. Complete Minnesota Department of Commerce’s “Report of Unclaimed Property Verification” (UP-H) form.
      7. Create the electronic NAUPA format file for the above checks, download file and upload file to Department of Commerce website.
      8. Send UP-H form and check to the Department of Commerce prior to October 31 deadline.

Responsibility

Responsibilities of staff members are listed above for outstanding state warrants, vendor payment local checks, student payroll checks, student federal work study payroll checks, and financial aid overage checks.

References

Minnesota Department of Commerce Unclaimed Property Website

Minnesota Statute Chapter 345

 

Next scheduled review
Policy author(s)
Wayne Wolden

Revisions

DateDescription of Change

Added the provision for Federal Work Study Funds return to the Federal Government through G5.