Delaware Secretary of Finance has announced that David Gregor will be the new State Escheator. This is the position left open by Mark Udinski's July 31, 2013 departure for Kelmar Associates.
Gregor is currently the Deputy Secretary, a position he has held since 2010. He has been with the Department of Finance since 1987. One of his primary responsibilities has been the preparation and coordination of the economic and financial analyses for Delaware Economic and Financial Advisory Council. As such, he would be intimately knowledgeable about the expected revenue that unclaimed property provides, as well as its need to drive the Delaware budget process.
Audits and Voluntary Disclosures
In recent years, the Delaware Department of Finance has been criticized for its aggressive pursuit of holders of unclaimed property. Audits are conducted by third-party auditors, which are paid on a contingent fee basis. Due to the repeated harsh treatment, the Secretary of State successfully lobbied for an alternative voluntary disclosure program. Once a company successfully completed the State VDA program, the Department of Finance would be prohibited from auditing the company for periods and property types covered by the VDA.
However, companies are only eligible for the Secretary of State program if they are not currently under audit by the Department of Finance. In 2013, the Department of Finance began an audit blitz, covering hundreds of companies. Those audits began under the leadership of Mark Udinski, who now works for the audit firm that is conducting the audits. The audits have covered both general ledger property, including accounts payable and receivable, as well as securities.
The best defense for a company includes proactive compliance, proper record retention, and enforced policies and procedures, no matter who is the head of Delaware's unclaimed property division. Barganier and Associates does not believe that a changing of the guard will result in more lenient audits, if for no other reason than the state budget's dependence on the revenue unclaimed property provides.