Hospitals often overlook uncashed checks and do not report them as unclaimed property.
When a hospital issues a high volume of checks, uncashed checks are sometimes missed. Unclaimed property can become "buried" in your outstanding check report because:
- Your system reuses check numbers before a stale-dated check is reviewed and transferred to a liability account for reporting.
- Older checks may move from the top of the report to the middle, if your outstanding check report sorts by month and day but not by year.
To avoid this problem:
- Ensure that you review and research your outstanding checks regularly.
- Document your adjustments to remove aged outstanding checks.
- A check is likely to become unclaimed property if it remains outstanding for six months or more. Consider setting up a liability account to control and track such checks.
For proper aging, keep a listing of the check by payee, amount, and issue date, rather than the date removed from the bank account.
Hospitals do not report payroll timely (after one year) for unclaimed property purposes.
For payroll checks, the abandonment period is one year, rather than three years. Ensure payroll checks are tracked using this shorter timeframe.
If you use a payroll service, verify that the outside paying agency properly reports uncashed checks on your behalf.
Small amounts of patient credits are not reported as unclaimed property.
There is no minimum amount of unclaimed property that may be retained.
Small credit balances should be segregated and reported as unclaimed property after three years. Items under $50 may be reported to the Department in an aggregate to simplify reporting.
Unmatched cash receipts are not reconciled.
Because money may be received from several sources to pay a patient bill, occasionally payments cannot be matched to an amount owed. Such payments are often suspended in some manner.
Review these suspended cash receipts regularly. Those that cannot be matched and are not returned to the issuer should be reported as unclaimed property.
Hospitals do not review to determine that unclaimed bonds or interest payments are properly reported.
Unclaimed matured bonds or any unclaimed interest or coupons related to bonds issued by hospitals must be reported after three years. This type of property is often handled by a paying agent, but the hospital is responsible to ensure it is reported as unclaimed property.
In some cases, the paying agent may have returned the unclaimed bond monies to the hospital. Hospitals should:
Research your historic debt service to determine a list of bond issues.
Contact your paying agent(s)* to determine if they report unclaimed bond monies for the hospital. Keep a copy of their response in your unclaimed property working file.
If they have not reported, obtain a list of any unclaimed bond monies and arrange the filing of an unclaimed property report.
Report any unclaimed bond monies you have received.
* The Bank of New York reports unclaimed local government bond monies if a Public Hospital District (PHD) requests it. Bond monies, if held by the PHD, are reportable two years after they become payable.
Public hospital districts fail to report unclaimed property properly.
Most property held by public hospital districts ("PHDs") is presumed abandoned after two years. The exception is uncashed payroll checks, which are presumed abandoned after one year.
PHDs must report all unclaimed property, but have the option of retaining some types of unclaimed property. Generally, PHDs may retain unclaimed property that is issued in check or warrant form.
See below for a list of property types and their specific reporting requirements.
PHDs must report and remit the following property types:
- Coupons and interest payments on bonds
- Unidentified and unclaimed matured bonds
- Unidentified and unmatched cash receipts
- Small patient credits (not in check form)
- Patient credits (not in check form)
PHDs must report and retain the following property types:
- Uncashed checks
After five years, PHDs may:
- Transfer remaining unclaimed funds to their general fund. However, retained funds must always be available to refund.
- Refer claimants of retained property to the local government to pursue their claim.
- Archive records for retained property.