Section 8 - Check Requests and Payables
Section 8.6 - Uncashed Checks
Date: 2/20/06 — Approved: Finance Board
The AS is required to comply with the requirements of the Unclaimed Property Law and Regulations (California Code of Civil Procedure, Title 10, Chapter 7 — Unclaimed Property Law, January, 2005), as well as the governing escheatment laws of other states which relate to various forms of abandoned property including uncashed checks. This policy outlines the procedures in regard to checks issued by the AS which remain uncashed after a specified period of time.
Checks drawn on AS bank accounts that remain on the outstanding check reconciliation list after six months will be considered stale dated, and will not be honored by the AS's bank if presented for payment. The procedure for the appropriate handling of such checks is outlined below.
PROCEDURES FOR UNCASHED CHECKS
After the six month time period, stale dated checks are voided and removed from the outstanding list. Accounting entries are generated to deposit the funds into an AS payable account. Simultaneously, the payee/check information is recorded in the unclaimed property spreadsheet maintained by the A.S. accounting office.
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Review process
Prior to stale-dating and voiding checks, the accounting department generates an outstanding check report detailing the payee information. This report is distributed to the appropriate department for review. The reviewer verifies that the payee does not owe money to the AS, provides descriptive information as needed, etc.
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Verification process
After the review is complete, the accounting department researches payee for verification of checks $50 or more. The payee information is then updated and check is prepared to be reissued.
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Contact information
If the payee has questions about the check, they should direct inquiries to the contact person specified in correspondence for additional information. The contact person is responsible for answering any questions and reissuing all checks.
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Replacement checks
A check is left as outstanding for six months and then if there is no available reissue information it is considered an abandoned check. The associated payee information is provided to accounting department and entered into the unclaimed property spreadsheet so that the check is escheated to the state. If a response is not received from the payee, the funds are held by the AS until turned over to the appropriate state in accordance with the escheatment laws.
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