14-A-005 - Claims for Escheated Checks

Effective July 1, 2013, House Bill 2139 of the 2013 legislative session abolished the cancelled warrants payment fund; thereby transferring the responsibility for payment of previously escheated checks (outlawed warrants) to the Unclaimed Property Division of the Kansas State Treasurer.   As a result of this legislation, Policy Manual Filing No. 11,965, Payment of Previously Outlawed Warrants is being revised.

What checks have been escheated?

• Income tax refund checks issued by the Kansas Department of Revenue with check issue dates through May 31, 2012
• SHARP Payroll checks, including regent checks, with check issue dates through June 30, 2010
• STARS miscellaneous checks with check issue dates through June 30, 2010

What checks have been transferred to unclaimed property?

• Income tax refund checks issued by the Kansas Department of Revenue with check issue dates July 1, 2008 through May 31, 2012
• SHARP Payroll checks, including regent checks, with check issue dates July 1, 2008 through June 30, 2010
• STARS miscellaneous checks with check issue dates July 1, 2008 through June 30, 2010

What happens once checks have been escheated and transferred to unclaimed property?
Once escheated checks are sent to the Unclaimed Property division of the State Treasurer's Office, the monies are held in the payees name until they are claimed by the original payee or a rightful heir.  Payees are able to search for unclaimed property by utilizing the Kansas State Treasurer's website (www.kansasstatetreasurer.com).

When will Payroll checks (including regent checks) with check issue dates after June 30, 2010 be escheated and transferred to unclaimed property?

• The Office of Systems Management is currently working with programming staff with the expectation that the Payroll escheatment process will be run prior to the end of fiscal year 2014. The transfer to unclaimed property will occur at the same time the escheatment process is run.
• The long-range plan will be to run the escheatment process on a monthly basis. In order to get caught up, several runs of the escheatment process will need to occur. Email blasts will be sent out via the SMART and SHARP listserves as escheatment processes are run.

What do agencies need to do before Payroll checks are escheated and sent to Unclaimed Property?
All agencies, including those agencies using federal awards pursuant to OMB Circular A-133 to fund administrative payments (payroll expenditures), are expected to review outstanding checks prior to the escheatment process.

Agencies have three options for handling an outstanding check:

• If it has been determined the payment is not due to the employee, the agency is responsible for canceling the payment.
• If it has been determined the payment was lost and the employee address has been verified, the agency may reissue the payment.
• If it has been determined the payment is due to the employee and such payment remains outstanding, and the agency has not cancelled or reissued the payment, the check will be escheated and transferred to unclaimed property. The employee then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer.

A Job Aid has been written to provide agencies with a SMART query for reviewing outstanding payroll checks.  This Job Aid is located on the SMART Web website - Accounts Payable, Reports page: 
Using the KS_AP_PYR_EXT_CHK_TO_ESCHEAT Query.

Procedures for reissuing (reprinting) payroll checks can be found on the KDOA website - Office of Systems Management, Payroll Procedures page. Please refer to the following two items on this page:  'Paycheck Reprint Procedures(SHARP Agencies only)' and 'Paycheck Reprint Procedures for Regents Agencies'.
 

When will SMART checks be escheated and transferred to unclaimed property?

• The Office of Systems Management is currently working with programming staff with the expectation that the SMART escheatment process will be run prior to the end of fiscal year 2014. The transfer to unclaimed property will occur at the same time the escheatment process is run.
• The long-range plan will be to run the escheatment process on a monthly basis. In order to get caught up, several runs of the escheatment process will need to occur. Email blasts will be sent out via the SMART listserve as escheatment processes are run.

What do agencies need to do before SMART checks are escheated and sent to Unclaimed Property?
All agencies, including those agencies using federal awards pursuant to OMB Circular A-133, are expected to review outstanding checks prior to the escheatment process.

Agencies have three options for handling an outstanding check:

• If it has been determined the payment is not due to the vendor, the agency is responsible for canceling the payment.
• If it has been determined the payment was lost and the vendor address has been verified, the agency may reissue the payment.
• If it has been determined the payment is due to the vendor and such payment remains outstanding, and the agency has not cancelled or reissued the payment, the check will be escheated and transferred to unclaimed property. The vendor then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer.

To cancel a payment with no reissue, a SMART Check Cancellation Request form will be required. The agency will need to complete and submit the DA-7CH - SMART Check Cancellation Request form. This form is located on the KDOA website, Office of Systems Management - Accounting Forms page.

To reissue a payment, a Lost Check Statement form will be required. The agency will need to complete and submit one of the following forms:
DA-6 Form - Lost Check Statement
DA-6A - Lost Check Statement - Address ID Change
DA-6B - Lost Check Statement - Return Check to Agency
DA-6C - Lost Check Statement - Return Check to Agency and Address ID Change
These forms are located on the KDOA website, Office of Systems Management - Accounting Forms page.

Agencies shall open a Service Desk Request in ManageEngine, attach the appropriate form, and submit the Service Desk Request. 

Please note: If a Setoff has been withheld pursuant to K.S.A. 75-6201 et seq. from an outstanding payment, and it has been determined the outstanding payment should be cancelled, the agency will need to make a notation on the Service Desk Request that payment being cancelled has a Setoff withheld.

SMART Job Aids have been written to provide agencies with tools for reviewing outstanding checks. These Job Aids are located on the SMART Web website - Accounts Payable - Reports page:

• Using the KS_AP_KDOR_EXT_CHK_TO_ESCHEAT Query (for use by KDOR)
• Using the KS_AP_OUTSTANDING_CHECKS Query
• Using the KS_ACCT_REGISTER Report

What about checks issued prior to July 1, 2008?

• Office of Systems Management, Central Systems Responsibilities Team will review any claim based upon a cancelled state warrant which is more than five years prior to the effective date of this legislation. If the claim is determined to be valid, the amount will be transferred to unclaimed property and the claimant then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer. No claims will be accepted for checks issued prior to January 1, 1996.
• Form AR-95, Validation of Cancelled Checks for Submission to Unclaimed Property Check Issue Date January 1, 1996 through June 30, 2008, shall be completed and sent to Office of Systems Management as noted on the form.
• Form 'AR-95 - Validation of Cancelled Checks for Submission to Unclaimed Property Check Issue Date January 1, 1996 through June 30, 2008' is located on the KDOA Website, Office of Systems Management - Accounting Forms page.

How does an agency know what has been escheated?
SMART Job Aids have been written to provide agencies with tools for reviewing escheated checks. These Job Aids are located on the SMART Web website - Accounts Payable - Reports page:

• Using the KS_AP_PYR_EXT_ESCHEATED_CHK Query (to identify payroll checks)
• Using the KS_AP_STARS_EXT_ESCHEATED_CHK Query (to identify STARS Misc. checks)
• Using the KS_AP_KDOR_EXT_ESCHEATED_CHK Query (for use by KDOR)
• Using the KS_ACCT_REGISTER_ESCHEATMENT Report - 11-18-13
• An additional query will be provided to assist agencies in identifying SMART checks that have been escheated – an email blast will be sent out via the SMART listserve once this query is available

Email blasts will be sent out via the SMART listserve as additional information regarding escheatment becomes available.