Unclaimed Money:

Proposals for Transferring Unclaimed Funds to States

AFMD-89-44: Published: May 9, 1989. Publicly Released: May 9, 1989.

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In response to a congressional request, GAO provided information on proposed legislation that would require the federal government to transfer certain unclaimed money to the states, focusing on: (1) existing laws that address unclaimed funds; and (2) the effect that the proposed legislation would have on those statutes and the federal budget.

GAO found that: (1) U.S. Treasury regulations required agencies to annually transfer unclaimed amounts from their trust and deposit fund accounts into a Treasury-maintained account; (2) several agencies had not transferred amounts owed because either the amounts did not match Treasury's criteria or current laws required them to transfer unclaimed sums to the general fund or retain them within the program; (3) although selected agencies had about $1.5 billion in payable claims, they did not have adequate accounting systems to identify owners of the unclaimed funds; (4) initiatives to locate owners were time-consuming and costly without social security numbers to afford access to other agencies' more current addresses in their automated systems; and (5) although some agencies had established procedures for finding and returning amounts owed, some agencies expended little effort since the property remained available without time limits. GAO also found that: (1) many laws specifically reverted unclaimed money to the federal government, rather than allowing it to escheat to states; (2) although the proposed legislation would override at least 20 statutes, it could inhibit congressional flexibility to recognize and protect federal property within individual agencies; (3) although each agency handled distribution of its own claims, it would be less burdensome to have states deal directly with agencies; (4) the considerable administrative costs added to the millions that would be transferred to the states would add to existing federal budget pressures; and (5) because the legislation would require system features to identify which state received each unpaid claim in order to recover claims paid after amounts were transferred to the states, agencies would need better information systems.

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