The enrollment period for the Delaware Secretary of State’s Voluntary Disclosure Agreement Program (the Delaware VDA Program) for unclaimed property reporting closes next week on September 30, 2014. Delaware has previously extended the deadline for entering the Delaware VDA Program, but the Secretary of State has indicated that another extension is highly unlikely. Delaware companies that have not enrolled in the Delaware VDA Program should be aware that the Delaware State Escheator likely will issue a fresh round of unclaimed property audit notices when the Delaware VDA Program closes.

A Voluntary Disclosure Agreement (VDA) is a confidential agreement between a holder (i.e., the company) and a state under which the state allows a company to conduct a self-evaluative review of its unclaimed property practices and procedures. Once a VDA is completed, the results of the review and any unclaimed property identified in the review are remitted to the state. Entering into a VDA with a state generally forecloses the state’s ability to subsequently initiate an unclaimed property audit against the company for the period and property types covered by the VDA.

Companies that enter into the Delaware VDA Program will benefit from a shortened look-back period to 1993—Delaware audits generally look back to 1986 (or 1981, in some cases)—for reporting unclaimed property without penalties and interest. This review occurs in three phases: (1) a scoping phase; (2) a record review and remediation phase; and (3) a due diligence and reporting phase. Companies must complete the review under the Delaware VDA Program by June 30, 2016.