Summary

This operational audit of the Department of Financial Services (Department) focused on the operations of the Bureau of Unclaimed Property (Bureau) during the period March 2006 through February 2008 and selected actions taken through June 30, 2008.  Our audit disclosed the following:

Distribution of Unclaimed Property Management Information System Compact Discs

Finding No. 1:       Information relating to unclaimed property items and their owners of record was maintained in the Department’s Unclaimed Property Management Information System (UPMIS).  Using data in UPMIS, the Bureau produced and distributed to some claimant representatives (locators) compact discs (CDs) containing owners’ personal data.  The information was to be used by the locators to assist them in their efforts in locating unclaimed property owners.  Bureau controls over the distribution of these CDs did not reduce to an acceptable level the risk that the CDs could be lost and personal data within the CDs used for unauthorized purposes.

Monitoring Locator Compliance

Finding No. 2:       Florida Law provides that locators must wait 45 days before making a claim on an unclaimed property account with a value in excess of $250.  Bureau oversight of locator compliance with this waiting period was not always effective.

Waiving Penalties for Late Reports

Finding No. 3:       The Bureau’s General Policy for Penalty Assessment, Waivers and Payment did not provide for an independently performed reconciliation between waived penalties reported in UPMIS and corresponding waived penalty authorization forms.  The lack of a reconciliation process precluded the Bureau from detecting unauthorized penalty waivers.  Also, the Bureau’s policy to automatically waive penalties for first time filers was not authorized by Department rule.

Delivery of Securities

Finding No. 4:       Bureau instructions provided to holders of abandoned securities did not ensure that all holders delivered such securities to the designated Department investment service provider.

Investment Worksheets

Finding No. 5:       Worksheets were used to assist in the Bureau’s efforts to track and value abandoned securities.  Periodic reconciliations of relevant UPMIS data to the worksheets were not performed.

Physical Security Controls

Finding No. 6:       Bureau physical security controls over unclaimed property needed improvement.

The Chief Financial Officer’s response is included as Exhibit A.