Third-Party Contingent-Fee Audit Defense & Extrapolation Mitigation
Most state unclaimed property examinations are outsourced to contingent-fee third-party audit firms—such as Kelmar Associates, Verus Financial, Discovery Audit Services, and Specialty Audit Services—whose compensation scales directly with assessed liability.
Containing Scope Before Releasing Raw ERP Data
The single costliest mistake under an examination notice is delivering ten years of unvetted general ledger check registers directly to a third-party auditor. Once raw tables are handed over, every uncleared check—including void-and-reissue entries, payroll adjustments, and B2B credit memos—becomes an initial audit assessment item that the holder must disprove line by line.
Hamilton Ross establishes strict document-request protocols, confirms NDA boundaries with participating states, separates closed/sold entities or asset-only acquisitions, and pre-tests sample populations before external production.
Challenging Gross Statistical Extrapolation on Missing Years
When historical bank reconciliations or check registers from 8–15 years ago no longer exist due to ERP migrations (e.g., QuickBooks to NetSuite, SAP, or Workday), third-party auditors extrapolate error ratios from recent 'researchable' base years backward across missing years using gross revenue scaling.
Without aggressive base-period remediation—proving which aged checks were voided, replaced, satisfied via ACH, or covered by B2B exemptions—every single un-rebutted dollar in the base period multiplies across missing historical years. Defending the base-period denominator and numerator routinely cuts final multi-state assessments by 40% to 75%.
Statutory Questions & Answers
Can we enter the Delaware SOS VDA if we already received a Kelmar audit notice?
No. Once a state examination notice is issued by the Department of Finance, Delaware SOS VDA entry is barred for that notice scope—though adjacent states not yet auditing may still permit proactive VDA filings.