Delaware Voluntary Disclosure Agreement (VDA) program

Delaware's VDA program offers an opportunity to proactively address potential liabilities and stay ahead of compliance risks by working directly with the state of Delaware.

What is the Delaware Voluntary Disclosure Agreement (VDA) program?

The Delaware Secretary of State Voluntary Disclosure Agreement (SOS VDA) program is offered by the Delaware Secretary of State and allows companies to voluntarily come into compliance with the state's unclaimed property laws, while avoiding the risks and burdens of a formal audit. It is faster and less expensive than an audit and at the end of the process the state will release and discharge the holder from any and all liability related to the property.

The benefits of participation:

Waiver of interest and penalties on past due amounts
Greater control over the examination process
Ability to conduct your own review rather than having it performed by third-party auditors
Protection of confidential information through more controlled disclosure
Opportunity to develop remediation strategies before final submission
Holder-friendly approach to voided checks that reduces the potential for reportable property

Who can participate?

Any company can voluntarily enroll in the program as long as your organization is not already under a Delaware audit. However, if you received an invitation from the Delaware Secretary of State's Office (DE SOS), you should highly consider enrolling in the program. Failure to do so will result in your company being referred to the Delaware Department of Finance for audit.

The Delaware VDA steps

Enrollment: The company submits a signed Form VDA-1 that the State signs and returns to the holder within 90 days of the Delaware VDA Invitation letter.
Scoping: The company identifies all subsidiaries, acquired companies, divested companies and other organizations that sit under the parent through the lookback period to identify entities that could produce properties that could meet the definition of unclaimed property due to Delaware.
Quantification of abandoned or unclaimed property reportable to Delaware: The company performs a detailed review of all property types to validate compliance and determine if there are properties that could meet the definition of unclaimed property due to Delaware.
Submission and validation: The company prepares documentation demonstrating the testing procedures performed in compliance with the Delaware VDA guidelines and submits it to the Delaware administrators for review and further testing.
Closing process and documentation: The company submits the Form VDA-2 Voluntary Self-Disclosure Agreement (Form VDA-2) to finalize the VDA process with the State. The Secretary of State countersigns the Form VDA-2 and issues a Demand Letter to the company. The company makes payment of the amount due.

The risks of non-participation

Mandatory audit by a third-party auditor
Assessment of a 20% minimum interest and penalties on past due amounts
Less control over information requests and methodology
Significantly higher costs in terms of both financial liability and administrative burden

How Sovos can help

The Delaware VDA process is known for being complex and is best undertaken with experienced guidance. Sovos Unclaimed Property Consulting provides comprehensive Delaware VDA advocacy services that help organizations navigate this intricate process effectively. Our team leverages industry-specific expertise earned through 200+ hours of unclaimed property experience to help organizations achieve the best possible results through the VDA process.

Our approach includes:

Guidance through the VDA acceptance process
Development of efficient work plans to identify potential exposures
Implementation of remediation strategies to reduce overall liability
Preparation of required documentation and state deliverables
Negotiation support to secure the most favorable possible outcome
Establishment of go-forward compliance processes to prevent future issues

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