WASHINGTON – A financial lost-and-found run by the state comptroller has reached $240 million — some of which belongs to cash-strapped state agencies, public schools, the University of Maryland and the federal government.
Most of the money in the account is owed to private citizens, whose abandoned bank accounts and safe deposit boxes, unclaimed security deposits, wages and insurance payouts are handed over to the comptroller under state law.
But tens of thousands of dollars, in some cases dating back to the 1970s, belong to public entities, according to a review by Capital News Service.
Some agencies said they routinely check with the comptroller’s office for unclaimed accounts, some didn’t. All were surprised to find they had money due and all said they would try to get their hands on it.
“I don’t know if we check it periodically or not. Maybe we should,” said Kate Harrison, a spokeswoman for Montgomery County Public Schools, which had nearly $6,000 in the unclaimed property fund.
Others in the fund included various offices in the University of Maryland, which were owed about $20,000; the Maryland State Police, which was owed about $1,500; and the Maryland State Highway Administration, which has nearly $30,000 in the account, including a single $14,000 payment from the Charles County Circuit Court.
Charles County Circuit Clerk Richard Day suspects the money came from a land acquisition case and could belong to a property owner, rather than the highway administration. “There may be a confusion or error,” he said.
That sort of confusion is troublesome to tax groups — but not surprising.
Richard Falknor of the Maryland Taxpayers Association said that although the amount of missing public money is relatively small, it is symbolic of poor record-keeping at the state.
“The moral of the story is, for a government that is constantly complaining about insufficient money, they should at least look at their own accounting,” Falknor said. “It’s the kind of thing that breeds cynicism and erodes public confidence.”
But University System of Maryland Comptroller Bob Page is not just complaining: He has passed word through the system that offices need to check the database.
“Each institution will have to pull back the onion to figure out what is in there,” he said.
That could be a lot of peeling. The system has 38 unclaimed property listings dating back to 1978, according to the state. Page questioned why the state comptroller’s office did not inform the school about its missing money.
“Frankly we had assumed that communication within the state would have been better than that,” Page said.
But the state comptroller’s office does everything it can to inform rightful owners of the money they are owed, short of calling each of the nearly 420,000 of them in the database, said spokesman Mike Golden.
The office sends letters to owners when the money arrives at the comptroller’s office and it advertises all new accounts twice a year in state newspapers. There is also a searchable database on the comptroller’s Web site.
“People see letters from the government and quite frankly, they don’t want to be bothered,” Golden said.
Under state law, banks and other businesses are required to give the state any unclaimed property — including bank accounts, the contents of safe-deposit boxes and uncashed checks — after three years. The comptroller holds the property for a year while it tries to contact the rightful owner.
After a year, the money goes into the general fund — other property is sold at auction — but an owner who comes forward to claim his property after that will be reimbursed. The law requires the state to pay up, no matter how many years later the claim is made.
Golden said the law is actually an improvement on the situation that existed for property owners before 1966.
“In days gone by, the banks kept that money. It was a windfall for banks and businesses, and customers got shortchanged, quite literally,” he said.
Now it is a windfall for the state. Maryland collects more than it pays out each year, and the fund has increased by nearly $100 million since 2002.
A recent check of the fund showed that Montgomery County’s $6,000 was tops among public school systems in the list. But Prince George’s County schools had more than $1,000 and Baltimore County schools were owed around $200.
The State Highway Administration periodically checks the comptroller’s office for unclaimed property, said Kellie Boulware, but she did not know specifically how often.
“I wouldn’t say yearly. But periodically,” said Boulware, adding that the agency will check its own financial records before calling to collect the $20,000 the comptroller’s office said it is holding.
Maryland State Police spokesman Sgt. Thornnie Rouse said the department will try to figure out how more than $1,500 of its money wound up at the comptroller’s office. Rouse said the money ranges from refunds for car parts to deposits paid for drinking water containers.
“We will follow up with the folks responsible to ensure that the M.S.P. is not on anyone’s property-owed list,” Rouse said.
The comptroller’s office is also holding over $15,000 in U.S. Department of Treasury funds dating back to 1993.
Spokeswoman Brookly McLaughlin said the U.S. Treasury Department routinely checks such accounts as part of “an ongoing effort to work with states to recover funds.” It has reclaimed $600,000 for itself and other federal agencies from Maryland during the past two-and-a-half years, she said.
She did not know how the Treasury missed the funds currently at the comptroller’s office, but said it will continue to look for lost funds.
“It would not be cost-efficient to check in every day,” McLaughlin said.
-30- CNS 04-23-04