Patronage or Stock/Equity Payback Checks are Never Cashed - How to Handle

Note that every state has their own laws regarding reclaiming uncashed patronage checks.
There are states where you must pass the money back to an unclaimed property fund.
There are states that allow the co-op to re-absorb the funds as income. 
It is up to your organization to be knowledgeable about their state laws on unclaimed property for coop income.

 This process is for a 5-year window of uncashed checks before re-absorbing as income.

The process for uncashed patronage or stock/equity reports is as follows:

1. After 5 years of being an active check, they will post to a public forum.

2. If there is no response, the disbursement check will be voided and bank should be notified for a stop payment of check.

3. a credit voucher will be keyed and applied to the unpaid voucher
   the GL coding on the credit voucher will be misc. income.
   The co-op is reclaiming the cash portion of the refund back to the Co-op.
   Only the Cash Portion of the refund is reclaimed – the Equity portion remains until the co-op decides to pay back that year of equity.

4. When the coop decides to payback the equity, a voucher and disbursement be issued to all patron members that have equity for that fiscal year.

5. If that patron does NOT cash that check, the equity checks will be in the bank as active checks for 5 years and the process will start over again with steps 2 & 3.

Overall: NEVER reverse a patronage transaction unless that patron should have never received the refund in the first place AND you have not reported it to the government on the 1099-PATR.

This process is for passing the uncashed checks to State Unclaimed Funds

The process for uncashed patronage or stock/equity reports is as follows:

1. After 5 years of being an active check, coop will post to a public forum to announce unclaimed funds.

2. If there is no response, you can void the disbursement check and bank should be notified for a stop payment of check.

3. a credit voucher is keyed to apply to the patronage refund voucher.
   the GL coding on the credit voucher is a holding/clearing account
   The co-op is claiming the funds to a holding/clearing account.
   Only the cash portion - the equity portion remains until the co-op decides to pay that equity back.

4. Issue a voucher to the state unclaimed funds name id
   GL coding on the manual voucher is the holding/clearing account used on the patron’s A/P credit voucher.

5. Issue a check to the state unclaimed funds name id.

Overall: NEVER reverse a patronage transaction unless that patron should have never received the refund in the first place AND you have not reported it to the government on the 1099-PATR.