Uncashed checks, also called outstanding checks, are checks issued by the university that have not been cashed by the intended payee. If a check remains uncashed for 180 days or longer, it becomes stale and is referred to as a stale-dated check, and banks may decline the check if the payee tries to cash it. If the check remains uncashed for one year (for payroll checks) or three years (for most other checks), it becomes “unclaimed property,” and Stanford must turn over the funds to the state of the payee's last known address for safekeeping. This process is known as "escheatment."
Taking action to follow up on an uncashed check (to a supplier or a visiting speaker, for example) in a timely manner supports proper stewardship of Stanford’s funds, and decreases the time and effort needed to track and resolve stale checks.
Departments that have identified uncashed Accounts Payable (AP) checks, or received a notification about an uncashed AP check, can take one of the following options by submitting a Support Request. To help decide what action to take to resolve the issue, they may want to reach out to the payee to find out why the check was not cashed.
- If Stanford does not owe the payment to the payee, select Void and Do Not Reissue, and provide a reason for the void, to cancel the check and the invoice. Please note that canceling a check cannot be reversed.
- If the payee is owed this payment, and their mailing address has not changed, select Void and Reissue with No Change to cancel and reissue the check to the same mailing address.
- If the payee is owed this payment, and their mailing address or other relevant information has changed, select Void and Reissue with Change to cancel and reissue the check with changes.
If a check remains uncashed for a period of time, and if it is determined that the original payment represents a valid payment and, after due diligence efforts, the payee cannot be located or otherwise does not respond to efforts, it is classified as “unclaimed property.” These checks can include checks issued to vendors, payments to human research subjects, and reimbursement checks, among others.
The State of California, all other states in the United States, and the U.S. territories of Puerto Rico, Guam and the Virgin Islands, require that unclaimed property be turned over to the state (escheated) if the property remains unclaimed for a certain amount of time, typically three years. This requirement varies by state and payment purpose; for example, uncashed payroll checks must be turned over to the state after one year. This requirement applies to all checks issued by the university.
Each year, the university is required to identify checks issued that remain unclaimed. There are strict schedules to provide the information, along with the corresponding amount of funds, to the state for safekeeping until the payee claims them. Severe fines and penalties are imposed for any asset that is not remitted to the state per their schedule.
University Responsibility
Annually, Stanford collaborates with schools, departments and affiliates to assess whether any checks or stored value card balances issued remain unclaimed, i.e. they have not been deposited or cash balances remain on the card. This information, along with the funds outstanding, is submitted to the state per state law.
Department Responsibility
If you are aware of your department issuing checks that may have items or balances still outstanding that have not been escheated to the state, please contact Cash Management & Operations, Office of the Treasurer.
