"Mistake of fact"

This is truly a hypothetical question, but comes to mind since there have been a couple of "mistake of fact" distributions recently.

Suppose you have a legitimate mistake of fact contribution. In order to return it to the employer, it is supposed to be returned within 1 year.

Now suppose it is past the 1 year, before it is even discovered. I believe it then needs to be allocated as an employer contribution. Other opinions? Other solutions you have used or heard of in "real life" situations? Just curious.