Purpose of Audit
The purpose of our audit was to determine whether County officials established appropriate controls to safeguard and account for court and trust funds for the period January 1, 2019 through March 24, 2022.
Background
Pursuant to a court order, certain assets may be provided to the court and then delivered to the County Treasurer1 (Treasurer) for safekeeping. Payments made pursuant to court orders commonly involve surplus money from foreclosures and contract disputes resulting in a mechanic’s lien.2 These actions are recorded in the County Clerk’s office when payments are deposited as required by court order. Additionally, in certain circumstances,3 funds from estates are entrusted to the Treasurer for safekeeping by order of the Surrogate’s Court. Together, the Treasurer, County Clerk and Surrogate’s Court must develop sound procedures and processes which, when implemented properly and consistently, provide a system of internal controls to account for and safeguard these funds.
Key Findings
- The Surrogate’s Court Clerk (Clerk) did not maintain appropriate court and trust fund records.
- The Surrogate’s Court Clerk did not make entries into a surrogate’s register to record money ordered to be paid into a court. As a result, the Clerk was unable to readily identify all assets ordered to be paid into court.
- The Surrogate’s Court Clerk’s records could not be used to verify that all court-ordered deposits had been properly received and deposited by the Treasurer.
Key Recommendations
- The Surrogate’s Court Clerk should enter all court and trust fund actions into the surrogate’s register
1The day-to-day accounting and reporting for court and trust transactions is handled by the County’s Fiscal Affairs Office.
2 Security interest in property filed to ensure payment for contracted services rendered on the property
3 When the whereabouts of any person entitled to payment from the estate is unknown