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Purpose of Review

The purpose of our review was to determine whether County officials have established appropriate controls to safeguard and account for court and trust funds for the period January 1, 2021 through September 22, 2023.

Background

Pursuant to a court order, certain assets may be provided to the court and then delivered to the County Treasurer (Treasurer) for safekeeping. Payments made pursuant to court orders commonly involve surplus money from foreclosures and contract disputes resulting in a mechanic’s lien.¹ These actions are recorded in the County Clerk’s office when payments are deposited as required by court order. Additionally, in certain circumstances,² 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 Treasurer generally established adequate procedures and maintained appropriate records.
• While the Treasurer filed an annual report with OSC showing court and trust fund actions for 2022, including beginning balances, receipts, payments and ending balances totaling $50,700, the Treasurer did not file an annual report for activity in 2021.
• The County’s depository (bank used to hold court and trust money) did not pay any interest on the court and trust funds or provide the Treasurer and OSC with an annual certificate of cash balances, along with other information, as required by New York State Codes, Rules and Regulations. 

Key Recommendations

The Treasurer should ensure that:

1. Annual reports are filed with OSC in a timely manner in accordance with statute. 
2. The depository bank holding court and trust money submits an annual certificate of balances to the Treasurer and OSC. 
3. Court-ordered money is deposited into an interest-bearing account and the interest earned for each action is properly accounted for and recorded.