THOMPSON TO RESIDENTS OF
-Audit of
New York City Comptroller William C. Thompson, Jr. today released an audit that found a culture of nonchalance and mismanagement existed at the
"From the time my auditors began this audit, there seemed to be one startling revelation after another with regards to the lack of detail paid to the process of distributing and accounting for the estates of the deceased," Thompson said. "In every area we looked, deficiencies were found, and corrections had to be made.
Thompson's audit, available at www.comptroller.nyc.gov , covered Fiscal Year 2008 (FY08) and analyzed the management practices of the KCPA, the agency responsible for administering the estates of individuals in
Thompson found that, among other things, the KCPA could not identify how many estates the office was responsible for at any given time, the computer system used to keep track of estates was not supervised properly, and the data entered into the system was neither secure nor reliable.
When cash and inventory, such as jewelry, arrive at the KCPA, they should be safeguarded and a detailed accounting of each estate maintained. Thompson's auditors found that in FY 08, the KCPA did not keep track of cases received, did not log inventory, mail, phone calls, or complaints to ensure that proper actions were taken for each estate.
"My auditors were also informed by management that they were unable to determine the number of estates being administered," Thompson said. "Staff members also explained that all estate files were not in the file room, and there were no records of where they may be. Keeping track of estates and their whereabouts is what KCPA is supposed to do. It is common sense and sound business 101."
The Comptroller conducted an audit of the KCPA in Fiscal Year 2005. Since that time, the KCPA has experienced significant turnover, with almost all current staff employed for less than two years, including a new PA, who was appointed in January 2009.
"We also found no written formal policies for operations at the agency. Since the majority of the staff is there less than two years, and would have required training and guidance, written procedures would have ensured that day-to-day activities were carried out, which they clearly weren't," Thompson continued.
Due to a number of factors, such as lack of supervisory reviews and underutilization of the CompuTrust computer system, auditors found that the information in the system was unreliable. In addition, Thompson found that more than half of the users had access to all levels of administration in the system, users were still in the system after they ended employment, there was no requirement to change passwords, and no backup of the system existed, which could cause the office to lose all its critical information.
More troubling, Thompson found that all estate items were not entered into the CompuTrust system as required. In one test, auditors found that 21 percent of the selected bags of inventory, including jewelry, was not listed in the system.
"This lack of detail could lead to possible theft of the valuable belongings of the deceased," Thompson said.
KCPA is responsible for safeguarding the belongings of a decedent's residence once a search for valuables is conducted and the inventory brought to the office. However, the testing of inventory lists showed that they were not updated and did not reflect where in the vault such items were being kept. A sample found that three bags of belongings were not entered, as required, into the computer system.
"All inventory should be logged and accounted for at the time it is received. Accurate inventory will ensure that all belongings are on site," Thompson said. "Otherwise, the KCPA opens the door to misplacement and possibly theft."
Other findings of the audit included:
· Failure to report activities to the proper City and State entities
- No monthly bank account reconciliations and inadequate controls over suspense account
· Open checks were not voided after 180 days as required
· Deficiencies in procurement of outside vendors
· Lack of documentation of real estate auctions
"I sincerely hope that the new
Thompson made eighteen recommendations to the
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