Audit Report on the Estate Management Practices of the Kings County Public Administrator

AUDIT REPORT IN BRIEF

The objective of this audit was to determine whether the Office of the Kings County Public Administrator (KCPA) had adequate controls over its estate management practices.

There are five Public Administrators (PAs) in New York City, each of whom serves one of the City’s five counties and reports to the county Surrogate’s Court. Each PA is responsible for administering the estates of individuals in the county who die intestate (those who die without a will) or when no other appropriate individual is willing or qualified to administer the estate. KCPA’s office handles the estates of such decedents in Brooklyn.

During this audit, KCPA officials were unable to identify the number of estates KPCA was currently administering. According to the City’s Fiscal Year 2008 annual financial report, KCPA collected $1.7 million in revenues and had expenditures totaling $536,127, consisting of $491,077 for Personal Service expenditures and $45,050 for Other Than Personal Service expenditures.

Audit Findings and Conclusions

We determined that during Fiscal Year 2008, KCPA had inadequate controls over its estate management practices. Management had no written procedures or supervisory review system and CompuTrust, its centralized computer record-keeping system, was neither secure nor its data reliable. Management does not maintain a reliable record log of all estates and supporting documentation under its administration, and therefore, does not know the total number of estates it is responsible for. Consequently we cannot be assured that the estate distributions that KCPA has made were appropriate.

We also found that KCPA failed to: (1) report its activities to oversight organizations, as required; (2) adequately review its financial transactions; and (3) track inventory it held for estates. In addition, there were procurement deficiencies, including undocumented vendor selections, missing contracts and 1099s, and inadequate documentation of the December 5, 2007 KCPA real estate auction.

Audit Recommendations

To address these issues, we make 18 recommendations, including that KCPA should ensure that:

• Management can identify all estates under its administration, along with their current status, assigned attorneys, upcoming key dates and deadlines, inventories, and the appropriate reports for each.

• Staff has written policies and procedures that detail how estates should be administered.

• All required reports are submitted in a timely manner and that a copy of each report is maintained in a centralized office file.

• An audit of KCPA’s office by an independent certified public accountant for Fiscal Year 2008 is completed as soon as possible.

• Inventory is logged into a central log as soon as the items are brought to the office, noting, at a minimum, the date received, estate number, inventory bag number, and bin in the vault in which inventory will be maintained.

• Office documents all pertinent information regarding vendors, including how vendors are selected, as well as evidence of the 1099 forms issued to its vendors, and that it maintains current contracts in centralized office files.

Agency Response

In their response, KCPA officials agreed with 15 of the 18 recommendations and did not address three recommendations.