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

AUDIT REPORT IN BRIEF

This audit determined the effectiveness of certain estate management practices of the Kings County Public Administrator (KCPA). The KCPA is responsible for administering the estates of decedents in Brooklyn who leave no will, personal representative, or known heirs, or who leave heirs who are not qualified or willing to administer the estate. The Public Administrator reviews the personal effects of the decedent, collects and manages assets, releases assets to authorized parties, secures real property, pays estate creditors, collects estate debts, sells real estate and other personal property at public auction, and distributes estate assets to heirs. The Public Administrator also arranges funerals, notifies next of kin, and arranges for an accountant to prepare decedents’ income taxes and for counsel to prepare estate taxes.

Audit Findings and Conclusions

The KCPA adequately handled certain estate management responsibilities for estates closed in Fiscal Year 2004. The KCPA generally handled the estates’ assets, fees, and distributions in an appropriate manner. It also properly secured and restricted access to those decedents’ personal effects that were stored in the KCPA office’s vaults and locked rooms. In addition, the KCPA generally required its Counsel to limit requests for compensation for legal services to comply with the October 3, 2002 Interim Report and Guidelines of the Administrative Board.

However, our audit identified some areas of concern. Neither of the KCPA’s two repositories of estate information-an automated system that tracks financial data and the estate files-contains all the key information on an estate. Furthermore, the estate files are often disorganized collections of documentation. As a result, a complete and accurate picture of the status of an estate is often not readily available. In addition, the KCPA office was unable to demonstrate that the fees it charged estates for administrative expense, or the fees it allowed its Counsel to charge for estates valued at under $25,000, were appropriate. Finally, the KCPA did not ensure that its Counsel always prepared an affidavit of legal services.

Audit Recommendations

To address these issues, the audit recommended that the KCPA:

• Maintain better organized case files.
• Ensure that case files contain all key information.
• Add a checklist to each case file that clearly shows all of the actions taken on an estate.
• Attempt to obtain documentation clearly showing approval of the current fees for administrative expense.
• Attempt to obtain documentation showing approval of its set-fee schedule for the legal services provided to estates valued at under $25,000.
• Ensure that the required affidavits of legal services are filed for each estate.

KCPA Response

n June 1, 2005, we submitted a draft to the KCPA office with a request for comments. We received a written response on June 21, 2005. In its response, the KCPA office disagreed with some of the audit’s findings and many of its recommendations. We address each of their concerns in the body of the report.