Follow-Up Audit of the Financial and Operating Practices of the Richmond County Public Administrator

AUDIT REPORT IN BRIEF

This is a follow-up audit to determine whether the Richmond County Office of the Public Administrator (PA) implemented the recommendations made in a previous audit of its financial and operating practices that was issued on May 24, 2000. In this report, we discuss the 17 recommendations from the prior audit in detail, as well as the current implementation status of each recommendation.

In Fiscal Year 2000, our office conducted an audit to determine whether the PA complied with Article 11 of the New York State (State) Surrogate’s Court Procedure Act (SCPA), the Report and Guidelines of the Administrative Board for the Offices of the Public Administrators (Administrative Board Guidelines), and other applicable City and State laws and regulations. That audit found that the PA:

• Did not notify the Surrogate’s Court of estates that were open for more than two years.
• Paid excessive legal fees for some estates.
• Underreported $2,300 of miscellaneous income to the Internal Revenue Service (IRS).
• Did not clearly document inventories found at decedents’ residences.
• Did not update its list of physical assets to reflect the purchase of computer equipment.
• Did not have an audit performed by an independent Certified Public Accountant (CPA).
• Did not report correct estimated estate values to the State Comptroller.
• Did not submit required documentation to the City Comptroller.

Audit Findings and Conclusions

Of the 17 recommendations made in the previous audit, the PA implemented eight and did not implement seven. Two recommendations were no longer applicable.

In this follow-up audit, we found that the PA now notifies the Surrogate’s Court of estates that are open for more than two years, has updated its list of physical assets to reflect new purchases, is submitting required reports to the State Comptroller, and is submitting the required documentation to the City Comptroller.

However, the following areas still need improvement:

The PA:

• Has not developed procedures for identifying, tracking, and reporting required IRS Form 1099 (1099) payments to the IRS.
• Has not ensured that both the preliminary inventory list it prepares during estate residence searches and the auctioneer statements of estate items sold are appropriately detailed.
• Does not have an annual audit conducted by a CPA.
• Does not include the correct estimated value of estate property in its report to the State Comptroller.

Audit Recommendations

To address the issues that still exist, the PA should implement the recommendations of the previous audit that were not fully addressed. These recommendations are repeated below, as follows:

The PA should:

• Develop procedures for identifying, tracking, and reporting to the IRS 1099 payments.
• Implement a coding system or other mechanism to identify IRS Form 1099 payments so that at the end of the year it can summarize the amounts and forward the information to the individuals receiving payments and to the IRS.
• Ensure that the preliminary inventory list prepared during the searches is detailed and legible.
• Ensure that auctioneer statements of items sold contain details for items sold in grouped lot numbers.
• Contract for an annual audit in accordance with the Surrogate’s Court Procedure Act.
• Select the independent auditing firm in accordance with Comptroller’s Directive #5.

Ensure that it includes the correct estimated value of all of an estate’s property in its report to the State.