Follow-up Audit Report on the Financial and Operating Practices of the Bronx County Public Administrator’s Office

AUDIT REPORT IN BRIEF

This is a follow-up audit to determine whether the Bronx County Public Administrator’s Office (Bronx PA) implemented the recommendations made in an earlier audit, Audit Report on the Financial and Operating Practices of the Bronx County Public Administrator’s Office, issued June 23, 1999 (Audit No. MD99-098A). The earlier audit determined the extent to which the Bronx PA complied with the provisions of Article 11 of the Surrogate’s Court Procedure Act (the Act), 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. This audit discusses the details of the recommendations of the previous audit report and the status of each recommendation.

The previous audit made 37 recommendations to the Bronx PA. Of the 37 recommendations, 20 were implemented, one was partially implemented, 13 were not implemented, and three are no longer applicable.

This follow-up audit found that the Bronx PA has improved its procedures regarding the handling of its estates. However, the PA still needs to improve its inventory procedures and correctly report to the Internal Revenue Service all payments made to independent contractors.

The Bronx PA should implement the recommendations of the previous audit that are still applicable but were not fully addressed. Upon implementation of these recommendations, the PA will have corrected the conditions cited in the previous report and in this follow-up report. The recommendations are somewhat revised in accordance with the findings of this follow-up report. The recommendations are that the PA should:

• Ensure that all decedents’ assets are recorded in its computerized inventory system.
• Ensure that the inventory system is updated to reflect the disposition of assets.
• Conduct an annual physical inventory of decedents’ properties.
• Ensure that all supporting documentation for disbursements is properly maintained and filed in corresponding estate folders to facilitate review and approval for prompt payment.
• Stamp paid invoices as cancelled to prevent duplicate payment.
• Develop and adhere to written procedures for identifying, tracking, and reporting 1099-reportable payments.
• Review its practice of issuing 1099 forms for the Bronx PA general counsel’s support staff, since the PA is not directly responsible for their compensation.
• Review the 1099-reportable payments cited in our previous audit and this follow-up audit, and accordingly amend the informational returns.
• Properly secure blank checks.
• Turn over to the City $3,851 in unclaimed funds owed it.
• Select an independent auditing firm in accordance with Comptroller’s Directive #5.
• Contract for an annual audit of its operations in accordance with the Surrogate’s Court Procedure Act.
• Obtain a budgeting decision from OMB as to whether the audit should be paid for out of additional City funding or suspense funds and formally request funding from the City’s OMB to pay for the annual audit.
• Comply with the State law requiring it to report all estates that fall within the State guidelines.

The matters covered in this report were discussed with Bronx PA officials during and at the conclusion of this audit. A preliminary draft report was sent to Bronx PA officials on May 3, 2004, and was discussed at an exit conference held on May 18, 2004. On May 20, 2004, we submitted a draft report to Bronx PA officials with a request for comments. On June 10, 2004, we received a written response from Bronx PA officials.

In their response, Bronx PA officials stated that they have taken steps to implement or partially implement 11 recommendations, disagreed with one recommendation, and did not address two recommendations.