Summary Of Findings From FY2000-FY2003, Chapter 7 Audits And Field Exams, All Regions

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Summary of Findings from

FY 2000 - FY 2003 Chapter 7 Audits and Field Exams

All Regions

(Sorted by Category & Frequency of FY 2002 - FY 2003 Findings)

 
 
 
 
 
FY 2000 FY 2001 FY 2002 FY 2003
Number of OIG Audits: 219 167 166 145
Number of UST Field Exams: 88 106 142 101
Number of CPA Audits: 0 0 14 0
Total 307 273 322 246
FY 2000- FY 2001 FY 2002- FY 2003
Description of Finding Total Findings % of Reports % of Findings Total Findings % of Reports % of Findings
Case Administration Issues
Investigation, Liquidation, and Collection of Assets:
No or inadequate tracking system for receivables 107 19% 2% 95 17% 2%
Assets values not verified or reasonably determined 45 8% 1% 81 14% 1%
Assets not timely investigated/pursued 65 11% 1% 75 13% 1%
Casualty/auctioneer insurance not verified or maintained 90 16% 1% 73 13% 1%
No/inadequate or untimely report of sale/auctioneer's report 20 3% 0% 57 10% 1%
Assets not timely liquidated or collected 60 10% 1% 55 10% 1%
Estate assets or records not secured or untimely secured 46 8% 1% 51 9% 1%
Untimely/inadequate/no inventory of estate assets 35 6% 1% 45 8% 1%
Sale/settlement without notice or court order 66 11% 1% 38 7% 1%
Sale/settlement not in compliance with Bankruptcy Code 23 4% 0% 21 4% 0%
Untimely turnover of auction proceeds 8 1% 0% 18 3% 0%
Security interests not verified 11 2% 0% 14 2% 0%
Trustee cannot account for all assets 9 2% 0% 13 2% 0%
No escrow account for real estate sale 0 0% 0% 2 0% 0%
Assets sold to insiders/related parties 2 0% 0% 2 0% 0%
Abandonments and Exemptions:
Abandonments & exemptions not documented 15 3% 0% 17 3% 0%
Formal abandonment (554a) not made when appropriate 20 3% 0% 10 2% 0%
No or untimely objection to improper exemptions 5 1% 0% 6 1% 0%
Non-compliance with Bankruptcy Code re: abandonments 2 0% 0% 3 1% 0%
Case Administration and Civil Enforcement:
No or inadequate case progress review n/a n/a n/a 56 10% 1%
Delay in case administration n/a n/a n/a 29 5% 1%
Inadequate civil enforcement procedures n/a n/a n/a 5 1% 0%
Bonding:
Auctioneer bond not verified, inadequate or not obtained 34 6% 1% 23 4% 0%
Underbonded - Individual bond 2 0% 0% 3 1% 0%
No review for necessary increases in bond 3 1% 0% 2 0% 0%
Separate bond not obtained when necessary 1 0% 0% 1 0% 0%
Underbonded - Blanket bond less than 100% 3 1% 0% 1 0% 0%
Untimely notice or bond claim for missing auction proceeds 1 0% 0% 1 0% 0%
Operating Cases:
Operating reports not submitted as required 8 1% 0% 9 2% 0%
No court order for operating case 1 0% 0% 6 1% 0%
Other Case Administration Issues:
High-yield investments not considered 85 15% 1% 122 21% 2%
Inadequate supervision of professionals 57 10% 1% 78 14% 1%
Estate funds not invested 51 9% 1% 35 6% 1%
Estate tax returns not prepared/filed when appropriate 0 0% 0% 25 4% 0%
No-asset cases: assets/asset values not adequately investigated 23 4% 0% 19 3% 0%
No-asset cases justification not documented 5 1% 0% 8 1% 0%
Reporting Issues
Asset Tracking / Case Status:
Scheduled assets on Form 1 do not match petition/schedules 207 36% 3% 206 36% 4%
Unscheduled assets not recorded/properly identified on Form 1 100 17% 2% 190 33% 3%
Form 1 errors - miscellaneous / improper cut-off date 210 36% 3% 160 28% 3%
Asset status not accurately reflected and tracked on Form 1 90 16% 1% 117 21% 2%
Form 3 errors - miscellaneous / improper cut-off date 87 15% 1% 81 14% 1%
Cases omitted on Form 3 48 8% 1% 52 9% 1%
Form 1 and 2 not kept up-to-date 79 14% 1% 47 8% 1%
Transaction not recorded on Form 1 79 14% 1% 43 8% 1%
Form 3 does not agree with to Form 1 and/or Form 2 32 6% 1% 26 5% 0%
Form 1 - trustee's value (Column 6) not reasonable 12 2% 0% 22 4% 0%
No or incorrect tax id #'s on Form 2 21 4% 0% 17 3% 0%
Abandonment not properly tracked on Form 1 0 0% 0% 15 3% 0%
Form 1 not prepared, maintained, or submitted 10 2% 0% 7 1% 0%
Form 3 not prepared, maintained, or submitted 3 1% 0% 2 0% 0%
No UST reports prepared/submitted 0 0% 0% 1 0% 0%
Receipts and Disbursements:
Transactions not adequately described on Form 2 171 30% 3% 124 22% 2%
Receipts not properly referenced between Forms 1 & 2 136 23% 2% 116 20% 2%
Form 2 errors - miscellaneous / improper cut-off date 95 16% 2% 70 12% 1%
Inaccurate Uniform Transaction Code (UTC) on Form 2 0 0% 0% 50 9% 1%
Transaction not recorded on Form 2 49 8% 1% 36 6% 1%
Inaccurate payee/payer on Form 2 33 6% 1% 34 6% 1%
Form 2 not prepared, maintained, or submitted 13 2% 0% 13 2% 0%
Inaccurate amounts on Form 2 34 6% 1% 12 2% 0%
Check numbers not recorded on Form 2 11 2% 0% 2 0% 0%
No recorded running balance on Form 2 4 1% 0% 2 0% 0%
Internal Controls
Bank Accounts:
Bank accounts not timely/properly reconciled or reviewed 417 72% 7% 361 64% 6%
Funds deposited to non-estate accounts (commingled) 58 10% 1% 37 7% 1%
Void checks not accounted for 47 8% 1% 28 5% 0%
Checks not properly prenumbered 27 5% 0% 22 4% 0%
Bank statements/checks not properly captioned 21 4% 0% 20 4% 0%
Missing bank statements 40 7% 1% 19 3% 0%
Bank account not promptly opened upon receipt of funds 12 2% 0% 14 2% 0%
Blank checks not properly secured 17 3% 0% 12 2% 0%
Unauthorized depository or improper/unreported bank account 8 1% 0% 5 1% 0%
Bank account on monthly report/trustee's file not on Form 2/3 0 0% 0% 2 0% 0%
Trustee not only signer on operating account 0 0% 0% 1 0% 0%
Bank reconciliations operating cases not timely reconciled 2 0% 0% 0 0% 0%
Disbursements:
Invoices/support not cancelled to prevent duplicate payment 171 29% 3% 243 43% 4%
No stale-dated check policy / no "Void after 90 days" 99 17% 2% 91 16% 2%
Disbursements without court order (when required) 74 13% 1% 53 9% 1%
Missing invoices/support for expenses 40 7% 1% 47 8% 1%
No log for disbursment checks that have control numbers 38 7% 1% 42 7% 1%
Missing cancelled checks 11 2% 0% 13 2% 0%
Unauthorized disbursements by wire transfer/cashier's check 19 3% 0% 13 2% 0%
Signature stamp not controlled by trustee/used to sign checks 14 2% 0% 11 2% 0%
Checks not signed manually by trustee 4 1% 0% 9 2% 0%
Starter checks not destroyed after receipt of permanent checks 12 2% 0% 8 1% 0%
Expenses not actual and necessary 1 0% 0% 1 0% 0%
Endorsement does not match payee/checks altered 4 1% 0% 1 0% 0%
Cannot perform proof of cash 0 0% 0% 1 0% 0%
Evidence that checks have been signed before filled out 2 0% 0% 0 0% 0%
Use of counter checks or money orders 1 0% 0% 0 0% 0%
Checks payable to "cash" or "bearer" 1 0% 0% 0 0% 0%
Receipts:
Cash receipts log not properly maintained 466 80% 8% 468 82% 8%
Receipts log not periodically traced from log to bank statement 204 35% 3% 201 35% 3%
Untimely deposits 146 25% 2% 126 22% 2%
No or insufficient supporting documents for receipts 92 16% 1% 88 15% 2%
No numbered receipts book or receipts not given 81 14% 1% 87 15% 2%
Incoming checks not made payable to estate/trustee 47 8% 1% 57 10% 1%
Missing deposit slips 33 6% 1% 24 4% 0%
No or inadequate NSF tracking procedure 36 6% 1% 22 4% 0%
Checks not restrictively endorsed immediately upon receipt 9 2% 0% 21 4% 0%
Undeposited funds in estate file or other unsecure location 17 3% 0% 20 4% 0%
Earnest monies not properly accounted for 8 1% 0% 5 1% 0%
Segregation of Duties and Office Operations:
Insufficient segregation of duties 173 30% 3% 140 25% 2%
Trustee does not directly receive unopened bank statements 32 6% 1% 42 7% 1%
Trustee does not actively supervise employees 14 2% 0% 6 1% 0%
Operating case bank statements not received/opened by trustee 1 0% 0% 2 0% 0%
File Maintenance / Records Retention:
No disaster recovery plan 112 19% 2% 139 24% 2%
Files not maintained in business-like manner 27 5% 0% 39 7% 1%
Financial files not readily accessible/segregated in file 33 6% 1% 26 5% 0%
Case files missing/not retained per Handbook 13 2% 0% 17 3% 0%
Case files and accounting records not secured 7 1% 0% 7 1% 0%
Computer Operations and Security:
Computer system not secure 40 7% 1% 72 13% 1%
Passwords known to others/not changed annually 136 23% 2% 70 12% 1%
Insufficient computer back-up procedures 134 23% 2% 66 12% 1%
Transactions can be deleted/changed 22 4% 0% 35 6% 1%
Trustee/staff cannot operate computer system 21 4% 0% 10 2% 0%
No user's manual 9 2% 0% 4 1% 0%
Computer software not-up to date 0 0% 0% 3 1% 0%
Other Miscellaneous Findings (not otherwise classified) 534 92% 9% 363 64% 6%
Total Number of Audit Findings 6,014 5,758


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Updated May 7, 2015