State audit chastises clerk of court's office
BY LINDELL JOHN KAY
Wednesday, June 12, 2019
State auditors have determined too many Nash County court clerks have their hands in the pot, which increases the possibility of fraud.
The Nash County Clerk of Court’s Office allowed too many employees access to its systems and failed to accurately assess and collect estate inventory fees and sufficient bonds for wards of the state, according to a report issued on June 5 and signed by State Auditor Beth Wood.
“While no instances of fraud were identified during the audit period, an increased risk of undetected fraud existed because access rights and duties were not properly segregated,” the report states.
The audit covered July 1, 2018, through Feb. 28, 2019. Two clerks held office during that time frame.
Rachel Joyner served as clerk from 1968 until her retirement last year. Linda Thorne won an uncontested election in November and took office in December. Thorne, a Democrat, is the first new clerk in 50 years. She worked several years as Joyner’s assistant clerk.
In the state financial audit, Wood identified improvements needed in the Clerk Office’s internal control over selected fiscal matters.
“We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives,” Wood said in the audit report.
Thorne could not be reached for comment, but her responses to the audit findings are included in the report summary. The report issued three findings:
• Improper system access increased risk of undetected errors and fraud. Staff in the Clerk’s Office had the ability to change or delete information in multiple systems, resulting in inadequate segregation of duties. The Clerk’s Office handled $8 million in receipts during the audit period. Six out of 33 employees, or 18 percent, had inappropriate access to the Financial Management System or the Criminal Court Information System.
“Improper segregation of duties increased the risk that errors, unauthorized transactions and fraud could go undetected,” the report states. “While no instances of fraud were identified during the audit period, an increased risk of undetected fraud existed because access rights and duties were not properly segregated.”
According to the clerk, the small staff size at the Rocky Mount location makes it difficult to achieve proper duty segregation.
The report recommends the clerk reassign system access rights to properly segregate duties in accordance with the Clerk of Superior Court Financial Policies and Procedures Manual.
• Failure to accurately assess and collect estate inventory fees. The Clerk’s Office did not accurately assess and collect estate inventory fees in accordance with state law. The Clerk’s Office collected $135,452 in estate fees during the audit period. Auditors examined 65 of 183 estates in the audit period in which a final inventory was filed.
Fees totaling $452 for eight estates were not accurately assessed or collected when the inventory was filed.
As a result, there were delays and a potential loss in the collection of estate costs and fees.
According to the clerk, employee oversight led to unintentional mistakes in calculating the fees and not collecting the required amounts when the final inventories were filed.
The report recommends the clerk implement effective monitoring procedures such as reviewing fee calculations for accuracy and identifying uncollected fees at the time of final inventory filing.
• Failure to assess and collect sufficient bonds for estates of minors and incapacitated adults. Auditors examined all 34 guardianship estates for wards that required bonds and found four guardianship estates with insufficient bonds. Assets in the four estates totaled $13,663 and required $17,079 in bonds. However, the clerk only assessed and collected $3,000 in bonds.
According to the clerk, employee oversight led to mistakes in calculating the bond amounts.
The report recommends the clerk implement monitoring procedures such as a continual review of ward assets.
State auditors evaluate internal control by applying five interrelated components: Control environment, risk assessment, control activities, information and communication and monitoring.