23 Dec 2013

Auditor in CaseLink Office Helps to Prepare you for your Next Audit

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Compliance Tip:

Auditor in CaseLink Office Helps to Prepare you for your Next Audit

Trustees experience two types of audits throughout their panel appointment, the Field Examination and the Independent Audit (formerly known as the OIG Audit).  Field Examinations are generally performed every two years with Independent Audits occurring every four years.  The Field Examination is conducted by U.S. Trustee personnel and focuses on case administration and internal controls while the Independent Audit is conducted by an approved, independent CPA firm.

During these audits, which typically range two to three days in length, the auditor will review approximately 10-15 cases.  These cases are not known ahead of time and are randomly chosen once the auditor arrives.

It is always best to operate as if the audit could happen at any moment.  The DOJ website provides copies of the most recent Handbook as well as two forms for the trustee to complete in advance of an audit.  The Internal Control Questionnaire (ICQ) and the Asset Administration Questionnaire (AAQ) detail the areas covered in the examination, and reference the appropriate explanations outlined in the Handbook.

Caselink Office has a built in Auditor feature which has proven to be a tremendous asset in assisting trustees with preparation for their audits.  Inside the Auditor feature is the AAQ and the ICQ.  Both of these documents are required for an audit and need to be filled out and given to the auditor upon their arrival.  The Auditor feature also has Tips for a Successful Audit and common issues found in audits, not to mention 43 different categories you can select to search for issues that may be outstanding in your system.

CaseLink Office Audit Checklist

Common Audit Issues:

  • Scheduled assets on Form 1 do not match petitions/schedules
  • Bank accounts not timely or properly reconciled or reviewed
  • Form 2 not prepared, maintained or submitted and miscellaneous Form 2 errors (improper cut-off, inaccurate amounts or UTC codes)
  • Asset status not accurately reflected and traced on Form 1
  • Delay in case administration
  • No or inadequate case progress review
  • Unscheduled assets not recorded or properly identified on Form 1
  • Miscellaneous Form 1 errors
  • Assets not timely investigated, pursued, liquidated or collected
  • Abandonments not properly traced on Form 1

Common Types of Cases Requested by Auditors:

  • Large asset cases
  • Cases with accounts receivables
  • Cases with real estate transactions
  • Cases with preference actions/fraudulent transfers
  • Cases with multiple professionals hired
  • Tax or wage cases
  • Aged cases
  • Operating cases
  • Cases with adversary actions
  • No asset cases with significant assets listed

Suggested CaseLink Office Reports to Assist with your Audit

  • Outstanding Checks Report – Helps you make sure to put stop payments on stale checks and/or reissue checks to claimants in a timely manner
  • Payments to Professionals – Ensure orders to pay are in QuikDocs and match payment amounts
  • A/R Status Report – Check that Accounts Receivables are collected in a timely manner
  • Unnecessary Bank Account – Close any unnecessary accounts
  • Bank Reconciliation Reports – Document monthly reconciliation procedures
  • Receipt Log Reports – Review and reconcile receipts log
  • Case Memo Reports – Verify all notes are current and reflect current status of case

QuikDocs Items to Review for your Audit

Review orders, notices and supporting documents

  • Orders Approving Sale
  • Orders Approving Employment of Professionals
  • Orders Approving Payment of Professionals
  • TFR approved before Distribution

Final Audit Suggestions

The following should be kept locked and secured by the trustee at all times:

  • Check/Deposit Stock
  • Micr Toner Cartridge
  • Disaster Recovery Plan
  • Signature Stamp

BMS and your Account Manager can assist you in preparing for your audit.  It’s a good rule of thumb to notify your Account Manager the moment you receive notice that you are going to be audited.  They can go over any questions you may have while providing tips and reports that you can run in advance.

All of these recommendations can help you to achieve a successful and stress-free audit! If you have questions regarding any of these processes in CaseLink Office, contact your Account Manager or our BMS Support Center Professionals via email or call 800-634-7734, ext. 6. They can walk you through the step-by-step process.

Are there other audit tips you think other trustee offices should know about? Share them here.