02 May 2017

Five Tips to Avoid Curveballs in Your Field Exams, Audits and TIR Reviews

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Whether it’s a field exam, audit, or TIR Review, of course you want to perform well. But don’t sweat it—take a step back, breathe and relax, and let these tips help you swing for the fences during your next audit.

Check out 5 tips to avoid curveballs in your next field exam below:

1. Print your TIR and ensure that the Form 3 is accurate

(Handbook 5-1, Handbook Supplementary Materials)

Your TIR should include all of your cases with accurate dispositions as of the ending date of your reporting period. The Handbook states that all cases without a disposition after 120 days of the 341(a) meeting must be listed if there is no NDR filed before that time. And…if you are holding cash in a case, it must be listed on your Form 3.

2. Review your Form 1 Column 6 (remaining gross value)

(Handbook 5-1, Handbook Supplementary Materials)

Make sure this column accurately reflects which assets you are currently administering and the value you anticipate receiving for administration of these assets. Also consider the following questions:

  1. Have you valued and taken control of these assets to include abandonment/insurance when needed?
  2. Did you catch any new assets scheduled and did you recognize any significant changes to scheduled values?
  3. Did you list all unscheduled assets?
  4. Does administering this asset make sense given fee accumulation?
  5. Is the TFR(e) date accurate given the time to administer these assets? If all assets are administered, you must file the TFR within nine (9) months.

3. Review your Form 1 notes

(Handbook 5-1, Handbook Supplementary Materials)

When reviewing your Form 1 notes, make sure they are dated and they explain what is needed to be done to liquidate your remaining assets and what you have done on at least a quarterly basis to move them forward.  Do the notes show a strategy of expeditiously and appropriately administering assets?  Make sure the Form 1 notes show what happened to assets that were originally valued by the Trustee in Column 3 (original estimate of value), but were not administered.

4. Review the accuracy of your Form 2 Reports and your transactions

(Handbook 5-1, Handbook Supplementary Materials, Primary UTC Reference Guide)

Ensure that your Form 2 reports are appropriately balanced with your Form 1 reports, and that all transactions – including constructive disbursements – are shown. Did you appropriately notice all sales, settlements, and administrative expenses and timely file Reports of Sale when needed to support these transactions?  Do not reference funds to third parties (UTC Codes 1180/1280).

5. Step back and look at your overall administration of the case

(Handbook Chapters 4 & 5)

Consider the following questions when reviewing your case administration:

  1. Are you filing court dockets timely and accurately?
  2. Should you be administering more/less given claims and costs of administering?
  3. Are you keeping costs under control?
  4. Are professional fees and expenses given distributions to unsecured creditors?
  5. Do you have supporting documents for expenses and ledgers to track installment payments/receivables?
  6. If the case was converted from a Chapter 11, did you always open new accounts and file a Final Report if you were the Trustee?