Did you know that in July 2007 an audit program was put into place
by the Statewide Grievance Committee? Law firms are randomly
selected for audit of their IOLTA account(s) to ensure proper accounting.
In 2007, the Committee audited approximately 95 law firms and everyone
was found to have bookkeeping mistakes according to Attorney Frances
Mickelson-Dera of the Statewide Grievance Committee. The most
common mistakes are:
1. No disbursement/receipt ledger.
2. No individual client ledger card.
3. Client Ledger updates not performed on regular basis.
4. No quarterly reconciliation.
5. Quarterly reconciliation is not accurate.
6. More than $500 in attorney's personal funds held in the bank account.
7. The attorney is using the IOLTA account for personal transactions.
8. Memo description on checks not sufficient.
9. Memo description on deposit slips not sufficient.
10. Fee retainers not property account for.
11. Payments made to cash, cash withdrawals, debits and online payments.
12. Checks outstanding over six months.
13. Checks outstanding over six months and not investigated by the attorney.
14. Un-reimbursed fees or service charges on the account.
15. Attorney is holding funds in excess of $10,000 for longer than 60 days.
16. Attorney has failed to update the registration information.
17. Account not properly designated as an IOLTA account.
18. HUD-1 contained inaccuracies, errors or omissions.
19. Interest not remitted to Connecticut Bar Foundation.
20. Overdrafts on the account were not reported to SGC.
21. Unacceptable storage location for financial data.
22. Attorney is not maintaining financial data for at least 7 years.
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