Institutes Best Practices to Protect $60 Million in Receipts
ERIE COUNTY, NY – Chris Jacobs called for and now has received an Independent Risk Assessment of the Clerk’s Registrar Division.
Last year Jacobs retained the certified public accounting firm of Tronconi Segarra & Associates to complete an assessment of the financial management of the cash receipts and financial reporting processes of the Division and make recommendations to implement best practices.
This Risk Assessment Project is related to the crisis discovered when Jacobs first took office where he found a major systems-breakdown in the Land Records Division where the Clerk’s Office records and receives the fees for all real estate transactions in Erie County. Jacobs found rooms filled with deeds and mortgages that had not been returned to county residents for over a year and a half, along with over $3 million in checks that had been received up to six months prior.
A far less visible but even more serious discovery was that “The Clerk’s Office had no real accounting system for the over $60 million that passes through the office each year,” said Jacobs. “We were shocked to find out the way these funds were accounted for, with a ‘homemade spreadsheet,’ not a legitimate double-entry bookkeeping system.”
“Accounting ‘101’ calls for checks-and-balances, I was concerned at how risky this was,” stated Jacobs. Jacobs said there were no checks-and-balances, one employee in charge of the distribution of millions of dollars with no oversight, no regular review and no internal reporting requirements in terms of a standard double entry accounting system.
“Literally all it would take is this one person altering the formulas in the spreadsheet and it would be next to impossible to know money was being diverted,” said Jacobs. Clerk Jacobs stressed that there is no indication whatsoever of malfeasance and the external review by Tronoconi concurred with Jacobs’ conclusion that the existing system was highly risky.
“Although the final report is just being released, we have implemented most of these recommendations over the last year, many are complete, including the conversion to a standard double-entry accounting system,” added Jacobs.
Last year the Erie County Clerk’s Office generated over $9 million in revenue after expenses which it remitted to the County’s General Fund to support services important to Erie County residents. “Without these funds Erie County would be in dire financial straits, we take our fiduciary responsibility very seriously,” stated Jacobs.
The full Tronconi Report is available on the Clerk’s website at www.erie.gov/clerk/riskassessment.