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Audit faults Baltimore City Circuit Court clerk’s office for outstanding fees

A state audit has found “significant” accounting deficiencies in the Baltimore City Circuit Court clerk’s office, including a failure to collect nearly $8 million in outstanding criminal fees and to verify that more than $34.3 million in civil fees had been paid.

The Office of Legislative Audits, in its report released Monday, urged Frank M. Conaway — the court’s clerk and a declared Democratic candidate for Baltimore mayor — to improve his office’s accounting procedures.

The nearly 33-month audit, which ended in September, found what the auditors called “significant deficiencies in the design or operation of internal control that could adversely affect the office’s ability to maintain reliable financial records, operate effectively and efficiently, and/or comply with applicable laws, rules, and regulations.”

These shortcomings included the failure to collect $7.8 million in outstanding criminal fees due before January 2009 and which had not been subject to any documented collection efforts as of June 30, 2010, the report stated.

The clerk’s office also lacked adequate procedures and controls to verify the collection of land record and civil court fees — estimated at $34.3 million — in fiscal 2010, which ended Sept. 30, the report added.

As part of its study, auditors made five deposits of land record fees and six of civil court fees, totaling $1.8 million. The test found that the clerk’s office lacked any documentation to verify the deposits.

“Although we were advised by office management that independent verifications of recorded collections to deposit were performed, such verifications were not documented,” the report stated. “We subsequently verified that these collections were, in fact, deposited by the office.”

Additionally, auditors said that between $1.1 million and $1.3 million in criminal court fees collected during fiscal 2010 could not be verified.

The audit covered the period from Jan. 1, 2008, to Sept. 12, 2010.

Conaway referred calls concerning the report to Tony Torain, his assistant chief deputy for administration.

Torain said fees are being properly charged and collected but agreed with auditors that the clerk’s office must improve the way it double-checks the numbers to ensure accurate accounting.

“That’s where we’re falling short,” he said.

Torain assailed as “patently untrue” the auditors’ comment that the clerk’s office has not undertaken “any collection efforts” — such as dunning notices or referrals to the state Department of Budget and Management’s Central Collection Unit — to collect the $7.8 million. He said the clerk’s office has been in communication with the sheriff’s office and CCU to improve collection efforts.

“We take very seriously the legislative auditors’ report,” Torain said. “We see them as tools to improve our operations here. We are going to make appropriate changes at the places where we agree.”

The auditors recommended that the clerk’s office reach a memorandum of understating with the city sheriff’s office that defines each party’s responsibilities with regard to collections, with appropriate oversight by the clerk. The Office of Legislative Audits, a division of the Department of Legislative Services, also called on the clerk’s office to verify — by checking court transcripts — the fees judges charge in criminal cases, as well as when those fees have been waived.

In a letter to the auditors, Court of Appeals Chief Judge Robert M. Bell stated that the Maryland judiciary concurs with the report’s finding and recommendations. The letter, which Conaway co-signed, added that the clerk’s office is taking steps to improve its verification of accounts receivable.

“The verification of collections to deposits is now documented by appropriate management personnel,” the letter stated. “The clerk’s office accounting department includes pre-numbered receipt forms in the deposit verification process. The forms are noted as issued, voided or on hand.”