Office of the Register of Wills Baltimore County, Maryland

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1 Audit Report Office of the Register of Wills Baltimore County, Maryland April 2002

2 This report and any related follow-up correspondence are available to the public. Alternate formats may also be requested by contacting the Office of Legislative Audits as indicated at the bottom of the next page or through the Maryland Relay Service at Please address specific inquiries regarding this report to the Audit Manager listed on the inside back cover by telephone at (410) Electronic copies of our audit reports can be viewed or downloaded from the Internet via The Department of Legislative Services Office of the Executive Director, 90 State Circle, Annapolis, Maryland can also assist you in obtaining copies of our reports and related correspondence. The Department may be contacted by telephone at (410) or (301)

Please address specific inquiries regarding this report to the Audit Manager listed on the inside back cover by telephone at (410) 946-5900.

3 April 3, 2002 Senator Nathaniel J. McFadden, Co-Chair, Joint Audit Committee Delegate Samuel I. Rosenberg, Co-Chair, Joint Audit Committee Members of Joint Audit Committee Annapolis, Maryland Ladies and Gentlemen: We have audited the Office of the Register of Wills for Baltimore County, Maryland for the period beginning January 22, 1999 and ending December 9, Our audit disclosed that the Office was not verifying recorded cash receipts to subsequent deposit. Respectfully submitted, Bruce A. Myers, CPA Legislative Auditor

audited the Office of the Register of Wills for Baltimore County, Maryland for the period beginning January 22, 1999 and ending

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5 Agency Responsibilities Background Information The Register of Wills is a public office established under the Constitution of Maryland. The Office oversees the administration of decedents estates and provides assistance (such as providing proper forms) to individuals administering estates. The Office collects inheritance taxes and other fees as provided by law. Inheritance tax collections less the applicable commissions are remitted to the State s General Fund. The Office retains fees and commissions for the payment of operating expenses. Fees and commissions in excess of operating expenses are reverted to the General Fund. Financial Information According to the Office s records, the Office s fiscal year 2001 gross receipts totaled $20,218,041 of which: $13,951,720 was remitted to the General Fund for inheritance tax collections; $2,209,881 was disbursed for operating expenses and refunds; and $4,056,440 (the remaining amount) represented fees and commissions in excess of operating expenses that were remitted to the General Fund. Current Status of Finding From Preceding Audit Report Our audit included a review to determine the current status of the one fiscal/compliance finding contained in our preceding audit report dated April 30, We determined that the Office had not satisfactorily addressed this finding and, therefore, it is repeated in this report. 3

The Office collects inheritance taxes and other fees as provided by law. Inheritance tax collections less the applicable commissions are remitted to the State s General Fund.

6 Findings and Recommendations Cash Receipts Finding #1 Independent verifications were not performed to ensure that all recorded collections were subsequently deposited. Analysis The Office did not verify that all recorded collections were deposited. Rather, the verification procedures in effect simply confirmed that the deposits recorded on the Office s monthly bank statements agreed with the related bank deposit tickets. This procedure did not ensure that the amounts deposited agreed with the collections recorded in the Office s cash receipts records. The Office s cash receipts totaled approximately $20 million during fiscal year A similar condition was commented upon in our preceding audit report. Recommendation #1 We again recommend that an employee independent of the collection and deposit functions verify that all recorded collections were deposited. We advised the Office on implementing the necessary control procedures with existing personnel. Audit Scope, Objectives and Methodology We have audited the Office of the Register of Wills for Baltimore County, Maryland for the period beginning January 22, 1999 and ending December 9, The audit was conducted in accordance with generally accepted government auditing standards. As prescribed by the State Government Article, Section of the Annotated Code of Maryland, the objectives of this audit were to examine the Office s financial transactions, records and internal control, and to evaluate its compliance with applicable State laws, rules, and regulations. We also determined the current status of the finding contained in our preceding audit report. 4

Rather, the verification procedures in effect simply confirmed that the deposits recorded on the Office s monthly bank statements agreed with the related bank deposit tickets.

7 In planning and conducting our audit, we focused on the major financial related areas of operations based on assessments of materiality and risk. Our audit procedures included inquiries of appropriate personnel, inspection of documents and records, and observation of the Office s operations. We also tested transactions and performed other auditing procedures that we considered necessary to achieve our objectives. The Office s management is responsible for establishing and maintaining effective internal control. Internal control is a process designed to provide reasonable assurance that objectives pertaining to the reliability of financial records, effectiveness and efficiency of operations including safeguarding of assets, and compliance with applicable laws, rules and regulations are achieved. Because of inherent limitations in internal control, errors or fraud may nevertheless occur and not be detected. Also, projections of any evaluation of internal control to future periods are subject to the risk that conditions may change or compliance with policies and procedures may deteriorate. Our reports are designed to assist the Maryland General Assembly in exercising its legislative oversight function and to provide constructive recommendations for improving State operations. As a result, our reports generally do not address activities that are functioning properly. This report includes a finding relating to a condition that we considered a significant deficiency 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. Our audit did not disclose any significant instances of noncompliance with applicable laws, rules, or regulations. The Office s response to our finding and recommendation is included as an appendix to this report. As prescribed in the State Government Article, Section of the Annotated Code of Maryland, we will advise the Office regarding the results of our review of its response. 5

We also tested transactions and performed other auditing procedures that we considered necessary to achieve our objectives.

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12 AUDIT TEAM Peter J. Klemans, CPA Audit Manager Edwin W. Thate, Jr., CPA Senior Auditor Roger E. Jaynes, III Staff Auditor

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