Opinion ID: 2292344
Heading Depth: 1
Heading Rank: 3

Heading: audit-i

Text: On November 18, 1982 Respondent's books and records were audited at the direction of the then Division of Ethics and Professional Services (DEPS). This audit resulted from a claim by the Morristown Daily Record that it never received a check for $637.47 on account of collections made by Respondent on its behalf. The check, payable to Respondent, was dated December 1, 1978 and was deposited by Respondent on January 17, 1979. Respondent issued a trust account check on January 16, 1979 payable to the Daily Record for $637.47. This was the net amount after deducting his legal fee of 25 per cent. The bank statement dated January 23, 1979, indicated that the check cleared the bank. However, the check for the gross amount of $849.47 was returned unpaid by the bank on January 22, 1979. That check was never redeposited. In examining Respondent's records, the auditor noted that Respondent lumped all collections from various cases on one card. No running balance was maintained on the ledger card. The auditor selected two trust ledger cards for testing. In one case, disbursements exceeded known receipts by $1,062.57. In the second case, disbursements exceeded known receipts by $2,306.12. The auditor checked two additional files and discovered that in one case no receipts were recorded on the trust ledger card, but the file showed evidence of a $4,500.00 receipt. In the second case, Respondent did not have a trust ledger card for the file. Based on his review of Respondent's books and records, the auditor concluded that Respondent did not maintain a running balance of his cash receipts and disbursements in his trust account. There were no bank reconciliations or reconciliations of trust ledger cards. Not all receipts deposited to the trust account were recorded in his accounting system. The auditor concluded that Respondent did not maintain his trust records in accordance with R. 1:21-6.