Audit faults magistrates’ bond-deposit practices

Jan. 31, 2013 @ 05:59 PM

DURHAM – A recent report from state auditors on courthouse operations in Durham found that magistrates aren’t always making daily deposits of the cash they handle, as state law and policy demand.

Examiners studying logs of the work the magistrates did between Nov. 1, 2011, and Oct. 31, 2012, found that about 23 percent of their transactions with the county clerk of court’s office were late.

The late transactions involved $357,240 in receipts – including one for $250 that a magistrate was 29 days behind in depositing.

State Auditor Beth Wood’s staff recommended that Clerk of Court Archie Smith “strengthen controls over magistrates’ receipts to ensure that all funds collected” are handed over to his cashiers on time.

Smith’s formal response to the audit acknowledged there had been delays and said they came because “of the need for security in the form of armed escort” by Durham County Sheriff’s Office deputies.

“Magistrates have not made daily deposits when such armed escort has not been available,” he told auditors.

He added that though court clerks “do not have statutory authority” over the magistrates or the sheriff’s office, he had weighed in “with those persons most involved” and “trust[s] that daily deposits will be made.”

Interviewed Thursday, Smith said Chief Magistrate Don Paschall and his staff had “been informed of this deficiency,” and that Paschall had assured him there would be no further delays.

He couldn’t speak to whether the magistrates had ironed out any security concerns.

But “if the chief magistrate is satisfied with his present ability to comply with the requirements of the statute, then I would suspect the security issues have likewise been complied with,” Smith said.

Sheriff’s Office Chief Deputy Don Ladd, however, said Thursday he hadn’t seen the audit and had no comment on its findings.

“We provide that [armed escort] when they call and ask for it,” Ladd said of the magistrates. “As far as it being a daily thing, I couldn’t tell you. But we do provide that security when requested.”

Magistrate often take in and handle cash when prisoners post bonds to get out of jail. Their office is a 24/7 operation, whereas the clerk of court’s office like the rest of the courthouse operation is only open Monday through Friday 8:30 a.m. to 5 p.m., Smith said.

The clerks handle a much larger amount of money, and Smith was pleased that auditors found no problems there.

The clerk’s office as of Oct. 31 had $1.3 million in cash deposited with private banks. It also was holding another $4 million in trust accounts for things like estate settlements, and $703,440 from cash bonds.

Smith said his 74-person staff handled more than $17 million in calendar 2012.

“There was no finding as to any disparities in the efficient and proficient handling of those funds, or any other aspect of our operation,” he said of the audit.

The auditors did, however, ask Smith to reduce from four the number of people in his office who had computer passwords allowing them to both access its business records and to update case information in a statewide criminal-infractions database.

The problem in theory could open the door to criminal citations being “inappropriately waived,” or even the “possible misappropriation of funds, the auditors said, adding that access to the two systems should be kept separate even at risk of inefficiency.

Smith told the auditors that he’d “resolved” the problem by removing “incompatible access rights.”