When performing an audit for a court in the state of Arizona, auditors use a “Guide for Independent Review” to perform testing over controls and cash receipts, along with cash disbursements. In the most recent update, effective January 1, 2021, new areas for testing have been added. Those areas suspense/hold monies, overpayments and bonds over 90 days.
Hold monies are monies that are used for disbursements, but are held while the court waits for the proper verification to disburse them according to the rules and policies that are set in place by each court. Overpayments are when the court disburses in excess of the amount necessary. Bonds over 90 days are bonds that are over 90 days old, whether that is due to the court date not yet occurring or the final details being sorted.
Suspense/hold monies are tested by reviewing the policies/procedures that are set in place by the court. For example, that could pertain to the court having a separate account that is designed entirely to store held funds until they are cleared for use. Along with the policies and procedures, these disbursements are tested by ensuring the accuracy of the checks and their original receipt to ensure the monies are being disbursed for the correct amount, proper case/parties, and in reference to the proper form of payment.
Overpayments fall into the same boat as hold monies as the disbursements are tested based on the policies/procedures that are set in place by the court. Where the difference comes into play is that once the overpayment reaches a certain threshold, i.e., $25 overpayment, the testing then leads into ensuring the court took the proper steps to correct this error. If the threshold is $25, any overpayment that is over that amount must be refunded.
Lastly, when it comes to bonds over 90 days the testing does not go as in-depth as overpayments, but it still very important to ensure the court has the proper policies/procedures in place to ensure that bonds are not sitting there for an extended period, but instead are being executed properly. For these bonds over the date threshold, the testing is used to see the status of the bond based on court order, the court has taken appropriate action, the bond reviewed has the proper documentation, and those documents have been retained properly.
These guides do not always add new areas of cash receipts/disbursements that need to be tested, so keeping in touch with clients when these changes come about is incredibly crucial to not only the success of the court, but the overall flow of the audit as well. Please contact your Henry+Horne advisor to assist with any issue you may have with the Guide for Independent Review.