Overview
In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of the Land Court Department (LCD) for the period July 1, 2019 through June 30, 2021.
We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Below is a list of our audit objectives, indicating each question we intended our audit to answer, the conclusion we reached regarding each objective, and where each objective is discussed in the audit findings.
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Objective |
Conclusion |
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Does LCD administer escrow funds in accordance with Sections 1.9, 3.2.3, and 3.9 of the Executive Office of the Trial Court’s (EOTC’s) Fiscal Systems Manual and Section 6 of Chapter 200A of the General Laws? |
No; see Finding 2 |
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Does LCD oversee its partition commissioners in accordance with Section 12 of Chapter 241 of the General Laws and Sections 1–4, 5d, 6, and 7 of Rule 1:07 of the Massachusetts Rules and Orders of the Supreme Judicial Court? |
To accomplish our objectives, we gained an understanding of LCD’s internal control environment related to the objectives by reviewing applicable department policies and procedures, as well as conducting interviews with LCD management. We tested the operating effectiveness of controls over escrow accounts and assessed whether they operated as intended during the audit period.
To obtain sufficient, appropriate audit evidence to address our audit objectives, we conducted further audit testing as follows.
Escrow
We performed the following tests for the establishment of escrow accounts, disbursement from escrow accounts, and abandonment of property.
- We identified a total population of 10 escrow accounts established during the audit period. To determine whether LCD established escrow accounts in accordance with EOTC’s Fiscal Systems Manual, we inspected all 10 docket entries to determine the types of accounts that were to be opened, determine whether bank statements or passbooks7 were on file, determine whether bank accounts were established, verify bank account numbers, and ensure that the real estate stakeholders linked to the accounts were recorded in MassCourts.
- We identified the total population of 30 escrow account disbursements made during the audit period in accordance with EOTC’s Fiscal Systems Manual. To determine whether LCD escrow account disbursements were properly recorded in MassCourts, we inspected all 30 escrow account disbursements for dates and check numbers and verified that the interest received was recorded in MassCourts periodically by the head account clerk. We compared disbursement amounts from escrow accounts on the MassCourts docket list to the amounts on the disbursement checks and recalculated balances remaining after partial disbursements were made. We confirmed that disbursement checks were signed and authorized by the recorder or deputy recorder and that the head account clerk obtained W-9s for the real estate stakeholders before disbursement.
- We identified seven accounts that qualified as abandoned during the audit period. To determine whether LCD sent unclaimed escrow funds to the Office of the State Treasurer’s Unclaimed Property Division (UPD), we inspected all seven abandoned escrow accounts to verify that funds were sent to UPD three years after the cases associated with the accounts were closed. For each account, we inspected the transmittal letter, as well as the letter of notification sent to the real estate stakeholders before the abandonment was finalized, to determine whether the stakeholders were notified no less than 60 days before the scheduled abandonment date.
Partition Commissioner List
We tested LCD’s oversight of its partition commissioners as follows.
- We identified a total population of 58 appointments from the audit period and divided the population into two strata because LCD updated its method of tracking partition commissioner appointments in March 2020. The first stratum had a population of 24 appointments for the period July 1, 2019 through March 1, 2020. The second stratum had a population of 34 appointments for the period March 2, 2020 through June 30, 2021.
- We inspected a nonstatistical, random sample of 10 of the 24 partition commissioner appointments in the first stratum and tested all 34 of the appointments in the second stratum. From these two samples, which together totaled 44 appointments, we verified that LCD made successive appointments by obtaining the emails that session clerks sent to determine whether the next partition commissioners on the list were selected. We inspected court orders to verify that each one was signed by the judge and deputy recorder to appoint a partition commissioner. We inspected MassCourts records and/or LCD hardcopy files to confirm that each partition commissioner had a notarized “Commissioner Oath” on file. We verified that LCD received signed partition commissioner reports detailing activities and expenses for each partition case from the assigned partition commissioners. We confirmed that each payment of fees to a partition commissioner was approved by court order after the partition commissioner’s report had been submitted to LCD.
We used nonstatistical sampling methods and therefore could not project the results of our testing to the population.
Data Reliability
Escrow Spreadsheet
We received a complete list of escrow accounts established, disbursed, and abandoned during our audit period from the LCD head account clerk in a Microsoft Excel spreadsheet with multiple tabs. We inspected the tabs, which were broken down by type of account. The “Escrow Master” tab listed 23 established internal and external escrow accounts. Citizens Bank had a population of 15 records, People’s United Bank had a population of 7 records, and Bank of America had a population of 1 record. The “Escrow Disbursements” tab listed 31 disbursements from escrow accounts. We inspected the population of records from the three banks LCD used, and we identified the escrow accounts that were abandoned and sent to UPD during the audit period.
To determine the reliability of the data, we compared LCD records to MassCourts to ensure the accuracy and completeness of the data on the tabs. We inspected the tabs for hidden rows and columns. We also identified the population of records on each tab and traced the case numbers, receipt numbers, and dollar amounts back to MassCourts for all records on all tabs.
We determined that the spreadsheet provided was sufficiently reliable for our purposes.
Partition Commissioner Spreadsheet
We received from the LCD deputy recorder a digital copy (a Microsoft Excel spreadsheet) of the master list of partition commissioners available for public inspection in LCD’s main office. The list had two tabs: “Master List” and “Other.” The “Master List” tab listed all partition commissioners who were active during the audit period; the “Other” tab listed retired, deceased, and inactive partition commissioners. This Excel master list is maintained by the LCD office manager on a shared drive on LCD’s system.
To determine the reliability of the data, we inspected the document for hidden rows and columns. We traced the names of all the partition commissioners, and the case numbers, from all 232 appointments on this master list to MassCourts to ensure the accuracy and completeness of the data. We compared LCD’s organization chart to the list of session clerks who had access and editing rights to determine which specific LCD employees had access.
We determined that the data were sufficiently reliable for our purposes.
| Date published: | March 31, 2022 |
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