Audit of the Southeast Housing Court Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Southeast Housing Court.

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 Southeast Housing Court (SEHC) for the period July 1, 2017 through March 31, 2019.

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 and the conclusion we reached regarding each objective.

Objective	Conclusion
Does SEHC reconcile cash receipts in accordance with Sections 1, 2, and 41 of the Trial Court’s Fiscal Systems Manual?	Yes
Does SEHC adhere to the time standards in Section VI of the Housing Court’s Standing Order 1-04 and Sections 2(c), 6, 7(a), and 7(b) of the Trial Court’s Rule I: Uniform Summary Process Rules?	Yes

 

To achieve our objectives, we gained an understanding of the internal controls related to our audit objectives by reviewing applicable laws and agency policies and procedures, as well as conducting interviews with SEHC management. Further, we evaluated the design and tested the operating effectiveness of controls over the reconciliation of cash receipts and adherence to time standards for processing court cases.

Data Reliability

To ensure the reliability of the evidence we obtained, and to determine whether the population was accurate and complete, we selected a judgmental sample of 20 hardcopy case file docket numbers and traced them to the case file docket number list that the state Administrative Office of the Housing Court provided to us. We then judgmentally selected an additional 20 case file docket numbers from that list and determined whether they matched the hardcopy case file docket numbers.

Based on the results of these assessment procedures, we determined that the information obtained for our audit period was sufficiently reliable and complete for the purposes of our audit work.

We used statistical random sampling for our substantive testing, but we will not project our results to the entire population.

Reconciliation of Cash Receipts

We obtained a list of all case file docket numbers from the state Administrative Office of the Housing Court for our audit period and selected a random statistical sample of 24 summary process case files from a population of 7,244, using a 90% confidence level and a 10% tolerable error rate. We reviewed the cash receipts in the case files, which totaled $1,755, and traced those receipts through the entire reconciliation process. We determined whether the cashier and bookkeeper were different employees to ensure segregation of duties. We traced the docket receipts to determine whether they matched the bank deposit slips for the same day and whether deposit verifications were conducted twice a week. We then traced the receipts to the Final Receipt Listing Report² to verify that they matched. We reviewed the daily cash sheets to determine whether they accurately represented cash, credit card, or check amounts; were verified by a second person; and were completed by 2:00 p.m. or the close of the business day. We determined whether all required reconciliation forms were completed by the 15th of the following month, were retained, were accurate, and were submitted to the Office of Court Management’s Fiscal Affairs Department. We reviewed the bank statement ending balances to determine whether they matched the beginning balances on the State Treasurer Activity Report.³ Finally, we determined whether SEHC disbursed all funds received to the Office of Court Management’s Fiscal Affairs Department at the end of each month.

Adherence to Time Standards

We obtained a list of all case file docket numbers from the state Administrative Office of the Housing Court for our audit period and selected a random statistical sample of 24 summary process case files from a population of 7,244, using a 90% confidence level and a 10% tolerable error rate. We reviewed each case file and determined what date each entry was filed and whether a continuance of each case was needed or rescheduled. We reviewed each case and determined whether a request for discovery of evidence was filed, responded to, and served within recommended timeframes. We verified that if a motion to strike the discovery of evidence was made, a trial date was moved. We determined whether non-jury and jury trials were scheduled appropriately and whether any counterclaims were issued and completed within required timeframes.

1.    Section 1 of the Fiscal Systems Manual is titled “Docketing and Receipting Funds,” Section 2 is titled “End of Day Closing Procedures,” and Section 4 is titled “Monthly Closing Procedures.”

2.    A Final Receipt Listing Report is required by Section 2 of the Trial Court’s Fiscal Systems Manual. It is a daily report stating the total funds received as of the end of each day.

3.    A State Treasurer Activity Report is required by Section 4 of the Trial Court’s Fiscal Systems Manual. It details beginning and ending cash deposit amounts and is compiled monthly by each division of the Housing Court as part of the receipt reconciliation process.

Date published:	March 12, 2020