DCJIS Does Not Reconcile All Revenue Recorded in the iCORI Database

Since DCJIS does not perform reconciliations of all of the revenue recorded in its iCORI database, there is a higher-than-acceptable risk of variances occurring and going undetected.

Overview

Although we found that DCJIS reconciles revenue information received from nCourt and its own spreadsheet containing records of payments from mailed CORI requests to its bank statements, DCJIS does not reconcile the revenue information in its iCORI database to the Massachusetts Management Accounting and Reporting System (MMARS). When we compared all CORI revenue recorded in DCJIS’s iCORI database to what was recorded in MMARS, we found that the revenue in the iCORI database was $22,343 more than the revenue recorded in MMARS.

Because DCJIS does not perform reconciliations of all of the revenue recorded in its iCORI database, there is a higher-than-acceptable risk of variances occurring and going undetected.

Authoritative Guidance

The Office of the Comptroller of the Commonwealth’s “Cash Recognition and Reconciliation Policy,” issued July 1, 2004, requires that all state departments reconcile all received revenue in their internal accounting records to revenue reported in MMARS. It also states,

Daily system assurance must be performed by departments to ensure that there is a matching deposit for each cash transaction. This process involves comparing the results from all sources that produce or contain payments and deposit information, and ensuring that they match. These information sources should include . . . all relevant MMARS tables.

Reasons for Issue

DCJIS does not have policies and procedures that require its employees to perform regular reconciliations of the revenue recorded in its iCORI database to revenue recorded in MMARS.

Recommendations

1. DCJIS should investigate and resolve the $22,343 variance.
2. DCJIS should develop policies and procedures that require its employees to perform regular reconciliations of the revenue recorded in its iCORI database to revenue recorded in MMARS.

Auditee’s Response

The SAO finds that DCJIS does not perform a reconciliation of its CORI revenue. DCJIS strongly disagrees with this finding because it is factually inaccurate. DCJIS regularly reconciles revenue collected in accordance with policies and procedures explained in detail to the SAO in a meeting on June 16, 2022 and in a June 15, 2022 memorandum, “clarification regarding iCORI system.”

In support of the SAO finding, the SAO has pointed to a section of the Office of the Comptroller’s Reconciliation Policy entitled “Reconciliation of Cash Receipts,” which states in relevant part that reconciliation means “comparing the results from all sources that produce or contain payments and deposit information.”

DCJIS simply does not use the iCORI system to reconcile its CORI fees, and so it is an error to refer to a “variance” between fee data in iCORI and MMARS. Instead, DCJIS records and reconciles CORI fees through the nCourt system and through a series of spreadsheets that log this information. To assist the SAO’s audit, DCJIS produced CORI fee information from each of these sources. The reconciliation process used by DCJIS demonstrates that all fees collected have been accounted for and tracked. DCJIS confirmed during the audit with the SAO that the SAO was not concerned that anything is “amiss” pertaining to funds. Rather, the SAO was concerned that iCORI systems were not used to reconcile CORI funds.

DCJIS does not use iCORI to reconcile CORI fees because iCORI was never intended to perform accounting functions. DCJIS respectfully disagrees with the SAO finding that the above quoted language from the Office of the Comptroller requires DCJIS to use iCORI to reconcile CORI fees because it is the original system. The quoted language does not require that the original system be used. More importantly, the iCORI system was not designed to perform accounting functions. Rather, it was designed to receive requests for CORI and to ensure compliance with the CORI laws and regulations when releasing CORI reports.

Even so, DCJIS is grateful for the SAO’s recommendation, and has discussed the feasibility of iCORI system enhancements with its vendor and has included this potential upgrade as part of its [information technology] capital improvement funding request for [fiscal year 2024].

Auditor’s Reply

Although DCJIS may not have designed the iCORI database (which is used for recording CORI requests and generating fees) for reconciliation purposes, it is still the book of original entry² for the fees associated with requesting CORI. We acknowledge that amounts collected in MMARS are reconciled through nCourt and DCJIS’s spreadsheet; however, the existence of the variance between the iCORI database and MMARS was never fully explained but was thought to be a timing issue. If the iCORI database contained all the transaction information that was ultimately transferred to the two other reconciling items, it too should be able to be reconciled to MMARS.

2.    A book of original entry is a book or journal where an organization first records all its transactions.

Date published:	April 13, 2023