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Future of Guardianship Audits: A Partnership Between Probate, Inspector General and Internal Audit

This article explores the importance of the Inspector General (IG) audit process in protecting the well-being and assets of wards in guardianship cases. It discusses the history of the guardianship administrative order, the policies and procedures for guardianship audits, and the collaboration between the Clerk of the Circuit Court, Inspector General, and Probate Court. The article also provides case studies and red flags to identify potential fraud in guardianship cases.

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Future of Guardianship Audits: A Partnership Between Probate, Inspector General and Internal Audit

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  1. Future of Guardianship Audits: A Partnership Between Probate, Inspector General and Internal Audit

  2. WHY THE IG AUDIT PROCESS?BECAUSE IT IS IN THE BEST INTEREST OF THE WARD +OPPORTUNITY MOTIVE +JUSTIFICATION =FRAUD

  3. IG AUDITS LOOK AT THE WHOLE PICTURE The History Of The Guardianship

  4. Administrative Order No. 2009-036 PA/PI-CIR POLICIES AND PROCEDURES FOR GUARDIANSHIP AUDITS

  5. DIVISION OF INSPECTOR GENERAL GUARDIANSHIP HOTLINE THE INSPECTOR GENERAL’S PRIMARY CONCERN IS THE WELL-BEING OF THE WARDS AND THEIR ASSETS

  6. Clerk of the Circuit Court and Comptroller DIVISION OF INSPECTOR GENERAL • ONE – FULL TIME INSPECTOR GENERAL AUDITOR • REVIEWS PROBATE LEVEL I AUDITS WITH DISCREPANCIES • CONDUCTS IG AUDITS (LEVEL II and III)

  7. PINELLAS COUNTY GUARDIANSHIPCASE LOADS PINELLAS COUNTY RESOURCES DEDICATED TO GUARDIANSHIP CASES (CASE LOADS AND FILINGS VARY BY COUNTY) • 2,500 to 3,000 GDN CASES (APPROXIMATELY) • 35,000 FILINGS ANNUALLY (APPROXIMATELY) • ANNUAL ACCOUNTINGS • FINAL ACCOUNTINGS • TRUST ACCOUNTINGS • INVENTORIES • PLANS • RESPONSES TO ORDERS • FEE PETITIONS (GUARDIANS AND ATTORNEYS) • PETITIONS FOR APPROVAL OF DISBURSEMENTS • HEARINGS (800+) • EXTENSIONS

  8. Clerk of the Circuit Court and ComptrollerProbate Court Records Level I Audits • ONEOFFICE (CLEARWATER COURTHOUSE) • SIX PROBATE AUDITORS • CONDUCT REVIEWS/AUDITS OF ALL GUARDIANSHIP CASE SUBMISSIONS • ESTATES & WILLS • BAKER ACT (MENTAL HEALTH DISORDERS) • MARCHMAN ACT (DRUG AND ALCOHOL ABUSE)

  9. THE CREATION OF THE ORDERS TO DISAPPROVE (LEVEL 1) LISTING DISCREPANCIESALLOWS THE IG TO GET INVOLVED and CONDUCT IG AUDITS ORDER DISAPPROVING THE CASE/COURT FILE AND WORKSHEETS ARE THEN TRANSFERRED TO THE DIVISION OF INSPECTOR GENERAL FOR REVIEW OF THE NOTED DISCREPANCIES AND POTENTIAL IG AUDIT

  10. DIVISION OF INSPECTOR GENERAL CASE REVIEW INITIAL VERIFIED INVENTORY ANNUAL ACCOUNTINGS TRUST ACCOUNTINGS INITIAL GUARDIANSHIP PLAN ANNUAL GUARDIANSHIP PLAN FINAL ACCOUNTINGS

  11. Clerk of the Circuit Court and Comptroller Division of Inspector General IG AUDITS (Level II Audits) IG AUDITS CONSIST OF THE EXAMINATION OF THE ANNUAL ACCOUNTING AND THE VERIFICATION OF SELECTED QUESTIONABLE ITEMSLIMITED INQUIRIES AND/OR REQUESTS FOR SUPPORTING DOCUMENTATIONAN IG AUDITCAN ALSO BE INITIATED WITH A REQUESTFROM THE COURT

  12. *CASE STUDIES *Facts changed to protect the confidentiality of the sealed records

  13. *CASE STUDIES *Facts changed to protect the confidentiality of the sealed records • Sister - GDN for Brother • Dental Bills • $300,000, Promissory Note • Mother - GDN for Son and Daughter • Annual Accounting Filed Late • Bank Statements Did Not Reconcile • $250,000 Repaid In Cash • Mother - GDN for Son • Bank Released Funds Without Court Order • Restricted Account (Major Bank) • $85,000 GDN Repaid In Cash • $45,000 Repaid by Bank • Mother - GDN for Daughter • ATM Withdrawals (Casino) • $6,500 Repaid in Cash • Sister - GDN for Sister • Motor Home/Disney Cruise (Ward feared hotel rooms) • Sold Motor Home

  14. *CASE STUDIES *Facts changed to protect confidentiality of the sealed records • GDN Attorney • $400,000 In Trust Account • 25 Months • Moved $400,000 And Paid Lost Interest • Professional GDN • No IRS Form 1099 or W-2 Provided • IRS Investigation • Professional GDN • Successor GDN Noted Checks Written To GDN And Called GDN Hotline • Bond & Estate Paid $8,500

  15. METHODS USED TO CONCEAL FRAUD • ALTERED CHECKS • ALTERED INVOICES (MANUFACTURED) • DENTAL BILLS • HOSPITAL INVOICES • ALTERED RECEIPTS (MANUFACTURED) • MANUFACTURED BROKERAGE STATEMENTS • NO RECORDS PROVIDED • DELAYING TACTICS

  16. DO YOU SEE ANY PROBLEMS WITH THESE CHECKS?

  17. What Some Guardians Buy • Cars • Houses • Motor Homes • Entertainment • Dinners • Movies • Gambling • Computers • Vacations • Anything They Want

  18. THE MONEY SHOULD HAVE BEEN GIVEN TO ME! I HAVE NO INTENTIONS OF PAYING IT BACK! REIMBURSED GUARDIANSHIP $70,000

  19. REIMBURSED GUARDIANSHIP $250,000 PLEADED GUILTY FINED $650 (ALL COSTS) TWO YEARS PROBATION State Attorney Charged Guardian (MOM) with Two Counts of PERJURY BY FALSE DECLARATION CRC0921439CFANO

  20. REDFLAGS • MISSING DOCUMENTS • TAKES TOO LONG TO PROVIDE DOCUMENTS • INCOMPLETE DOCUMENTS • DIFFERENT FORMATTED INVOICES FROM THE SAME PROVIDER/VENDOR • LARGE EXPENDITURES FOR VACATIONS • UNUSUAL TRANSACTIONS/PATTERNS • GUT FEELING

  21. REDFLAGS LACK OF BUDGETS WHEN MULTIPLE PEOPLE LIVING WITH WARD • Payment Of Housing Expense Not Prorated Based On Number In Household • Food Cost Not Prorated Among Members In Household • Expenses Exceed Approved Court Budget Or No Budget

  22. Cooperative Effort Between Inspector General, Clerk’s Probate Guardianship Section, And Sixth Judicial Circuit To Protect The Wards And Their Assets Guardianship Statistics Over The Past Four Years

  23. Cooperative Effort Between Inspector General, Clerk’s Probate Guardianship Section, And Sixth Judicial CircuitTo Protect The Wards And Their Assets Guardianship Statistics Over The Past Four Years • Identified An Average Of $1.8 Million In Questionable Expenditures/Actions Annually • Average 100Opportunities For Improvement Annually • Containing An Average Of 130 RecommendationsAnnually • An Average Of Two Guardians Removed Annually • In The Last Three Years Two Guardians Convicted • Average Amount Of Property Recovered $125,000 Annually (Reimbursement/Judgments/Bonds)

  24. Ethics

  25. Ethics • A commitment to doing what is right and honorable. • The setting of high personal standards for ourselves in all aspects of our lives – at work, at home, and in service to our profession. • Right vs. Wrong?

  26. Ethical Behavior “The term, ethical behavior, refers to how an organization ensures that all its decisions, actions, and stakeholder interactions conform to the organization’s moral and professional principles. These principles should support all applicable laws and regulations and are the foundation for the organization’s culture and values. They define “right” from “wrong” behavior.” National Malcolm Baldridge Quality Award

  27. What is a Code of Ethics? • Sets expectations for conduct in our profession • Articulates ideals to which we aspire • Professes behaviors that are mandatory • Assists in making wise decisions in the best interest of the organization

  28. Source of Ethical Standards • Laws • Rules • Regulations • Policies • Professional Standards • Religious Beliefs • Other

  29. Teaching of Ethics • Can one teach someone to be ethical? • No, it is either in one’s self or it is not. • Can one teach someone what is ethical behavior? • Yes, it is a system of values or principles for actions.

  30. Ethics Laws &Other Governing Directives • Generally apply to all government employees: • Elected Officials • Appointed Officials • Codes of Conduct (Policies and Procedures) • Professional Standards • Financial Disclosure • Gifts Prohibited

  31. Conflicts of Interest • We require ourselves and others to disclose any real or potential conflicts of interest to the appropriate parties. • We refrain from engaging in the decision making process or otherwise attempting to influence outcomes unless or until we have made FULL disclosure to the affected parties and obtain consent to proceed.

  32. How to Establish anEthical Environment • Communication is key to an ethical environment • Everyone must realize that ethical behavior: • is expected • will be rewarded • is everyone’s responsibility

  33. Conflicts of Interest • A conflict of interest may occur if a member performs a professional service for a client or employer and the member or his or her firm has a relationship with another person, entity, product, or service that could, in the member’s professional judgment, be viewed by the client, employer, or other appropriate parties as impairing the member’s objectivity. • Source: AICPA ET s. 102.01 Section 102

  34. Examples of Conflicts of Interest • GDNs bidding on and purchasing Ward’s property • Probate Staff bidding on and purchasing Ward’s property • IG Staff bidding on and purchasing Ward’s property • Friends and/or family of GDNs, Probate Staff, and/or IG staff bidding on and purchasing Ward’s property • Friends and/or family hired by GDNs and providing services to the Ward

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