4-4.1 GENERALLY

Audits are the starting point for determining the adequacy of a standing trustee's financial management, internal control procedures, and organizational support and are part of the annual evaluation process. A chapter 13 standing trustee shall receive a full scope audit annually. A chapter 12 standing trustee shall receive either a full scope audit, an Accelerated Limited Scope (ALS) audit, or an office visit annually.

4-4.2 CHAPTER 13 STANDING TRUSTEES

A chapter 13 standing trustee shall receive an audit annually by an independent accounting firm. The audit is designed to determine the adequacy of both internal controls over estate monies and performance in case administration.

4-4.2.1 Exit Conferences and Follow Up

At the completion of the audit, the United States Trustee shall participate in the exit conference to determine any appropriate remedial action. Within 45 days of the date of the written audit report, the standing trustee must submit a written statement confirming that corrective action has been taken on noted deficiencies and changes implemented. Whenever an audit report contains a consequential finding or a series of less consequential findings, the United States Trustee shall, within three months of the standing trustee's response, make an on-site visit to the standing trustee's office to verify compliance. For a compendium of consequential findings or a series of less consequential findings, see Appendix 4-3. Failure to implement necessary changes shall result in appropriate remedial action by the United States Trustee. A copy of the standing trustee's response to the audit shall be sent to the Assistant Director for Review and Oversight, accompanied by a written verification by the United States Trustee that deficiencies noted in the audit have been resolved and changes implemented. The resolution of audit findings shall be completed within six months of the audit, but no later than August 1.

4-4.2.2 Office Visits

Office visits for a chapter 13 standing trustee are to be used when deemed appropriate. The scope of the office visit is a limited review and shall be directed to any area that a trustee's file or performance indicates may be appropriate.

4-4.3 CHAPTER 12 STANDING TRUSTEES

A chapter 12 standing trustee shall receive a full scope audit, conducted by the Office of the Inspector General, every third year, unless there is a compelling justification to omit the audit or schedule an audit more frequently. In those years in which a chapter 12 standing trustee does not receive a full scope audit, the standing trustee shall receive either an Accelerated Limited Scope (ALS) audit or an office visit, as determined by the United States Trustee.

4-4.3.1 Independent (OIG) Audits

The independent audit is designed to determine the adequacy of both internal controls over estate monies and performance in case administration. In selecting chapter 12 trustees to be audited, consideration is to be given to the adequacy of reports, caseload, amount of estate funds under a standing trustee's control, previous unsatisfactory audit findings, and any recent deficiencies.

4-4.3.1.1 Exit Conference and Follow Up

The United States Trustee shall participate in the exit conference to determine the appropriate remedial action necessary. Within 45 days of the date of the written audit report, the standing trustee must submit a written statement confirming that corrective action has been taken on noted deficiencies and changes implemented. Whenever an audit report contains a consequential finding or a series of less consequential findings, the United States Trustee shall, within three months of the standing trustee's response, make an on-site visit to the standing trustee's office to verify compliance. Failure to implement necessary changes shall result in appropriate remedial action by the United States Trustee. A copy of the standing trustee's response to the audit shall be sent to the Assistant Director for Review and Oversight and to the Inspector General, accompanied by a written verification by the United States Trustee that deficiencies noted in the audit have been resolved and changes implemented. The resolution of an audit must be completed within six months of the audit, but no later than November 1.

4-4.3.2 Accelerated Limited Scope (ALS) Audits

An accelerated limited scope (ALS) audit is generally conducted by the standing trustee coordinator, with assistance from an attorney, consistent with Appendix 4-4. A written report of the audit is to be submitted to the United States Trustee. Written notice of deficiencies and required changes, with deadlines for implementation, is to be provided to the standing trustee. A chapter 12 standing trustee must submit a written response within 45 days. Whenever an ALS audit notes a consequential deficiency or a series of lesser deficiencies, the United States Trustee shall visit the standing trustee's office to verify compliance within three months of the standing trustee's response. The ALS audit report, along with the standing trustee's response, is to be maintained in the trustee's file. Failure to correct noted deficiencies or to meet deadlines set forth in the notice shall result in appropriate remedial action by the United States Trustee. Deficiencies or a determination of partial remedies must be conveyed to the standing trustee. A copy of the standing trustee's response to the ALS audit shall be sent to the Assistant Director for Review and Oversight, accompanied by a written verification by the United States Trustee that deficiencies noted in the audit have been resolved and changes implemented.

4-4.3.3 Office Visits

The United States Trustee must make an office visit to each chapter 12 standing trustee who is not receiving either a full scope or limited scope audit. The scope of the office visit is a limited review and shall be directed to any area that a trustee's file or performance indicates may be appropriate. Any deficiencies or inadequacies are to be documented and the standing trustee required to make a written response within a specific time confirming that corrective actions have been implemented. A copy of the standing trustee's response shall be sent to the Assistant Director for Review and Oversight, accompanied by a written verification by the United States Trustee that the deficiencies noted in the review have been resolved and changes implemented. Failure to make the necessary changes shall result in appropriate remedial action by the United States Trustee. The report of the office visit is to be maintained in the appropriate file.