Future of Guardianship Audits:

A Partnership Between Probate, Inspector General and Internal Audit

MOTIVE ++ OPPORTUNITYOPPORTUNITY

+ + JUSTIFICATIONJUSTIFICATION

== FRAUDFRAUD

WHY THE IG AUDIT PROCESS?BECAUSE IT IS IN THE BEST INTEREST OF THE WARD

IG AUDITS LOOK AT THE WHOLE PICTURE

The History Of The Guardianship

Administrative Order No. 2009-036 PA/PI-CIR

POLICIES AND PROCEDURES FOR GUARDIANSHIP AUDITS

DIVISION OF

INSPECTOR

GENERAL

GUARDIANSHIP

HOTLINE

THE INSPECTOR GENERAL’S PRIMARY CONCERN IS THE WELL-BEING OF THE WARDS AND THEIR ASSETS

• ONE – FULL TIME INSPECTOR GENERAL AUDITOR

• REVIEWS PROBATE LEVEL I AUDITS WITH DISCREPANCIES

• CONDUCTS IG AUDITS (LEVEL II and III)

Clerk of the Circuit Court and Comptroller DIVISION OF INSPECTOR GENERAL

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

• ONE OFFICE (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)

Clerk of the Circuit Court and Comptroller Probate Court Records

Level I Audits

ORDER DISAPPROVING

THE CREATION OF THE ORDERS TO

DISAPPROVE (LEVEL 1) LISTING DISCREPANCIES

ALLOWS THE IG TO GET INVOLVED and

CONDUCT IG AUDITS

THE CASE/COURT FILE AND WORKSHEETS ARE THEN TRANSFERRED TO THE

DIVISION OF INSPECTOR GENERAL FOR REVIEW OF THE NOTED DISCREPANCIES

ANDPOTENTIAL IG AUDIT

INITIAL VERIFIED INVENTORY

ANNUAL ACCOUNTINGS

ANNUAL GUARDIANSHIP PLAN

TRUST ACCOUNTINGS

INITIAL GUARDIANSHIP PLAN

FINAL ACCOUNTINGS

DIVISION OF INSPECTOR GENERALCASE REVIEW

IG AUDITS CONSIST OF THE EXAMINATION OF THE ANNUAL ACCOUNTING AND THE

VERIFICATION OF SELECTED QUESTIONABLE ITEMS

LIMITED INQUIRIES AND/OR REQUESTS FOR SUPPORTING DOCUMENTATION

AN IG AUDITCAN ALSO BE INITIATED

WITH A REQUESTFROM THE COURT

Clerk of the Circuit Court and Comptroller Division of Inspector GeneralIG AUDITS (Level II Audits)

*CASE STUDIES*Facts changed to protect the

confidentiality of the sealed records

*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

• 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

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

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

DO YOU SEE ANY PROBLEMS WITH THESE CHECKS?

What Some Guardians Buy• Cars• Houses• Motor Homes• Entertainment

– Dinners– Movies

• Gambling • Computers• Vacations• Anything They Want

THE MONEY SHOULD HAVE BEEN GIVEN TO ME!

I HAVE NO INTENTIONS OF PAYING IT BACK!

REIMBURSED GUARDIANSHIP

$70,000

PLEADED GUILTY

FINED $650 (ALL COSTS)

TWO YEARS PROBATION

State Attorney Charged Guardian (MOM) with Two Counts of

PERJURY BY FALSE DECLARATIONCRC0921439CFANO

REIMBURSED GUARDIANSHIP $250,000

RED FLAGS

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

• 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

RED FLAGSLACK OF BUDGETS WHEN

MULTIPLE PEOPLE LIVING WITH WARD

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

Year

Level 1Reviews

IG Audit Reports(Level II & III)

GDNHotline Calls

2010 601 62 82

2011 623 54 133

2012 720 60 116

2013 662 66 89

– Identified An Average Of $1.8 Million In Questionable Expenditures/Actions Annually

– Average 100 Opportunities For Improvement Annually

– Containing An Average Of 130 Recommendations Annually

– 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)

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

Ethics

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?

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

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

Source of Ethical Standards

• Laws

• Rules

• Regulations

• Policies

• Professional Standards

• Religious Beliefs

• Other

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.

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

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.

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

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

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