Tuesday letters: Trust funds need objective review

September 24, 2013 

John Monk’s Sept. 15 article, “When S.C. lawyers steal, clients’ safety net is thin,” was right on target regarding lawyers who have larceny in their hearts when it comes to clients’ money. We in South Carolina, as well as throughout the United States, have had numerous thefts (not counting those that were not discovered) from the so-called “trust fund” bank accounts that attorneys use to escrow and hold client-related monies.

My first CPA boss, some 40 years back, always told me, “people do what you inspect, not what you expect.” Record keeping and internal controls have gone through many evolutionary changes since then, but this basic rule has not changed.

These trust funds should be reviewed by an unbiased third party, most likely an independent certified public accountant. The S.C. Bar would decide the scope, timing and materiality level of the procedures to be performed. The results would be reported to the Bar and the affected attorney. Unannounced audits should be conducted at least once every three years, with the cost borne entirely by the attorney.

John F. Hamilton

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