Clerk’s office blames COVID after NC audit finds Mecklenburg estates mishandled
North Carolina auditors have cited the Mecklenburg Clerk of Court’s Office for failing to properly safeguard dozens of estates, opening up the beneficiaries to the threat of fraud or misappropriation, according to a report released Monday.
Clerk of Court Elisa Chinn-Gary accepted the findings but blamed the violations on a pandemic-driven employee exodus from her office, which she says cost her the entire estate staff.
”The findings reveal the crippling dilemma the Clerk’s Office faced when one-third of its workforce resigned or retired during the height of the COVID pandemic,” Chinn-Gary said in a July 1 letter to state Auditor Beth Wood.
Efforts to hire and train replacements, according to the clerk, “were frustrated by frequent COVID outbreaks, resulting in employee quarantines, hospitalizations and in the most severe cases, employee deaths.”
In an email to The Charlotte Observer on Monday, Chinn-Gary declined further comment.
Chinn-Gary’s operation is the largest in the Mecklenburg County Courthouse. Given how many of its tasks deal directly with the public, the staff was the hardest hit by COVID-19, resulting in long delays of trials and other office tasks.
Violations found
While its operations are mostly in the background, the clerk’s office serves as the control center for most of the courthouse, and it handles an extraordinary amount of money.
According to state report, the Mecklenburg clerk’s office collected almost $85.4 million in cash during the audit period, which ran from July 2021 through February 2022. State auditors say they examined another $15 million in estate guardian bonds collected by the office on 65 filed estates.
In all, Wood’s staff reviewed the office’s handling of almost $106 million. They found two violations — both involving estates.
Under state law, estates must file inventories of assets within three months of the appointment of the estate’s representative. In almost half the sampling of estates reviewed by auditors, the inventories either arrived late or the clerk’s office failed to file written requests requiring the filings, the audit found.
According to the report, the lack of inventory eliminates an important safeguard against unauthorized transactions such as “the removal of estate assets without the knowledge of the qualified heirs.” It can also delay the finalization of estate for family heirs.
The report says the auditors found similar problems with internal controls regarding estates controlled by guardians, who legally represent minors and incapacitated adults.
In almost 40% of the estates reviewed, the clerk’s office failed to compel the filing of an inventory, which kept the the office from calculating and collecting sufficient bonds from the guardian to protect the wards.
In more than a third of the estates audited, no inventory was filed, the report says. N.C. law requires guardian bonds equal to 110-125% of the ward’s personal property depending on the size of the estate.
Clerk: Estate openings filled
In both violations, Chinn-Gary said the large caseload left by the pandemic led her staffers to work with the personal representatives and guardians of the estates “at the initial phase of the estate process.” They did not guarantee that inventories had been filed on time or sufficient bonds purchased, she said.
In her letter to Wood, Chinn-Gary said all the vacancies in her office’s estate division have been filled and the new staff trained.
She said her office staff is working overtime each week to reduce the backlog of estate cases while properly handling the new arrivals.
Chinn-Gary, who will start her third four-year term in December, also said she is hoping that new clerk positions approved by the legislature will be assigned to her office. If they are, they will “concentrate specifically” on the areas cited in the audit.
In both violations, the state said Chinn-Gary’s office should have plans in place to meet its statutory obligations should it again be hit by personnel shortages and increasing caseloads.
