Audit Checklist  (Requested Items For Office Audit)

  1.   1. Place of Business Signage
  2.   2. Real Estate Licenses
  3.   3. RECAD Office Policy (*Acknowledgement of policy signed by all licensees.)
  4.   4. Location of closed contracts for past three (3) years
  5.   5. All pending sales files
  6.   6. Location of all lease contracts, management agreements and rental records
  7.   7. Copies of past six (6) months bank statements with canceled checks for all escrow accounts
  8.   8. Copies of latest bank reconciliation performed on all escrow accounts, if available
  9.   9. Checkbook and or computer check register for all escrow accounts
  10. 10. Duplicate deposit tickets with validated bank receipt for all escrow accounts
  11. 11. Any lists or ledgers documenting the funds held for escrow purposes

NOTE: “Escrow Funds” include sales binders, security deposits, rent receipts, and or any other funds held for members of the public.

Office Inspection Suggestions

  • Balance escrow account checkbook as soon as possible after the receipt of each statement.
  • Tape canceled checks back into the checkbook adjacent to the stub so you will have a complete record of the check and not have to search statement envelopes for the check in question.
  • Prepare a continuous list of pending contracts with the amount of earnest money involved. Mark off each transaction as it closes, the money is refunded, or it is forfeited by purchaser or seller.
  • If the bank imposes a service charge, the charge should be deducted from the account before the remainder of the commission is removed to prevent overdraft charges. The Commission has ruled that additional designated funds may be deposited into the account to cover bad checks, service charges, etc.
  • Keep all pending contracts separate from closed contracts.
  • Maintain a separate escrow account for rental or leased property to distinguish it from sales contracts which do not have repairs, owner’s payments, etc.
  • Keep written receipts for all funds received, whether by cash or check, as a means of internal control.