Missouri State Auditor Susan Montee found a laundry list of unidentified funds in an audit of the 22nd Judicial Circuit, released on Tuesday.
Circuit Clerk Mariano Favazza’s office has $7.6 million in old bank accounts and investments, which generates 1.8 percent in interest every year. About $2.5 million of that interest has gone to the City of St. Louis’ general fund, Favazza said.
Under state law, if Favazza cannot find the rightful owners of the funds, he should “dispose” of the funds, or hand them over to the state treasurer, and close the accounts.
“Maintaining old inactive accounts increases the risk of theft and misuse of funds and deprives the state, city, and others the use of those monies,” Montee stated in the audit.
However, Favazza said that the money would just go into state revenue and away from the money’s local owners.
In addition, the City of St. Louis would not receive interest revenue if the funds were released to the state. On June 17, Favazza said he wrote City Budget Director Paul Payne a check for $250,000, and he meets annually with Payne to let him know how much revenue the city can expect from the clerk.
“That pays for essential city services,” Favazza said.
Favazza started the Justice Information System Account in 1996, which is used for all case fees, bonds, restitution, etc., unless a judge orders monies held in a special court ordered bank account, the audit states.
Out of $6.4 million in the account, $214,264 are unidentified child support monies that never made it to the proper families.
In response, Favazza said that the child support money was collected prior to the time he came to office in January 1999.
“Due to manpower issues, we continue to first work cases where we have the highest probability of returning the funds to its true owner,” the auditee’s response states in the audit.
Montee states that the circuit clerk only had one contract employee who exclusively worked to identify and reduce the liabilities of these accounts until the end of 2008. Now the office only has one person who spends a portion of work time on the old accounts.
Montee also said that miscommunication between the judges and the circuit clerk’s office can lead to money never reaching its owners.
Montee found 16 cases totaling $1,551,786 of old court-ordered accounts. Some had no activity for more than 10 years, and the clerk’s office personnel said they have not contacted the judge or attorney about the money.
According to the audit, the clerk’s office said that a court order must be issued directing the office how to disburse monies, and Presiding Judge David Dowd indicated the Court En Banc is not notified of these cases.
Also in the audit, some bonds were not properly authorized or properly documented in the Pre-trial Release office, which helps the judges determine bonds for defendants. The office collects $175,000 a year in cash bonds and more in surety bonds.
After reviewing 11 bonds, Montee determined at all of the errors related to one bond company. The audit states that the Presiding Judge formed a committee to review the office procedures. Dowd also asked law enforcement to investigate any possible wrong doing and requested the Missouri Department of Insurance investigate the bond company and any agents acting on its behalf.