What DFPI Examiners Look for in a Single-Branch Escrow Audit
What DFPI examiners look for in a single-branch escrow audit — trust account, records, and the gaps that turn into findings.
An examination is easier to support when the office's accounting and files already explain its actions. Use the examiner's request and current requirements as the scope; this checklist does not predict every finding.
Confirm the reporting baseline
Check that the annual audit report and the Report of Escrow Liability were submitted on time, and retain confirmation. They are separate filings with separate deadlines. Keep regulator correspondence and evidence of responses to prior findings together.
Review the company's capital and bond calculations with its CPA. The surety bond follows statutory liability brackets and branch additions; it does not have to equal all client funds held in trust. Tangible net worth also deducts liabilities, not just intangible assets.
Reconcile the trust-account records
Compare the adjusted bank balance, accounting records and individual file-ledger totals. Raw bank-statement and book balances can differ because of valid reconciling items; identify and resolve those items rather than forcing a match.
Keep dated reconciliation records and review evidence. Age outstanding checks and other unresolved entries, record the investigation and track the next action. Do not rely on an unsourced universal 30-, 60- or 90-day examination threshold.
Follow DFPI's recordkeeping instructions
DFPI publishes Form EL-314, Instructions for Establishing Records and Accounts, on its Escrow Law page. Compare the actual records with the current form and applicable rules.
For sample files, trace receipts and disbursements to the governing instructions, amendments, accounting entries and supporting documents. Make sure the file makes clear which version supported the action.
Review disbursement controls
Check whether staff follow the office's written payment-verification and approval procedures. If the bank provides positive pay, dual authorization or other controls the office uses, retain evidence of configuration and operation.
An independent callback is a useful fraud control. It should not be described as an automatic DFPI finding in every file lacking a particular callback form without a rule or examination-specific basis.
Produce complete, accessible records
Confirm retention and electronic-storage requirements against current DFPI guidance. Check that records can be retrieved and reproduced for an authorized request. Keep confidentiality and access controls in place while making the required material available.
Prepare a sample containing the instruction, evidence reviewed, any unresolved issue, decision and bank confirmation. Preserve superseded documents with clear labels.
Respond to the examination
For each finding, identify the requirement cited, affected records, corrective action, responsible person and due date. If the facts or interpretation are disputed, support the response with evidence and obtain counsel's advice where appropriate.
The goal is a reproducible record of the office's actual work. Software, an internal sign-off or an audit packet alone does not guarantee examination compliance.
Sources
One page in the file before money moves.
Your office decides. Veto records what was reviewed, what stayed open, and who reviewed it.