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U.S. Trustee Program Suspends Debtor Audits
U.S. Trustee Program Suspends Debtor Audits
The U.S. Trustee Program last month said it has "indefinitely suspended"
the debtor auditing process "due to budgetary constraints," the Wall
Street Journal reported yesterday. The Bankruptcy Code amendments of
2005 authorized U.S. trustees to randomly designate for audit one out of
every 250 consumer bankruptcy cases per federal judicial district. The
Code also authorized audits of any cases in which debtors posted
statistically unusual income or expenditures. Trustees select the cases
but do not perform the audits; instead, that job falls to independent
accountants. The 2007 fiscal year saw random audits of "at least one out
of every 250 consumer cases" per judicial district, according to a USTP
report. But the following three fiscal years saw that rate reduced to
one out every 1,000 consumer cases per district due to "budgetary
constraints." The auditing rate was reduced even further in the 2011
fiscal year to one out of every 1,700 cases, but the audits were
suspended for the last few months of that year and through the first
three months of the 2012 fiscal year. While USTP resumed random audits
between January and October 2012, it did so for one out of every 1,450
consumer case per district.
*** PLEASE NOTE FIRM NAME AND EMAIL ADDRESS CHANGES BELOW ***
M. Erik Clark
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
www.blclaw.com
Office: (626) 332-8600
Fax: (626) 332-8644
Board Certified in Consumer Bankruptcy
American Board of Certification
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