NCSB Journal Spring 2026

BAR UPDATES

2025 Fourth Quarter Random Audits

Audits for the fourth quarter were con ducted in Cabarrus, Caldwell, Chatham, Cleveland, Forsyth, Gaston, Guilford, Har nett, Haywood, Jackson, Johnston, Lincoln, Mecklenburg, Orange, Person, Surry, Union, and Wake Counties. One audit each was conducted in Cabar rus, Caldwell, Chatham, Haywood, Jackson, Johnston, Lincoln, Person, and Surry coun ties. two audits each were conducted in Cleve land, Forsyth, and Gaston counties. Three audits each were conducted in Guilford, Har nett, and Union counties. Four audits were conducted in Orange County. Five audits were conducted in Mecklenburg County. Nine audits were conducted in Wake County.

Following are the results of the audits. 1. 41% failed to provide a copy of the Bank Directive regarding checks presented against insufficient funds. 2. 33% failed to take the required one hour trust account CLE course. 3. 16% failed to; • complete quarterly transaction reviews; • maintain images of cleared checks or maintain them in the required format. 4. 13% failed to sign, date, and/or main tain reconciliation reports. 5. 11% failed to properly identify client on confirmations of wire/electronic/online transfers of funds. 6. up to 10% failed to; • review bank statements and cancelled checks each month; • prevent over-disbursing funds from the trust account resulting in negative client bal ances; • failed to identify the client and source of funds, when the source was not the client, on the original deposit slip; • identify the client from whose balance the funds were drawn on the face of each check; • escheat unidentified/abandoned funds as required by GS 116B- 53. 7. Areas of consistent rule compliance; • properly completed monthly reconcilia tions; • properly completed quarterly reconcili ations; • properly maintained a ledger for each person or entity from whom or for whom trust money was received; • properly prevented bank service fees be ing paid with entrusted funds; • properly maintained a ledger of lawyer’s funds used to offset bank service fees; • properly recorded the bank date of de posit on the client’s ledger; • promptly removed earned fees or cost reimbursements; • promptly remitted to clients’ funds in possession of the lawyer to which clients were entitled;

• properly signed trust account checks (no signature stamp or electronic signature used); • properly maintained records that are re tained only in electronic format; • provided written accountings to clients at the end of representation or at least annually if funds were held for more than 12 months; • properly used business size checks con taining the Auxiliary On-Us field; • properly removed signature authority from employee(s) responsible for performing monthly or quarterly reconciliations; • properly deposited funds received with a mix of trust and non-trust funds into the trust account. Based on the geographic plan for 2026, audits for the first quarter will be conducted in Chatham, Guilford, Johnston, Mecklen burg, Orange, Pitt, Union, Wake, Wilson, and Yancey Counties. n 46. Oct. 29, 1956, letter from George to Lake, in the W. C. George Papers #3822, Southern Historical Collection, Wilson Special Collections Library, University of North Carolina at Chapel Hill. 47. Series 2. Writings, 1950s-1960s, Subseries 2.1. Writings by George, in the W. C. George Papers #3822, Southern Historical Collection, Wilson Special Collections Library, University of North Carolina at Chapel Hill. 48. See, e.g. , Nell Irvin Painter, The History of White People , W.W. Norton & Co. (2010). 49. Oral History Interview with Asa T. Spaulding, April 14, 1979. Interview C-0013-2. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill. 50. Swann v. Charlotte-Mecklenburg Bd. of Ed. , 311 F. Supp. 265, 268 (W.D.N.C.), vacated, 431 F.2d 138 (4th Cir. 1970), aff’d in part, 402 U.S. 1 (1971). 51. Hawkins v. N.C. State Bd. of Educ. , No. 2067, 11 Race Rel. L. Rep. 745 (W.D.N.C. Mar. 31, 1966) (declaring the Pearsall Plan facially unconstitutional). Brown v. Board of Education (cont.)

SPRING 2026

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