MONTHLY TRUST ACCOUNT RECONCILIATION

Three-Way Reconciliation Worksheet

Account Information

Law Firm Name: [________________________________]

Trust Account Name: [________________________________]

Financial Institution: [________________________________]

Account Number: [________________________________]

Reconciliation Period: [________________________________]

Reconciliation Date: [__/__/____]

Prepared By: [________________________________]

Reviewed By: [________________________________]

PART 1: BANK STATEMENT RECONCILIATION

Bank Statement Summary

Add: Deposits in Transit

Less: Outstanding Checks

Adjusted Bank Balance Calculation

PART 2: BOOK/CHECKBOOK RECONCILIATION

Trust Account Book Balance

Adjustments to Book Balance

Adjusted Book Balance Calculation

PART 3: CLIENT LEDGER RECONCILIATION (TRIAL BALANCE)

Individual Client Ledger Balances

PART 4: THREE-WAY RECONCILIATION COMPARISON

Reconciliation Status

☐ RECONCILED - All three balances match
☐ NOT RECONCILED - Discrepancy identified (complete Part 5)

PART 5: DISCREPANCY INVESTIGATION (If Applicable)

Discrepancy Amount: $[________]

Potential Causes Investigated

☐ Bank errors (contact bank)
☐ Unrecorded deposits
☐ Unrecorded disbursements
☐ Duplicate entries
☐ Mathematical errors in client ledgers
☐ Outstanding checks not recorded
☐ Deposits in transit not recorded
☐ Timing differences
☐ Interest credits not recorded
☐ Bank fees not recorded
☐ Other: [________________________________]

Investigation Notes

[________________________________]
[________________________________]
[________________________________]
[________________________________]

Resolution

☐ Discrepancy resolved - describe corrective action:
[________________________________]
[________________________________]

☐ Discrepancy unresolved - escalation required

Date Resolved: [__/__/____]

Resolved By: [________________________________]

PART 6: MONTHLY RECONCILIATION CHECKLIST

Documents Gathered

☐ Bank statement for the month
☐ All canceled checks (front and back images)
☐ All deposit slips
☐ Trust account check register/journal
☐ All individual client ledger cards
☐ Prior month's reconciliation

Reconciliation Steps Completed

☐ Compared deposits per bank statement to deposits per books
☐ Compared checks cleared per bank statement to disbursements per books
☐ Identified all deposits in transit
☐ Listed all outstanding checks
☐ Verified no checks outstanding more than 90 days (investigate if any)
☐ Computed adjusted bank balance
☐ Recorded all bank adjustments to books (fees, interest, etc.)
☐ Computed adjusted book balance
☐ Totaled all individual client ledger balances
☐ Confirmed three-way reconciliation balances match
☐ Investigated and resolved any discrepancies

Red Flags Reviewed

☐ No negative client balances exist
☐ No stale checks (outstanding > 90 days) without explanation
☐ No unexplained deposits
☐ No unauthorized disbursements
☐ All disbursements properly authorized

PART 7: COMPLIANCE CERTIFICATION

I certify that:

1. This reconciliation was performed in accordance with applicable rules of professional conduct
2. All client funds have been properly accounted for
3. No client funds have been converted or misappropriated
4. All discrepancies have been identified and resolved
5. Records supporting this reconciliation will be maintained for the required retention period

Prepared By:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

Title: [________________________________]

Reviewed/Approved By:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

Title: [________________________________]

PART 8: ANNUAL SUMMARY (Complete in December)

Reconciliation Frequency Requirements

ABA Model Rules Recommendation:
- Trial balances: Monthly (minimum)
- Three-way reconciliation: Quarterly (minimum); Monthly (recommended)

State Variations:
- California: Monthly reconciliation required per Rule 1.15(d)
- New York: Monthly reconciliation required
- Texas: Monthly reconciliation required
- Florida: Monthly reconciliation required

Record Retention

Maintain reconciliation records for a minimum of five (5) years after the date of the reconciliation, including:
- Completed reconciliation worksheets
- Bank statements
- Canceled check images
- Deposit records
- Client ledger cards

Sources and References

• ABA Model Rules on Client Trust Account Records
• ABA Model Rules - Rule 1 Recordkeeping Generally
• Law Firm Trust Account Reconciliation Explained
• Illinois Client Trust Account Handbook