Client Trust Account (IOLTA) Reconciliation - Arkansas

CLIENT TRUST ACCOUNT (IOLTA) RECONCILIATION — ARKANSAS

Account and Period Information

I. Purpose and Governing Rule

This worksheet documents the periodic three-way reconciliation of a client trust account maintained under Ark. R. Prof. C. 1.15 (Safekeeping Property and Trust Accounts), which requires an Arkansas lawyer to hold the property of clients and third persons separate from the lawyer's own property, to maintain books and records on a current basis in accordance with generally accepted accounting practice, and to preserve complete trust records.

Reconciliation frequency. Arkansas Access to Justice Foundation and Office of Professional Conduct guidance treats a monthly three-way reconciliation — comparing the bank statement balance, the internal checkbook/ledger (control) balance, and the sum of all individual client-ledger balances — as the required standard. This worksheet is structured for a monthly cadence.

Three-way reconciliation. A complete reconciliation requires that three independently derived balances agree as of the reconciliation date:

1. the adjusted bank balance (Section II(a));
2. the checkbook / control (book) balance (Section II(b)); and
3. the sum of all individual client-ledger balances (Section II(c)).

II. Three-Way Reconciliation

(a) Adjusted Bank Balance

Deposits in Transit

Outstanding Checks

(b) Checkbook / Control (Book) Balance

(c) Sum of Individual Client-Ledger Balances

Three-Way Comparison — All Three Must Agree

☐ RECONCILED — all three balances agree
☐ NOT RECONCILED — complete Section IV

III. Client Ledger Schedule

IV. Exception / Variance Investigation

☐ No variance identified — the three balances agree to the penny.

☐ Variance identified. Amount of difference: $[____]

Items investigated:
☐ Bank error / unposted bank transaction
☐ Unrecorded deposit or disbursement
☐ Duplicate or transposed entry
☐ Math error on a client ledger
☐ Bank service charge debited against principal
☐ Stale / outstanding check over 90 days
☐ Other: [________________________________]

Explanation and corrective action:

[____________________________________________________________]

[____________________________________________________________]

Date variance resolved: [__/__/____] Resolved by: [________________________________]

V. Arkansas Trust-Accounting Compliance Checklist

☐ No commingling — only client/third-person funds are held, except up to $500 of the lawyer's/firm's own funds to pay bank charges or meet a minimum-balance/fee-waiver requirement, clearly identified as such (Rule 1.15(b)(3))
☐ No negative client-ledger balances exist
☐ Advance legal fees and expenses deposited into trust and withdrawn only as fees are earned or expenses incurred (Rule 1.15(b)(2))
☐ Earned fees withdrawn promptly once earned
☐ Each client/matter has a current individual ledger showing all deposits, disbursements, and a running balance
☐ Trust records (bank statements, canceled checks, deposit slips, client ledgers, disbursement records, monthly reconciliations) preserved for at least five (5) years after termination of the representation or last contact with a prospective client (Rule 1.15(a)(3))
☐ Books and records maintained on a current basis in accordance with generally accepted accounting practice (Rule 1.15(a)(4))
☐ Each trust account is an interest- or dividend-bearing account at an eligible institution (Rule 1.15(b)(4))
☐ The eligible institution provides overdraft notification to the Executive Director of the Office of Professional Conduct (Rule 1.15(b))
☐ The account is enrolled in IOLTA (or a proper non-IOLTA individual interest-bearing account is used where funds can earn net interest for the client)
☐ Interest on the IOLTA account is remitted to the Arkansas Access to Justice Foundation
☐ Annual certification of compliance with Rule 1.15 has been completed

VI. Preparer and Reviewing-Attorney Certification

I certify that I prepared/reviewed this three-way reconciliation, that it was performed in accordance with Ark. R. Prof. C. 1.15, that all client and third-person funds are accounted for, and that no funds have been misappropriated or improperly commingled. Any variance has been documented in Section IV.

Preparer Signature: ________________________________ Date: [__/__/____]

Preparer Printed Name / Title: [________________________________]

Reviewing Attorney Signature: ________________________________ Date: [__/__/____]

Reviewing Attorney Printed Name / Bar No.: [________________________________]

Arkansas Practice Notes

• Safekeeping rule. Ark. R. Prof. C. 1.15 ("Safekeeping Property and Trust Accounts") governs both safekeeping and the IOLTA/non-IOLTA trust-account framework. Complete records must be preserved for five (5) years after termination of the representation or the last contact with a prospective client (Rule 1.15(a)(3)), and books and records kept current under generally accepted accounting practice (Rule 1.15(a)(4)).
• Reconciliation frequency. Arkansas program and disciplinary guidance treats a monthly three-way reconciliation as the expected practice. Rule 1.15 itself frames recordkeeping in terms of current, GAAP-compliant books; confirm whether current Office of Professional Conduct guidance imposes a specific numeric interval before relying on the monthly cadence as a black-letter requirement.
• Eligible institutions / overdraft notification. Each trust account must be interest- or dividend-bearing at an eligible institution, and each such account must provide overdraft notification to the Executive Director of the Office of Professional Conduct (Rule 1.15(b)).
• Lawyer funds in trust. Up to $500 of the lawyer's/firm's funds may be kept in the trust account solely to pay bank charges or meet a minimum-balance/fee-waiver requirement (Rule 1.15(b)(3)).
• IOLTA program. Administered by the Arkansas Access to Justice Foundation (the Arkansas IOLTA Foundation), which receives the interest for civil legal aid. All Arkansas-licensed lawyers must annually certify compliance with Rule 1.15.
• Unsettled / verify: the precise current subsection lettering of Rule 1.15(b) (including the overdraft-notification subparagraph) and whether a numeric reconciliation interval is expressly imposed; re-verify against the current rule text.

Sources and References

• Ark. R. Prof. C. 1.15 — Safekeeping Property and Trust Accounts (PDF)
• Arkansas IOLTA Program Guidebook (Arkansas Access to Justice Foundation, 2025)
• Arkansas Judiciary — IOLTA Information / annual Rule 1.15 certification