Client Trust Account (IOLTA) Reconciliation - Delaware

CLIENT TRUST ACCOUNT (IOLTA) RECONCILIATION — DELAWARE

Account and Period Information

I. Purpose and Governing Rule

This reconciliation documents compliance with the Delaware rules governing safekeeping of fiduciary funds:

• Del. R. Prof'l Conduct 1.15(a) — client/third-party property must be held separate; lawyer funds in the fiduciary account may not exceed $2,000 (to cover financial-institution charges). Complete records preserved five years after the events recorded.
• Del. R. Prof'l Conduct 1.15(d) — books and records maintained on a current basis and retained at least five years following the year to which they relate (or, for fiduciary records, five years after completion of the fiduciary obligation). Requires, among other things:
• monthly reconciliation of the cash receipts journal total to bank deposits (1.15(d)(6));
• a monthly reconciliation matching journals to the ending check-register balance for manual systems (1.15(d)(7));
• monthly reconciliation of the general-ledger balance to the bank reconciliation balance (1.15(d)(8));
• a subsidiary ledger per client/third party with monthly listings of balances, the total of which must agree with the bank reconciliation and general ledger (1.15(d)(12)(A),(B),(D)).
• Del. R. Prof'l Conduct 1.15(g)–(h) and 1.15A — IOLTA-eligible (nominal/short-term) funds are pooled in an IOLTA account at an institution approved by the Lawyers' Fund for Client Protection (LFCP) and determined eligible by the Delaware Bar Foundation; interest is remitted to the Foundation.
• Supreme Court Rule 69 — each firm designates a Delaware Lawyer in Charge and files an annual Certificate of Compliance verifying the Rule 1.15 recordkeeping procedures; the LFCP auditor may examine the records.

II. Three-Way Reconciliation Summary (Monthly)

All three balances below must agree as of month-end.

A. Adjusted Bank Balance

B. Check Register / General Ledger Balance

C. Subsidiary Ledger Total (Client/Third-Party Balances)

D. Agreement Check

Reconciled amount (if all agree): $[____]

III. Client / Third-Party Subsidiary Ledger Schedule

IV. Exception and Variance Investigation

Variance amount: $[____]

Potential causes reviewed:

☐ Bank error (contact institution)
☐ Unrecorded deposit or disbursement
☐ Duplicate or transposed entry
☐ Math error on a subsidiary ledger
☐ Posted bank service charge / interest not recorded
☐ Check outstanding six months or more — contact payee; issue replacement (RPC 1.15(d)(12)(E))
☐ Negative client balance — transfer firm funds from operating account to cure (RPC 1.15(d)(12)(C))
☐ Unidentified / unclaimed funds (RPC 1.15(d)(12)(F))
☐ Other: [________________________________]

Investigation notes:

[____________________________________________________________]

[____________________________________________________________]

Resolution:

☐ Variance resolved — corrective action: [________________________________]
☐ Variance unresolved — escalation required

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

V. Compliance Checklist (Del. R. Prof'l Conduct 1.15, 1.15A)

☐ Fiduciary funds held separate; lawyer funds in the account do not exceed $2,000 (bank-charge cushion); no commingling (RPC 1.15(a))
☐ Account titled "Rule 1.15A Attorney Trust Account" / "Escrow Account" (or "1.15A Trust/Escrow Account") on the bank statement (RPC 1.15(d)(2))
☐ No negative client/third-party balances (RPC 1.15(d)(12)(C))
☐ Earned legal fees transferred to the operating account promptly and timely once earned (RPC 1.15(d)(12)(H))
☐ Only a Delaware-admitted lawyer (or supervised person) is an authorized signatory; withdrawals only by check to a named payee or authorized electronic transfer — no checks to "Cash" (RPC 1.15(d)(12)(J),(K))
☐ Monthly reconciliations performed and subsidiary-ledger listing agrees with bank reconciliation and general ledger (RPC 1.15(d)(6)–(8),(12)(D))
☐ Checks outstanding six months or more investigated and replaced as needed (RPC 1.15(d)(12)(E))
☐ Records maintained currently and retained at least five (5) years (RPC 1.15(a),(d))
☐ For computerized systems, monthly hard copy or electronic backup of journals, ledgers, reports, and reconciliations created (RPC 1.15(d)(13))
☐ IOLTA-eligible funds pooled in an LFCP-approved / DBF-eligible IOLTA account; interest remitted to the Delaware Bar Foundation (RPC 1.15(g)–(h), 1.15A)
☐ Unidentifiable/unclaimed funds held 12 months, then remitted to the LFCP (RPC 1.15(d)(12)(F))
☐ Annual Certificate of Compliance filed (Supreme Court Rule 69); Delaware Lawyer in Charge designated

VI. Preparer and Reviewing-Attorney Certification

I certify that this reconciliation was performed in accordance with Del. Lawyers' R. Prof'l Conduct 1.15 and 1.15A, that all client and third-party funds are accounted for, that no funds have been converted or misappropriated, and that supporting records will be retained for at least five years and are subject to examination by the LFCP auditor.

Preparer

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

Printed name / title: [________________________________]

Reviewing Attorney / Delaware Lawyer in Charge

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

Printed name / Delaware Bar ID No.: [________________________________]

Delaware Practice Notes

• Trust-accounting rule: Del. Lawyers' R. Prof'l Conduct 1.15 (safekeeping + extensive books-and-records provisions in 1.15(d)) and 1.15A (approved IOLTA institutions).
• Reconciliation frequency: Monthly — cash-receipts-to-deposits reconciliation, check-register/general-ledger reconciliation, and a monthly subsidiary-ledger listing that must agree with the bank reconciliation and general ledger (RPC 1.15(d)(6)–(8),(12)(B),(D)).
• Retention: At least five (5) years following the year to which the records relate (or five years after completion of a fiduciary obligation) (RPC 1.15(a),(d)).
• IOLTA program: Administered by the Delaware Bar Foundation on behalf of the Supreme Court; eligible institutions are approved through the Lawyers' Fund for Client Protection.
• Overdraft / self-audit: Delaware enforces trust-accounting compliance primarily through the annual Certificate of Compliance (Supreme Court Rule 69) signed by the Delaware Lawyer in Charge and through examination by the LFCP auditor; filing an inaccurate Certificate of Compliance is itself a disciplinable offense.
• Distinctive Delaware features: $2,000 lawyer-funds cap; mandatory account title containing "Rule 1.15A"; six-month stale-check rule; 12-month hold then remittance of unidentifiable/unclaimed funds to the LFCP.
• Unsettled / verify: Confirm the current Certificate of Compliance form and any updated Safe Harbor IOLTA rate with the LFCP and Delaware Bar Foundation before filing.

Sources and References

• Del. Lawyers' R. Prof'l Conduct 1.15 (Delaware Courts form/text)
• Delaware Lawyers' Rules of Professional Conduct (full set, Public Integrity Commission PDF)
• Lawyers' Fund for Client Protection — Certificate of Compliance (Delaware Courts)
• Delaware Bar Foundation — Resources for Attorneys (IOLTA)