Much has been said and written concerning prompt earnest money deposits; separate trust bank accounts; escrow reference on all documents (i.e. deposit slips, checks, bank statements, etc.), record retention; orderly closed and pending files, journals, and ledgers; money receipts, dates, disbursements; and reasons.

It's true that all of the above are vital components of good control, and most are requirements mandated by North Carolina statute, and by the rules and regulations of the North Carolina Real Estate Licensing Board.

And now for the "Good News" and the "Bad News". The "good news" is that many brokers comply with all rules and regulations all the way down to maintaining a neat up-to-date journal and ledger. The "bad news" is that these same brokers often fail to reconcile trust bank statements to the journal balance or to the open ledger balances.

Bank statements reflecting more or less money than shown in the broker's records is a serious violation of law. The purpose of the "tools" mentioned in the first paragraph is to establish audit trails and to help maintain control of your principal's money. Lack of control is indicated when the broker's records do not balance with the amount of money that the broker has in the bank.