It's Hard To Bank On City Court

Seattle Municipal Court has failed to deposit more than $100,000 in checks, some of which date back to May, according to an audit by the city comptroller.

The court's chronic failure to deposit checks within 48 hours of receipt, as required by city charter, has the potential to cost the city millions in lost interest, says City Treasurer Lloyd Hara.

The audit, released yesterday, reaffirms findings from a related audit two years ago that concluded the court's ``practices result in poor internal controls.''

Of the 999 checks totaling $54,000 deposited with the city treasurer's office Tuesday, only 34 were deposited within the 48-hour deadline, according to Hara. The bulk of them, 603, were two weeks old; 214 were one week old; and the remainder were older than two weeks.

The new audit was conducted after two City Council members complained to Municipal Court judges. The council members were informed of the continuing problem by a court employee.

Councilwoman Dolores Sibonga, who chairs the council's Finance Committee, said she finds the delayed-deposit situation appalling. She said she'll give strong consideration to transferring the court's revenue-collection function to the treasurer.

Under the city charter, anyone who fails to deposit checks on time is liable to pay the city double the amount of the checks, but the penalty has never been enforced, said Hara, who has been city treasurer for more than a decade.

Hara said his office has helped train Municipal Court cashiers how to handle checks promptly, but that the court tends to hang on to them when it isn't clear which account should receive the money.

The proper procedure is to make a copy of the check, deposit it, and work to square accounts.

Hara estimated that his department receives each day an average of 300 checks totaling $15,000 that are 20 days old. Figuring lost interest income at the rate of 8 percent, that works out to an annual loss of about $700,000, he said.

``We're not talking about a few dollars,'' Hara said yesterday. ``Each day is a day's lost interest.''

After Sibonga and Councilwoman Jane Noland recently complained about the delays, the court hired temporary help and made part-time employees full time to clean out a backlog of roughly 2,000 checks written to pay for parking tickets and criminal fines.

Hara said he has brought the delayed-deposit issue to the attention of court management in the past, but ``there's no follow-up. There's verbal commitment (to fix the problem) but no actual commitment of doing it,'' he said.

Hara said his department is better at collecting and processing money than the court, and doesn't understand the court's reluctance to give up its revenue unit, especially in light of how overburdened the court is.

Last evening, Municipal Court spokesman Forrest Gamble admitted that the delayed check-deposit issue is ``a problem that's been with us for a while . . . It seems to go in waves.''

Gamble said he was unaware of any previous formal proposals to transfer the court's revenue-collection unit to the treasurer, but Hara produced a Feb. 14, 1989, letter to then presiding Judge Ronald Kessler suggesting that the treasurer's office take over processing of cash payments for parking violations.

Hara said Kessler never responded in writing to the letter. Kessler is out of town and unavailable for comment.

The new audit faults the court's revenue division for not immediately endorsing the checks it receives, opening the door to fraud, and criticizes the court for not safeguarding its checks in a fireproof, locked cabinet.

Hara said the court generally waits until there's a crisis to act.

For example, security became a big issue earlier this year after a gang-related fight broke out in a courtroom.

One of the complaints about court employee safety to emerge was that women cashiers felt vulnerable in carrying thousands of dollars in a brown paper bag from the jail to the treasurer's office every day, a practice that had been going on for years.