Auditor's Corner

Escrow: Back to the Basics* RESA Audits

Virginia escrow accounts to be styled "Trust" or titled "Escrow." E-Recording accounts should also be styled "Trust" or "Escrow."

1. Virginia escrow accounts to be styled “Trust” or titled “Escrow.” E-Recording accounts should also be styled “Trust” or “Escrow.”

2. During the annual Virginia RESA Audit--All--escrow accounts are to be listed on Schedule A and provided for review.

3. Monthly three-way reconciliations of each escrow account are required by Agency of Agreement and by the Bureau of Insurance.

4. The Bureau of Insurance Common Problems memo goes over the expectations of the BOI, including funding negative file balances and outstanding deposits within 2 business days. Any escrow shortage noted during the review period will be addressed, as the BOI requires this information from the auditors. 

5. The RESA report requires auditors to ensure monthly reconciliation reports show management has reviewed, approved and signed each report. If this is not observed during the review, the BOI expects this notes as a finding.

6. As of 2017, the escheat rules for settlement agents were modified, in part, because the Virginia Treasury allows for early remittance of "unlocatable payee" funds. This helps clear the escrow account of other people's money--annually. The official rule can be found here. Of course, the adherence to this rule is of great interest to the BOI, as well, and auditors are to note any findings.

Finally, please remember that each time a software switch is made, a new escrow account is highly recommended. This will keep reconciliation reports and escrow funds duly balanced, preventing an administrative dilemma.

*This list is not all-inclusive.

Please email VAAuditing@OldRepublicTitle.com with any audit or escrow question.