Background: During a self-conducted audit, you discover that after receiving and depositing an Escrow Money Deposit in a timely manner, the check has bounced. Your ordinary practice is to check the company’s bank account once a month, so you don’t discover that the check bounced until almost 30 days after you deposited it. Knowing that this is a violation of the duty to deposit funds within five business days, what you do next can determine whether or not you face penalties.

What should I do if I discover that my firm, or a member of my firm, has violated the law?

If you conduct a self-audit, or hire an outside firm to conduct an audit for you, and you discover a violation, you may be able to avoid penalties if you notify VREB within 30 days of discovering the violation. When you contact VREB, you should also include a written plan explaining how you will remedy the problem to bring your firm into compliance within the next 90 days. 

Once you have implemented your plan, and you have brought your firm into compliance, you will need to again contact VREB to certify that you have taken the steps laid out in the voluntary compliance plan. If an outside firm conducted the audit and discovered the problems, you will need to have the firm certify that you have implemented the plan.

Will submitting a voluntary compliance plan to VREB shield me from penalties?

There are two instances in which a voluntary compliance program will not protect you: if the original violation was intentional or the result of gross negligence. If the violation was not intentional or the result of gross negligence, then once you have followed the steps in the voluntary compliance program, you will not be subject to penalties for that particular violation.