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Audit Information





Guidelines & Helpful Information

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Audit Staff

Lynn Comfort - Real Estate Specialist/Auditor
Lynn examines real estate company records. She joined the Commission staff in 2010.

Wendy Alkire - Compliance Supervisor
Wendy supervises the auditing department. She has been with our office since 2007.

Examinations of Real Estate Offices

  • KREC employees audit records and trust accounts through an audit by mail program or by onsite visits.
  • A primary purpose of examinations is to determine that funds received by licensees in real estate transactions are properly handled. Examiners track funds to be sure they are properly deposited, that there are no unauthorized or early disbursements, and that funds are not commingled or converted to personal use.
  • Examiners also review contracts and other documents in transaction files and monitor compliance with law and regulations.

Having A Successful Audit

Regulations to Remember

  • Regulation 86-3-10
    all records relating to the broker's real estate business are to be retained in the broker's files for three years

  • Regulation 86-3-22
    transaction numbers are to be assigned and placed on all applicable records

  • Regulation 86-3-18
    if the broker maintains a trust account, a complete record of all monies received or escrowed on real estate transactions must be maintained

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Examination by Real Estate Commission

When a representative of the Real Estate Commission contacts your office to examine your records, he or she will ask for records for a specified period of time. The examiner will review transaction files and, if applicable, trust account records.

Transaction Files

Each transaction file whether PENDING, CLOSED OR CANCELED should contain all of the following records IF APPLICABLE to the transaction:

  • agency agreement with seller
  • agency agreement with buyer
  • transaction broker addendum
  • transaction brokerage agreement
  • offers, counteroffers
  • contract
  • lot reservation agreement
  • commercial lease
  • option
  • receipt for purchase agreement and earnest money
  • closing statements
  • authorization to disburse earnest money on transaction which did not close
  • any other record generated in connection with the transaction

Trust Account Records

A complete record of all monies received or escrowed on real estate transactions must be maintained:

  • deposit slips showing transaction number, date of deposit, amount and where deposited
  • monthly trust account bank statement, canceled checks and deposit slips
  • a check register which shows the chronological sequence in which funds are received and disbursed
    • for funds received: date of deposit, transaction number, amount
    • for disbursement: date, transaction number, payee, amount
    • the current balance
  • a ledger for each transaction, including:
    • names of principals
    • property address
    • transaction number
    • amount
    • date of each deposit
    • check number
    • date of check
    • payee
    • amount of each disbursement
    • the current balance
  • a ledger for broker's funds, if applicable

Reconciling Trust Account Records

Reconcile trust account records monthly.

Step 1: How much money is in the trust account?
Balance the bank statement.

Step 2: How much money should be in the trust account?
Establish trust account liability by adding the balances of all ledgers. If ledgers are properly maintained and no errors are made, the total of all ledgers will be the trust account liability.

Step 3: Compare trust account liability to the reconciled bank balance.

Does the bank balance match trust account liability? If they don't match to the penny, find out WHY.

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Who to Contact

Wendy Alkire, Compliance Supervisor (785) 296-7891

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Three Townsite Plaza STE 200  -  120 SE 6th Ave  -  Topeka, Kansas  66603-3511
phone: 785.296.3411 - fax: 785.296.1771 - email:

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