Audit finds bias by county recorder’s office

Friday, Jan. 2, 2004 | 11:22 a.m.

An internal audit of Clark County Recorder Fran Deane's office has found that the office gave title companies preferential treatment, a pattern that county officials believe is a violation of state law.

Deane, who has held office for one tumultuous year, allows title companies to bring in work directly to the recorder's office on the second floor of the Clark County Government Center, giving those walk-ins priority over documents mailed to the office. Nevada law stipulates that documents are to be recorded in the order received, regardless of how they are received.

The audit, which reviewed the period of October 2002 through September, indicated that the preferential treatment continues. But a representative from the Clark County district attorney's office suggested the audit and increased scrutiny by county officials are correcting the problem of the preferential treatment.

Deane said this morning that preferential treatment is not now a problem and was not a problem in the past.

"Walk-in customers do not consist solely of title companies," she said. "Seventy-five percent of people who come into my office are not title companies. Seventy-five percent of the people who walk into my office are the public.

"That means there is no preferential treatment for title companies. We do not do anything differently today than we did before ... As fast as we can, as quickly as we can, we are processing every single document as they are presented.

"We did not do anything intentionally wrong."

The recorder's office provides a critical public function in documenting a number of public records, mostly property records. Those records are essential for the sale of homes or other real property.

Preferential treatment puts the general public at a disadvantage, the audit report said, because the legal priority is established by the order in which recorded information is processed.

The issue of preferential treatment was one of a handful of issues reviewed by county auditors. They included allegations of a high error rate in the documents recorded by Deane's staff and the waiving of fees for some customers.

The audit found the error rate was less than 1 percent, which appears to be at or better than average. The county auditors did not find a national error rate, but a survey conducted by the New York City chapter of a national recording industry association found that companies typically misfile 2 percent to 7 percent of their records.

"We have been informed that records/information management industry statistics over the past 25 years indicate an average 1 percent to 2 percent misfile for manual systems," the auditors noted. "The misfile rate for electronic and digital documents in an electronic document management system should be much less ... The Recorder's Office error rate appears to be in line with electronic systems."

The office is in transition from a manual to a computerized system.

But auditors also reported finding evidence of improperly waived fees and penalties for title companies, and in one case, a $52 fee was waived for an employee in the office.

The actions ultimately added up to a few hundred dollars, and were corrected once the problems were addressed, according to county staff and Deputy District Attorney Mary Miller.

The auditors suggested that the office develop a "clear, concise and thorough procedure manual" to avoid missteps in handling public records.

Deane said that when her office received the audit report, she immediately began to write a procedures manual. The conversion of the office from a manual system to an electronic, computerized system has complicated writing the manual because some of the procedures will change, she said.

Clark County Manager Thom Reilly, whose office has frequently been at odds with the publicly elected recorder, said the audit points to a continuing problem in the office.

"She appears to be still setting up special mechanisms to give the title companies special treatment over everybody else," he said. "Some people don't have the ability to come in and wait in line. The (state) statute doesn't allow her to make these decisions."

Reilly said the error rate was never an issue for the county staff, but the examination of that issue was included at Deane's request.

Since the recorder position is an elected office, Reilly said there is little that he can do to force Deane to follow the county's interpretation of state law.

Deane, in her formal response to the audit, wrote Reilly that she would "take under advisement" the audit's recommendations. Deane's response did not refer to the issue of preferential treatment for the title companies.

"We'll see what taking it under advisement means," Reilly said. "If she continues to refuse to follow the NRS (Nevada Revised Statutes), the D.A. may take some action."

Miller, of the district attorney's office, said her office is "cautiously optimistic" the problems of waivers and preferential treatment are being addressed.

"I don't see the need for D.A. action at this time," Miller said. Deane is putting more staff members -- which were approved last year by the Clark County Commission -- on mail-in document recording, "and that problem is improving," Miller said.

The waivers and other issues essentially occurred because Deane took advice from the wrong people, Miller said.

"It seems like when she first took office, she did not solicit advice appropriately," Miller said. "She is spending more time talking to the District Attorney staff, so I don't expect to see this type of problem reoccur."

The issue of preferential treatment is only one of many that have come up over the last year affecting the office. In March 2003, Deane turned off the public telephone connections to her office -- although the audit and Reilly point out that title companies continued to have access through a special fax machine.

A few months later Deane took heat for her abortive proposal to set up a profit-making company that would sell access to public records to the public. The company, which would have personally profited Deane, would have directly competed with a company contracted by the county to provide free Internet access to the same records.

The company accused Deane of deliberately blocking its work on the computerization process. Deane said she was concerned the company was charging to much for its work.

In September the Service Employees International Union, representing employees in Deane's office, filed an ethics complaint with the Nevada Ethics Commission and demanded her resignation. The union accuses Deane of fostering a hostile work atmosphere, but the primary issue cited by the union was that the office granted preferential treatment to title companies.