Trust account audits and the Fidelity Fund certificate
Who needs a Fidelity Fund certificate, when the trust account audit report is due, and how a practice gets its business books and auditor ready.
By Achekam · · 5 min read · For Legal businesses in South Africa
For a South African attorney in practice, one document sits underneath everything else: the Fidelity Fund certificate. Without a valid one the practitioner may not practise for their own account, and the protection it gives clients falls away.
The certificate comes round every year, and so does the trust account audit that feeds into it. The practices that find this season painful are usually not the ones with messy trust records. They are the ones whose business books are still open, whose auditor is waiting for access, and whose year-end adjustments are being posted in the same week the report is due. This article sets out what the rules ask and how to have your own side ready early.
Who has to hold a certificate
The Legal Practice Council (LPC) says that under section 84 of the Legal Practice Act, every attorney practising for their own account, in partnership or as a director of a juristic practice, and every trust account advocate, must hold a Fidelity Fund certificate. Practitioners employed full-time by the State or the South African Human Rights Commission are excluded.
In a two-director incorporated practice, that means both directors. In a sole practice, the principal. A professional assistant who does not practise for their own account is not in the list, but the practice they work for is.
A yearly renewal that clients can check
According to the LPC, Fidelity Fund certificates are renewed annually, and the Legal Practitioners Fidelity Fund cannot consider a claim where the practitioner had no valid certificate. That second point is the one that should focus a principal's mind. If a trust shortfall comes to light and the certificate had lapsed, the client's route to the Fund is closed.
Clients and other practitioners can check. The LPC's website offers Fidelity Fund certificate verification, and it publishes lists of legal practitioners, legal firms, and struck and suspended practitioners. A conveyancer on the other side of a transfer, or a cautious client, can look you up before paying anything into your trust account.
The trust account audit report and its deadline
The Fidelity Fund says trust account practices must submit their annual trust account audit reports to the relevant provincial Legal Practice Council within 6 months of the end of the financial period. It also suggests lodging the application for a refund of bank charges and audit fees at the same time.
Six months sounds generous until you count backwards. The auditor needs time on site or with the records. Before that, the practice's books must be closed and its trust records reconciled. Before that, the year's last fee notes, disbursements and bank lines must be in. A practice that starts that chain in month five is the one that asks its auditor for a favour.
Rule 54 and the LPC Rules
Trust accounting by legal practices is governed by Rule 54 of the LPC Rules. The rules are not static: the LPC lists amendments made from 2019 to 2024, including changes to Rules 21 and 22 on 9 February 2024 and to Rule 54.14.16 on 8 December 2023. Before each audit season, check the rules page for any amendment since your last audit and ask your auditor whether it affects your trust procedures.
Getting the business books closed in time
The trust ledger and the practice's own business books are separate records, and the audit looks at how money moves between them, for example when fees are transferred from trust to business. This article is about the business side. Keep your trust records the way Rule 54 requires and your auditor expects; Achekam is used here for the practice's own books.
In Achekam, two things make the year end firm rather than provisional:
- Closing the months. Each month can be soft-closed, hard-closed and then locked. A closed month refuses postings from every source, so a fee note dated in March cannot slip into a closed March after the auditor has started. Reopening a hard close needs a second approver. Before you close, the screen checks that the ledger balances and that no posting suggestions, unposted bills or unmatched bank lines are still waiting.
- A trial balance that says whether it balances. The general ledger lists every posted line, and the trial balance shows each account for all time, for a period or at a date, and tells you whether debits equal credits. Run it at the financial year end and keep that view for the auditor.
If a fee note turns up after the month has closed, deal with it properly rather than reopening the year. See handling a late fee note in a closed month. A chart of accounts that keeps fee income, disbursements recovered and transfers from trust in separate lines also makes the auditor's job shorter; a chart of accounts for a law practice covers that.
Giving the auditor read-only access
Sending spreadsheets back and forth is how versions multiply. Instead, the practice can appoint its auditing firm inside Achekam:
- Open the appointments screen and enter the firm's Achekam address or firm code.
- Choose the role: auditor, accountant, tax practitioner, payroll provider or adviser.
- Choose the access level. Review access is read-only. Bookkeeping access covers the accounting but not the practice's users, settings or payment gateways.
- The firm accepts or declines the appointment.
For an audit, review access is the natural choice: the auditor sees the ledger and trial balance as they are, and cannot change them. More on how that works in giving your accountant review access.
A year-end timeline for the principal
| When | What | Who |
|---|---|---|
| Last month of the year | Issue outstanding fee notes; capture disbursements | Fee earners, bookkeeper |
| First weeks after year end | Match bank lines, clear unposted bills, close the months | Bookkeeper |
| Once closed | Run the trial balance at year end; appoint the auditor with review access | Principal |
| During fieldwork | Answer the auditor's queries; check the LPC Rules for recent amendments | Principal, auditor |
| Before the deadline | Submit the audit report to the provincial LPC with the refund application | Principal |
Before you file
The Fidelity Fund's page on trust accounts sets out the audit report deadline and the refund application. Put the six-month date in the diary today, and work back from it to the day your business books must be closed.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
