Forensic GL reconciliation — recovering a restricted trust account

Reference · Forensic reconciliation · Transaction-level forensics · Multi-entity operator · $142K recovered to trust

The situation

A restricted sales-tax holding account — a trust liability, money owed to the state and not the operator's to spend — had been quietly drawn down by intercompany cash transfers. On paper the account looked fine. At the transaction level it wasn't.

The work

Running an LLM workflow directly against the transaction-level GL extract — not a summarized trial balance — every entry hitting the restricted account was traced to its source. Three early-period cash transfers had pulled funds out of the trust to cover operating needs across the entity structure. Total owed back to the trust: $142K.

The resolution

$75K had already been booked back. The remaining $67K was isolated and a tracking journal entry built so the restoration was documented and auditable, with each figure citing back to the specific GL rows it came from. A per-entity holding-account structure was then designed so the trust liability couldn't be commingled with operating cash again.

Why it matters

Trust-account shortfalls are the kind of issue that surfaces in an audit or a state exam, not a routine close. Catching it at the transaction level — and documenting the cure with source-row traceability — turns a potential finding into a clean, defensible file.

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