Report 2014-107 Recommendation 15 Responses

Report 2014-107: Judicial Branch of California: Because of Questionable Fiscal and Operational Decisions, the Judicial Council and the Administrative Office of the Courts Have Not Maximized the Funds Available for the Courts (Release Date: January 2015)

Recommendation #15 To: Judicial Council of California

The Judicial Council should develop rules of court that create a separate advisory body, or amend the current advisory committee's responsibilities and composition, that reports directly to the Judicial Council to review the AOC's state operations and local assistance expenditures in detail to ensure they are justified and prudent. This advisory body should be composed of subject matter experts with experience in public and judicial branch finance.

Annual Follow-Up Agency Response From December 2017

The Judicial Council of California (Judicial Council) continues to believe this recommendation has been fully implemented. In its evaluation of our response from last year, the State Auditor disagreed by raising questions as to whether the Judicial Branch Budget Committee contained subject matter experts in finance and voiced concerns over whether the Judicial Council will go through recurring financial audits. The Judicial Branch Budget Committee is comprised of superior court judges, an appellate court justice, and a Court Executive Officer from a large superior court. However, to further respond to the auditor's concerns, the Judicial Council notes that it has also created an Advisory Committee on Audits and Financial Accountability that serves as a clearinghouse for hearing all audit-related issues affecting the judicial branch. The audit committee's first meeting was held in October 2017 and one of the items discussed was the State Controller's financial compliance audit of the Judicial Council's spending activities.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

The Judicial Council provided evidence of the existence and membership of its new Advisory Committee on Audits and Financial Accountability. We believe this additional step fully implements the intent of our recommendation.

Annual Follow-Up Agency Response From November 2016

The Judicial Council of California (Judicial Council) has created a Judicial Branch Budget Committee, comprised of judges from different superior courts and justices from the courts of appeal, to assist the Judicial Council in exercising its duties under rule 10.101 of the Rules of Court pertaining to the judicial branch's budget, including planned spending by the Judicial Council. The committee's scope of work includes reviewing budget change proposals and making recommendations on the use of statewide emergency funding for the judicial branch. The recommendations from this committee, and the Judicial Council's actions on those recommendations, are made in open session where the public may comment on proposed budget allocations and spending. This committee has already met twice and its meeting materials (including agendas and audio recordings of the meetings) are posted at www.courts.ca.gov/jbbc.htm.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The AOC's response does not address whether the new committee is composed of subject matter experts with experience in public and judicial branch finance, who directly report to the Judicial Council. Further, in its previous response, the AOC indicated considering various approaches to implement this recommendation, including contracting for an annual financial audit of its operations. However, the AOC did not provide information on the status of the approaches it was considering.

1-Year Agency Response

Various approaches are being explored for consideration. This may include contracting with a firm/agency to conduct an annual financial audit of Judicial Council state operations and local assistance expenditures.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Judicial Council staff is working with Judicial Council advisory bodies to determine the most prudent course of action to undertake for the council to review its expenditures and ensure full compliance with policies and procedures.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Rules of Court are being reviewed to ascertain if changes are needed to assign oversight responsibility for Trial Court Trust Fund and Trial Court Improvement and Modernization Fund expenditures to the Trial Court Budget Advisory Committee and for the council's Executive and Planning Committee to assume oversight for all other Judicial Council expenditures. If rule amendments are required, changes will be made consistent with the council's rulemaking process and timeframes.

California State Auditor's Assessment of 60-Day Status: Pending

The AOC notes that it will determine whether the rules of court require a change. We expect that the AOC will implement this recommendation regardless of whether changes to the rules of court are required.

All Recommendations in 2014-107

Agency responses received are posted verbatim.