The Judiciary:

Stronger Financial Internal Controls Needed Over Court Resources

GGD-86-45: Published: Apr 29, 1986. Publicly Released: Apr 29, 1986.

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GAO performed a general risk assessment of selected financial operations of the Administrative Office of the U.S. Courts to: (1) identify the strengths and weaknesses in its internal controls; and (2) assess the risk of waste, loss, or misuse of funds and property.

GAO found that, although the Administrative Office (AO) and the courts have taken several positive actions to improve internal controls, AO needs to: (1) develop a plan to bring all courts into compliance with generally accepted internal control principles; (2) promote the use of newly developed operating procedures; (3) assist the courts in implementing the procedures; (4) authorize additional courts to use public accounting firms to assist them in developing sound internal control procedures; (5) improve collection practices over petty offense forfeiture payments at potentially less cost with greater state coordination and the use of lockboxes; (6) enhance court disbursements through more specific guidelines, compliance with existing procedures, and improved management oversight; (7) work with court managers to ensure that they understand and maintain adequate systems of internal control over disbursements; and (8) comply with existing procedures to prevent unnecessary purchases or the loss of court property, such as equipment, lost or stolen cash, and critical documents.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Director of the Administrative Office of the U.S. Courts should instruct the central violation units to use a suspense ledger for recording unidentified collections so receipts can be deposited promptly.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Detailed instructions were completed on October 6, 1986.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should develop a time and attendance record that courts can maintain to support the hours worked by their employees, such as the time and attendance records used at the central California district court.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Time and attendance records were sent to courts on July 2, 1986, and included instructions relating to judges' staffs.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require payroll certification for judges' staffs to be performed by officials in a position to observe or know the hours being worked by these employees.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Instructions on payroll certification of judges' staff were sent to courts on July 2, 1986.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should develop a follow-up system to resolve rental discrepancies with the General Services Administration.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Alternative action was taken, including circuit executive involvement in resolving discrepancies.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require the courts to restrict access to blank defender claim vouchers.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: This procedure, as recommended, was in place as of July 2, 1986.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require the courts to use transmittal documents when submitting defender claims to AO for processing.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: This procedure, as recommended, was in place as of July 2, 1986.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require that a Criminal Justice Act (CJA) report be generated listing payments made to private attorneys and that it be sent to the courts for verification that the payments were authorized.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Action was deferred pending a decision regarding the reorganization of the payment process. If the reorganization occurs, this recommendation may no longer be applicable. The decision on reorganization was made in January 1987. The courts will be responsible for the preaudit of all CJA claims and AO will issue all payments. The recommended controls will be implemented in May 1987.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require that an exception report be generated when computer program edits identify possible duplicate payments for CJA claims and direct AO managers to review the report and verify that no duplicate payments occurred.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Action was deferred pending a decision regarding the reorganization of the payment process. If the reorganization occurs, this recommendation may no longer be applicable. The decision on the reorganization was made in January 1987, and implementation began in May 1987. Preaudit of claims at the court level will provide the control intended by this recommendation.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should develop control procedures for the courts to follow when processing juror payments, which provide for separation of duties and verification of key data elements used to pay jurors.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Guidelines were issued on September 30, 1986.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should develop procedures for the courts to follow when making local procurements for consumable supplies and miscellaneous services, which cover separation of duties and documentation needed to support payments.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Guidelines were established in September 1987. An accomplishment report has been completed for the majority of this recommendation.

    Recommendation: To strengthen disbursement practices in the Judiciary, the Director of the Administrative Office of the U.S. Courts should require court managers to develop a scheduling system to ensure that timely disbursements are made.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Guidelines were issued in November 1986.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should incorporate a requirement, in its property management guidelines, for the courts to periodically take a physical inventory of equipment, as is currently required for furniture and furnishings, and maintain perpetual inventory records of this property.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Guidelines were established in September 1987. An accomplishment report has been completed for the majority of this recommendation.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should, in concert with the circuit councils, emphasize to court managers the need to maintain adequate security over valuable court documents and property.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: AO reemphasized to all courts the importance of adequate security in October 1986.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should work with the circuit councils to develop a plan to assist those courts that have not established a system of internal controls that comply with AO collection guidelines. The plan should establish a financial management team in the circuits to assist court clerks in implementing the recently developed model operating procedures.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: In September 1986, AO presented a plan to circuit executives to establish an Internal Control Advisory Committee to assist clerks in implementing operating procedures. As of January 1987, 7 of 11 circuits established, or were in the process of establishing, committees. AO is encouraging the remaining circuits to set up advisory committees.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should work with the circuit councils to develop a plan to assist those courts that have not established a system of internal controls that comply with AO collection guidelines. The plan should authorize the use of public accounting firms, when necessary, to assist courts in identifying and correcting internal control weaknesses.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: In September 1986, AO presented a plan to circuit executives to establish an Internal Control Advisory Committee to assist courts in identifying how to correct weaknesses. As of January 1987, 7 of 11 circuits established, or were in the process of establishing, committees. AO is encouraging the remaining circuits to establish advisory committees.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should consult with the Judicial Conference and Justice Department on obtaining state assistance in notifying violators of outstanding traffic tickets.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: Violation enforcement is being discussed with Justice and the Magistrates Committee of the Judicial Conference. Justice has assumed responsibility for negotiating with states. Follow-up at Justice showed that action has not been given a high priority. GAO will include a follow-up on this issue as a part of planned work on collections.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should work with the circuit court councils to develop a plan to assist those courts that have not established systems of internal controls that comply with AO collection deadlines. The plan should include an educational program for court clerks on the importance of establishing and maintaining adequate internal controls.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: In September 1986, AO presented plans to circuit executives to establish an Internal Control Advisory Committee to help courts improve controls. As of January 30, 1987, 4 of 11 circuits had established committees and 3 were in the process of setting up groups to help courts. The remaining 4 have not adopted AO plans; however, AO is still encouraging these circuits to improve controls.

    Recommendation: The Director of the Administrative Office of the U.S. Courts should conduct a feasibility study on the use of lockboxes to process petty offense forfeiture payments.

    Agency Affected: Administrative Office of the United States Courts

    Status: Closed - Implemented

    Comments: AO received the required Department of Treasury cost-benefit analysis on November 14, 1986. Analysis showed use of lockboxes was not cost-effective. AO did not assess staff savings associated with lockboxes. Also, possible centralization of the petty offense case management and collection process could make lockboxes more cost-effective and achieve greater staff savings. GAO will follow-up later.

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