Friday, December 20, 2019
By a MetNews Staff Writer
The Judicial Council, in its two semi-annual reports for the fiscal year ending June 30, 2019, failed to disclose, cumulatively, $120 million in expenditures, the Office of State Auditor yesterday advised the governor and the state Legislature.
There was, the Judicial Council insisted, merely a delay in the providing of the information.
The audit also revealed that supervisors working for the judiciary’s policy-making body are approving expenditures in excess of the $500,000 limit placed on their authority.
Addressing the failure to report expenditures, State Auditor Elaine M. Howle said:
“Contrary to the judicial contract law requirements, the Judicial Council did not include some payments its non-Superior Court entities made in each of its fiscal year 2018-19 semiannual reports. Specifically, we estimate that the Judicial Council’s February 2019 report, which covered July through December 2018, did not include roughly 2,200 payments totaling $46 million from December 2018.”
“Furthermore, we estimate that in its August 2019 report, which covered January through June 2019, the Judicial Council did not include nearly 2,800 payments totaling about $74 million from June 2019. The excluded transactions amount to about 20 percent of the non-Superior Court entities’ payment activity for each period.”
The auditor also faulted the Judicial Council for incompleteness in reporting contract amendments, including a failure to indicate what goods or services are being provided
With respect to purchases being made without proper approval, Howle said:
“We reviewed 40 procurements that the Judicial Council made from July 1, 2017, through June 30, 2019. Of these, 10 were procurements for goods or services with costs greater than $500,000. For five of these 10 higher-cost procurements, the Judicial Council staff obtained signatures from one of two supervisors who were not authorized to approve procurements costing more than $500,000. The costs of the procurements that the supervisors approved ranged from $572,000 to $2.7 million and were for court-appointed legal counsel, software products, database maintenance, and fees paid to a national organization related to state courts.
“Without obtaining the appropriate approvals, the Judicial Council bypassed one of the controls intended to reduce the risk of fraud and ensure the Judicial Council only procures appropriate goods and services at the best value.”
The report notes that the problem was brought to the attention of the Judicial Council and in response, the principal manager of procurement had a talk with supervisors about the matter and sent an email reminding supervisors and managers of the rules.
Response Found Inadequate
Howle questioned whether that response “will adequately address the issue because we reported a similar finding in our 2017 audit.”
That audit noted that someone who had authority to approve purchases of up to $50,000 had given the green light to a $345,000 expenditure.
The auditor counseled:
“Because of the potential consequences of the Judicial Council’s staff procuring goods and services without the appropriate approvals, and because we found additional instances that occurred during the period covered by this audit, the Judicial Council should establish stronger controls to prevent this problem in the future.”
Judicial Council Responds
The Judicial Council was given an advance look at the report. In a Nov. 25 letter, Millicent Tidwell, chief deputy director of the Judicial Council, told Howle:
“Despite the overall positive results of your audit, the Judicial Council recognizes the need for further improvement and will carefully consider your report’s two recommendations.
There was, she said, only a delay in the reporting of expenditures, remarking:
“Any under-reporting of our payments to vendors resulting from this minor delay—which the auditors estimated to be between 30 to 60 days—was unintentional.”
Tidwell said there have been “unintentional omissions” in the reporting of contract amendments.
The response goes on to say:
“The audit report cites five instances when a supervisor approved a purchase order or contract that exceeded his or her signing authority. In ore of these five instances, a result of the improper approval was the under-reporting of a single contract to the State Auditor’s office. We acknowledge the wrong individuals executed these five agreements and our management team has counseled all supervisors regarding their approval authorities.”
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