State Auditor confirms failure of Judicial Council management

Posted on January 12, 2015

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You will recall that the Alliance of California Judges proposed an audit of the Judicial Council, which was requested by Assembly Member Reggie Jones-Sawyer, and which was unanimously approved by the Joint Legislative Audit Committee in the last legislative session over opposition from the Judicial Council. The State Auditor released her report today, and it is available for your review here. We will let you draw your own conclusions about the report, but we offer these highlights from the Executive Summary of the report:

(1)  The Judicial Council did not adequately oversee the AOC in managing the judicial branch budget, which allowed the AOC to engage in questionable compensation and business practices. The AOC:

  • Provides its staff with generous salaries and benefits—the AOC pays eight of its nine office directors more than the governor and many other high-ranking executive branch officials receive.
  • Employs over 70 contractors and temporary employees and could save about $7.2 million per year by using state employees in comparable positions.
  • Maintains a fleet of 66 vehicles without requiring its offices to justify the need.

(2)  The AOC “spent certain judicial branch funds in a questionable manner,” having made about $386 million in payments over the last four years on behalf of trial courts using funds appropriated to them, even though it could have paid a portion of those payments from its own funds.

(3)  The AOC has sole autonomy in deciding how to spend certain judicial branch funds due to the lack of Judicial Council’s involvement in the budgeting process.

(4)  The AOC has few policies, procedures, or controls in place to ensure funds are appropriately used and spent and, unlike the executive branch, is not required to undergo an annual independent financial audit.

(5)  Although it provides services to the courts, the AOC has never comprehensively surveyed the courts to identify the needs of the courts and ensure that services it provides are useful.

(6)  The AOC exaggerated the progress it has made in implementing the recommendations made by the Strategic Evaluation Committee back in 2012.

A specific quote from the State Auditor is: “[t]he level of the Judicial Council’s involvement in the AOC’s budget process and expenditure decisions appears to have been more ministerial than substantive. In the absence of adequate oversight, the AOC engaged in questionable compensation and business practices, and failed to adequately disclose its expenditures to stakeholders and the public.”

The State Auditor was also tasked by the Legislature in 2010 to audit the CCMS project, an audit also supported by the Alliance. That audit report, released in early 2011, was the impetus for the eventual abandonment of that boondoggle, albeit after more than a half billion dollars were wasted — money that could have been used to keep courts open and staff employed. That audit was opposed by then Chief Justice George, and the project was defended, even in light of the devastating audit report, by Chief Justice Cantil-Sakauye and others who were heavily invested in the project.

Changing the name of the agency has not made these problems go away. It is now time for the Judicial Council, with direction from the recently-hired Administrative Director of the Courts, Martin Hoshino, to come to grips with what many of us have been saying for some time: the Judicial Council has lost touch with its primary mission of advising the courts, and has instead morphed into an over-bloated bureaucracy that places its own interests ahead of those of the trial courts it was created to serve. The State Auditor has also recommended that the Judicial Council should create a separate advisory body to review the AOC’s state operations and local assistance expenditures in detail to ensure that they are justified and prudent.

We have never contended that we have all of the answers to the problems facing our court system, but we persist in one unwavering belief — money could not have been so tragically misdirected if the process whereby funds are allocated to the courts had been an open and democratic one. After we have had the time to fully digest the audit report, we will offer a comprehensive solution to the problems created by the insular bureaucracy that has brought us to this point. It is time to demand meaningful change and refuse to accept further promises of improvement in a governance system that is fundamentally flawed.

Directors, Alliance of California Judges