BILL ANALYSIS
AB 2521
Page 1
Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2521 (Torrico) - As Amended: April 26, 2010
Policy Committee:
JudiciaryVote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the State Controller's Office (SCO) to
perform annual audits of the Administrative Office of the Courts
(AOC) and the trial courts. Specifically, this bill:
1) Requires the SCO, by December 15, 2012 and annually
thereafter, to audit each trial court, to include a review
of all funds and accounts under the jurisdiction and
control of each trial court. These audits are to be in
addition to any audit regularly conducted by the
Controller.
2) Requires the SCO, by February 1, 2012 and annually
thereafter, to audit, as in (1), the AOC.
3) Requires the SCO to:
a) Report the results of all audits to the Legislature, the
Judicial Council, and the Department of Finance (DOF) by
April 1 of each year.
b) Develop, in consultation with the Judicial Council and
the trial courts, an audit template and guide to
standardize the trial court audits.
4) Stipulates that any costs incurred by the SCO for the
audits will be reimbursed by the local trial courts and by
the AOC, respectively.
FISCAL EFFECT
AB 2521
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The SCO will incur ongoing costs of around $7.8 million for 57
audit staff and support positions and one-time costs of $600,000
for equipment and furnishings. These costs will be reimbursed
from the Trial Court Trust Fund (TCTF). (About one-half of TCTF
resources come from the General Fund.)
COMMENTS
1) Purpose . This bill, sponsored by the Service Employees
International Union (SEIU) requires regular, independent
audits of the trial courts and the AOC. The author
maintains this bill is necessary to "increase good
government transparency and independent oversight of
taxpayer funds which support the judiciary. . . . In this
time of severe cutback, maximum transparency is paramount
to maintain the public's trust in government services."
2) Current Auditing of the Courts . Existing law authorizes
the AOC to audit the trial courts. According to the
Judicial Council, the AOC currently performs a
comprehensive audit of all trial courts every four years.
The Council indicates that these audits are more in-depth
than the financial audits contemplated by this bill,
testing financial components at a highly detailed level and
reviewing each court's compliance with rules and standards.
These audits are labor intensive and can take months to
complete, but the Council believes they are important to
the fiscal and operational integrity of the courts.
The Bureau of State Audits does an annual financial audit of
all state entities, including the courts. This audit includes
a review of financial statements, internal controls over
financial reporting and compliance with federal program
requirements. The Controller, at the request of the
Legislature, may perform financial and fiscal compliance
audits of the reports of court revenues and expenditures. The
Controller currently audits the fees, fines and forfeitures
collected by each trial court on a four to five year cycle.
Finally, the Judicial Council indicates that it is currently
seeking to enter into an agreement with the DOF Office of
State Audits to perform periodic audits of the AOC. These
audits reportedly would include reviewing (1) the reliability
and integrity of financial and operating information; (2) the
systems established to ensure compliance with laws and
AB 2521
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regulations; (3) the safeguarding of assets; and (4) the
economy and efficiency with which resources are acquired,
protected and employed. It is anticipated that this audit
would be quite similar to the Controller audit of the AOC
proposed by this bill.
3) Judicial Council Concerns . While not opposed to the
policy objectives of AB 2521, the Council opposes the bill
unless it is adequately funded and believes there is a lack
of clarity regarding the scope of the audits.
According to the Council, "To the extent these audits would
involve extensive fieldwork or other audit work resulting in
State Controller spending weeks or months at each trial court
or significantly impacting staff time, the Judicial Council
believes annual audits to be excessive and unduly burdensome.
The workload on trial court staff simply to assist in the
audit could be significant, diverting court staff from other
work and functions they need to perform. At a time with
unparalleled vacancy rates and staff doing more with less,
significant additional workload would be untenable."
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081