Audit of California Judicial Council draws recommendations on procurement

SACRAMENTO, Calif. (CN) — California’s state auditor released areport Tuesday on the Judicial Council’s procurement process, giving it a general clean bill of health but singling out three issues it says the council needs to address.

The auditor — which conducts a review of the Judicial Council every other year — points to a need for stronger fraud reporting requirements, consistency in certain procurement requirements and improvements in fiscal processes. It highlighted the council’s processes for ensuring appropriate payments occur.

Millicent Tidwell, acting administrative director of the Judicial Council, said in a written response that she appreciates the state auditor’s moves to improve oversight and accountability.

“The Judicial Council takes seriously its responsibility to safeguard public funds by complying with the Judicial Branch Contract Law, as I believe is demonstrated by your report’s conclusion that we have generally complied with that law, and by your recognition of our substantial progress in improving our procurement and payment policies and procedures,” Tidwell said.

The Judicial Council creates policy for California courts. It’s responsible for ensuring the consistent and impartial administration of justice.

The state auditor has performed six audits of the Judicial Council since 2011, when the audit requirement was imposed. Over that time, it’s issued 24 recommendations about procurement and payment policies, which the council has fully implemented.

The most recent audit, which took place in 2023, found the council “generally in compliance” but noted three areas for improvement.

Mike Tilden, chief deputy state auditor, wrote the council’s contracting manual, while complying with legal requirements, could use stronger fraud reporting requirements.

Council staff involved in procurement must consult with the proper department’s procurement and legal staff, or Judicial Council’s legal office, when questions appear about unacceptable behavior with bidders or vendors. However, there’s no specific requirement to report fraud. Instead, there are policies that encourage employees to relay their concerns.

Tilden recommended revising its contracting manual and establishing proper guidance for reporting actual or perceived fraud.

The Judicial Council also hasn’t consistently kept to certain procurement requirements.

The auditor’s office examined procurements made by the council between July 2021 and June 2023, finding it complied with the contracting manual’s dictates for 36 out of 40 procurements.

In one example, a certified small business failed to get the proper adjustment in its evaluation, which led to it losing out on an IT service contract for almost $500,000. An international IT company got that contract instead.

Tilden said procurement staff should get more training about the certified business category, as well as the proper type of process to use when procuring IT goods and services.

Additionally, Tilden noted that while the council’s financial management system was complete, council staff didn’t always properly record contract dates. It accurately recorded the vendor and value of 29 procurements but didn’t have the proper start date for 22 of the 29. Ten of the 29 didn’t have the right end date.

Council management explained to auditors why the incorrect dates were listed, and Tilden said it might not have been possible to properly record those dates all the time.

Tilden recommended the council formalize its processes to record dates into its system by March, and provide the training needed. The council should correct all inaccurate dates by January 2025.

Finally, Tilden said the council established proper procedures for processing its payments, noting that it follows those procedures.

“Our review found that the Judicial Council has established appropriate controls for payments to ensure that, among other things, it is paying for goods and services it contracted for and received in satisfactory condition,” Tilden wrote.