Sunday, October 2, 2022 | Back issues
Courthouse News Service Courthouse News Service

Judge Pines v. AOC Finance

SACRAMENTO (CN) A transcript of a Judicial Council meeting brought tears to an accountant's eye, as a private consultant and a court administrator run circles around the valiant effort by Los Angeles Judge Burt Pines to get a clear answer to a simple question. "That was the most nonsensical narrative I've ever read," said accountant Karen Covel. "I had to laugh after the third or fourth time Judge Pines had to ask for an explanation of the $1.3 billion versus $1.9 billion cost discrepancy. I don't think he ever did get a clear answer."

"The whole thing would be hilarious if it wasn't actually happening," said Covel, an accountant with the San Diego firm of Lauer Georgeatos and Covel that handles some accounting services for Courthouse News Service.

The following is an excerpt from the transcript of the Friday, Feb. 26 Judicial Council meeting.

Pines. We just received the report at the end of the day yesterday and I haven't had time to consider all of these matters to think about it. Initially there are a lot of assumptions here. I just want to have some understanding of basic assumptions in terms of costs. You indicated originally that our costs so far are around 270 million. Then you indicated that did not include V2 and V3. Am I correct?"

Grant Thornton Consultant: That's correct.

Pines: If you added those, it would be 379. Now, does that include everything that's been spent today by the AOC? Does it include staff time? Does it include the amounts spent by courts so far in working on this process. I've seen higher numbers in terms of costs. The second issue is the projected total cost because again if you look at the state auditors report, the estimate was $1.9 billion based on information provided by the AOC which includes, of course, not just the AOC's cost but the costs of courts to implement these things but that was embraced in your 1.3 billion number. So there's a .6 billion 600 million dollar difference there. If you could give me a little bit more information on this, I could appreciate it.

Consultant: I might have to defer to Stephen. But it does include state-level cost for V2, V3-4 in the past. It does not include court staff costs previously. Now, if we had included those, it wouldn't have made a difference with the ROI numbers because those would have been some costs in all the different scenarios so it really wouldn't have made the difference, the difference is the values would have changed but the difference it wouldn't have changed but it's money being spent in the past. We did offset future costs from January this year going forward. On the projected deployment costs, I can't speak to what was provided to the BSA. Steve would have to speak to that. But I you know, I do know that there has been a change in approach in terms of how AOC was planning to deploy CCMS, particularly with the amount of external vendor labor and the mix of vendor labor and external staff and it does have a significant impact on costs but I'm better off passing it off to staff to talk about details.


AOC's Finance Director Stephen Nash: Judge Pines, there is a critical difference from the information that was provided and reviewed by the bureau of state audits reflected the best estimates which included incorporated an assumption of a full deployment. We had a contract that was signed not signed but a contract that was negotiated for deployment. That was assuming 600-plus million dollars for the court deployment. Subsequently our project management office is looking at other alternative scenarios and the scenario that they presented and rolled out as part of this effort was not contracting all of that but a partial and not necessarily with the same vendor but opening up for some of the largest court deployments to have a vendor but then having staff working with the court, and this is really following as you know the recommendations of the office of chief information officer. Using state and court and local staff to do the deployments for medium and small size courts and there is a belief that and that's what Grant Thornton looked at but there is a belief that it will result in substantial deployment savings so that the deployment scenario that was presented is not a full contract model. It does not assume $600 million of deployment costs.

Judge Pines: So is your projection consistent with the consultant's projection in terms of all costs including court costs to deploy and implement this system seven?

Nash: So that's part of why we engaged the if I could, Chief, I'd like to step back a little bit. I have a few bigger comments and maybe I'll be able to answer your question, Judge Pines, if I could just take a moment 'cause I wanted to talk a little bit about why we engaged Grant Thornton and why we did it now and what does it mean and what is the process and what is this product? (Continues on for a page and a half justifying the CBA and Grant Thornton's expertise and how much has been learned from the study)

Pines: Thank you. Your response to my basic question. I'm just trying to get an idea of what's been spent and what the projected cost is. Is it 1.9 billion or is it 1.73, 1.4?

Nash: I concur with the estimate, the lower estimate. I believe that we do need to take this seriously. Mark Moore and his team will be making recommendations to the committees and ultimately up to the council on how we proceed. I'm telling you as the guy who just runs the numbers and does the calculations that from my perspective, the notion of a substantially more cost-effective deployment model and a model that takes into account some of the issues on justice partner and integration recommended here makes complete sense to me but again, I defer to the committees and the recommendations

Pines: I don't need to belabor this. But just so I understand from the Grant Thornton perspective. Would your estimated cost be 1.4 billion if you were to include the amount that's been spent up-to-date on these other systems?

Nash: If you include the amount that's being spent on V2 and V3, then the total would 1.5.

Pines: 1.5. And that includes the cost of the courts, too? I'm sorry from this July

Nash: From this July 1st onwards but not historically going from today.

Pines: So it doesn't include what's been spent before?

Nash: By the courts, that's correct?

Pines: The courts but it does include what's been spent by the state?

Nash: This is as of last year's report and the other thing I want to mention so in their analysis as you can imagine, they reviewed tremendous amounts of not only downloads of everything that we had in AOC in terms of cost data and information and so forth but they also had we had lots of information about court historical costs. Some of it was included in surveys. It was beyond the scope that they had to verify that. Another recommendation of the bureau of state audits that we are implementing is to go back. So right now I can't tell you what courts have spent historically. That hasn't been reported that way in our statewide financial system. We have implemented a process so that anything case management-related going forward will be reported. We have also one of the recommendations that we've agreed with and are going to do is go back and work with the courts to identify historical. So we weren't able to provide that information to them on what the courts have historically spent on implementation of the V2, V3 and whatever they've done so far for V4.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.