December 19, 2017 2017-302
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As required by Public Contract Code (contract code) section 19210, the California State Auditor presents this audit report concerning the procurement policies and practices of the Judicial Council of California (Judicial Council). The contract code generally governs how state entities should enter into contracts and acquire goods and services. Enacted in 2011, the California Judicial Branch Contract Law (judicial contract law) requires judicial branch entities to follow procurement and contracting policies that are consistent with the Public Contract Code and substantially similar to the provisions contained in the State Administrative Manual and the State Contracting Manual. In addition, judicial contract law requires the Judicial Council to adopt and adhere to a Judicial Branch Contracting Manual (judicial contracting manual).
This report concludes that the Judicial Council generally complied with the judicial contract law but could be more consistent in how it follows competitive bidding processes. We reviewed 60 procurements from fiscal years 2015–16 and 2016–17 and identified five instances where the Judicial Council did not follow policies outlined in the judicial contracting manual. For example, Judicial Council did not always obtain the proper management approval on procurement documentation and did not adequately justify why it designated some vendors as the sole source for goods or services. We also reviewed 60 payments for fiscal years 2015–16 and 2016–17 and found three that did not comply with the judicial contracting manual. The Judicial Council processed two payments without proof it had received the goods or services, and one for services rendered prior to the creation of a corresponding purchase order. When the Judicial Council does not follow established policies, it risks that it will not receive the best value for the goods and services it purchases. Finally, the Judicial Council risks making inappropriate payments because its guidance to staff for reviewing invoices does not adequately describe the process they should follow to review invoices prior to payment.
ELAINE M. HOWLE, CPA